A design of the Long Thanh International Airport (Photo: ACV)
Hanoi (VNA) – The Government has considered mobilising capital from domestic enterprises to invest in the first construction phase of Long Thanh international airport project, which is estimated to cost 4.7 billion USD.
Under a report on the feasibility study for the super project’s first phase submitted to the National Assembly (NA), the Government has requested the legislature to approve its plan to assign the State-owned Airports Corporation of Vietnam (ACV) as the main investor of the Long Thanh International Airport.
According to the Government’s plan, ACV will be the investor and operator of the airport, who will use its own capital to invest in the construction of the State management administrative building and essential component buildings of the airport.
ACV can make use of concession contracts to partner up with private businesses to carry out service components of the airport.
The form of investment will be in accordance with the Law on Investment.
The Government’s report shows that the total investment (including costs for construction, equipment, project management, consultation, and other expenses) is estimated at over 111.6 trillion VND (over 4.7 billion USD). Of the amount, ACV needs to mobilise over 98 trillion VND (nearly 4.2 billion USD).
Regarding equity capital, as of December 31, 2018, ACV has accumulated more than 24.26 trillion VND (over 1 billion USD). In the period of 2019-2025, the firm expects to gather over 12.3 trillion VND. As such, by 2025, the corporation will have arranged an equity capital of 36.6 trillion VND (over 1.5 billion USD) or 37 percent of the total investment.
To arrange the remaining capital, recently, ACV has worked with financial organisations that are interested in the project.
So far, ACV has worked with 12 foreign and domestic credit organisations and signed collaboration agreements to secure loans of 5 billion USD, with the borrowing term of 15 years, a grace period of 5 years and an annual interest of 5-5.5 percent.
With its healthy financial capacity and available revenues from 21 airports, if there is a shortage of capital for the project, ACV can mobilize international commercial loans with better interest rates. ACV's investment will help reduce interest expenses, contributing to improving the investment and financial efficiency of the project.
For construction components that are meant for air navigation management, the Government also proposed assigning the State-owned Vietnam Air Traffic Management Corporation (VATM) to be the investor since this is the only company allowed to provide air navigation management services. Total investment for the component will be over 3.2 trillion VND (over 137.5 million USD).
So far, VATM has arranged 2.1 trillion VND. The remaining amount will be mobilized from domestic commercial banks with an interest rate estimated at 11 percent per year.
Under the report, the Government has proposed building two additional roads at a cost of over 4.8 trillion VND, to enhance better connections between the city and the new airport.
The Government has also proposed increasing the first-phase construction area by 55 percent from 1,165ha to 1,810ha to add more structures such as cargo storage and a cargo terminal, and to clear the area for a future second runway.
As planned, Long Thanh International Airport will open its doors by 2025 at the latest and will handle 25 million passengers and 1.2 million tonnes of goods a year once the first phase is completed.
The next two phases of the project will run from 2030 to 2035 and from 2040 to 2050.
Once completed, it will have an annual capacity of 100 million passengers and five million tonnes of cargo.
Located 40km to the east of HCM City, Long Thanh airport is expected to relieve overloading at Tan Son Nhat International Airport in HCM City, the country’s largest airport.
Vietnamese airports served 103.5 million passengers last year, up 11 percent from 2017, according to ACV./.
