The cost of building the Long Thanh International Airport in Vietnam will not considerably affect the country’s gross domestic product (GDP), according to a transport official.
Deputy Minister of Transport Nguyen Hong Truong said recently that the project’s first-phase investment will total around VND165 trillion (US$7.78 billion), with state capital accounting for VND84 trillion (including overseas development assistance, or ODA, loans), and that loans will not impact GDP in the 2016-2019 period.
The economic internal rate of return will be 22.1 percent, higher than the standard EIRR for public projects in Vietnam (10 percent to 12 percent), so the debt repayment ability is deemed as high, he said, according to a report from VietnamNet Bridge.
Aside from state capital and ODA loans, other capital sources include funds from bond issues and loans to be borrowed by Airports Corporation of Vietnam, the developer of the airport.
State capital will be used for site clearance, construction of access roads, customs and police facilities, and it will account for only 14.6 percent of the first phase’s investments.
The key components of the first phase will be the building of a runway and a passenger terminal that will have a capacity of 17 million heads a year.
Construction of the runway is expected to cost around VND57.8 trillion, including installation of water and electricity systems. Meanwhile, the rest of the capital will go into the building of passenger and cargo terminals and aircraft maintenance and repair.
According to the Ministry of Transport, some investors have expressed interest in participating in the Long Thanh airport project, including France’s ADP, South Korea’s Samsung and Incheon Airport, and some Japanese companies.
The approval by the State Assessment Council of the development of Long Thanh International Airport in Dong Nai Province was announced last month, paving the way for its construction.
Sitting on an area of more than 5,000 hectares, the proposed aviation hub is seen to take the pressure off Ho Chi Minh City’s Tan Son Nhat International Airport, which is already nearing its capacity.
Approved by the Prime Minister in June 2011, the Long Thanh Airport is expected to become a competitive international airport and a key entry point to Southeast Asia.
Under the infrastructure plan, the airport will be built in three phases at a total cost of $10 billion, with the first phase to begin next year. Once completed and operational by 2020, the initial phase will have an annual capacity of 25 million passengers.
Airport capacity will double after the second phase, which should be completed by 2030.
When fully finished by 2035, the project, located about 43 kilometers from HCM City, is envisioned to have an annual capacity of 100 million, and divert a major chunk of passenger traffic from Tan Son Nhat International Airport.
Photo: TuanUt
