The Vietnamese government is considering offering concessions as one of the ways to spur private investments in its airport infrastructure projects.
The Ministry of Transport (MOT) thinks that one strategy to attract funding to its projects for Phu Quoc and Noi Bai airports is through concessions, according to a report by VietNamNet Bridge.
The Civil Aviation Authority of Vietnam has reportedly made an official proposal about providing concessions for these projects that have been slow to take off due to a reported lack of interest from investors, and is awaiting final decision. Another proposal is to put airline businesses up for equitization.
The MOT has said it sees no problems with investors getting involved in developing airport facilities because it is a profitable sector.
Late last year, the ministry launched projects that will upgrade terminals at Cat Bi Airport in Hai Phong, Phu Cat Airport in Binh Dinh, and Tho Xuan Airport in Thanh Hoa provinces.
This year, airport upgrade plans include expansion of the Tan Son Nhat Airport and building of new runways at Cam Ranh Airport.
MOT has relinquished plans to build seaports and will expand several airports instead, according to the report. The ports in Vietnam have been having dismal traffic, and the under-capacity has caused price wars that have brought huge losses to port operators.
But airport developments have not been catching the attention of investors, and sources said a private air carrier had asked for preferential concessions before investing in additional facilities at Noi Bai airport.
Long Thanh International Airport
Meanwhile, MOT has cut by nearly US$3 billion the projected cost of the proposed Long Thanh International Airport, now with an estimated price tag of $15.8 billion, the funding to come from the state budget and other sources.
Construction of the first stage is slated to start next year in the southern province of Dong Nai amid debate on whether the airport is really necessary since it will increase public debt, and whether a better option is to simply expand the Tan Son Nhat Airport which is nearing capacity.
The revised plan now features only one runway instead of two, and the costs of land clearance and resettlement were also cut. The second stage of the project will start in 2023.
If undertaken, the Long Thanh International Airport is expected to become an international transit hub for Southeast Asia.
Photo: Luu Uy
