Prime Minister Nguyen Tan Dung on Oct 1 approved an investment report on the construction of Long Thanh International Airport near HCM City. He also instructed Minister of Transport Dinh La Thang to report on the investment plan on behalf of the government to the National Assembly, which will meet Oct 19 – Nov 28.
The Long Thanh project has triggered debate among aviation and economic experts and transport officials recently.
Advocates of the plan defend the necessity to build the new airport as the country’s largest terminal, Tan Son Nhat airport in Ho Chi Minh City, is expected to become overloaded by 2017. Phase I costs are projected at $7.84 billion.
Opponents meanwhile say Tan Son Nhat should be expanded and it is a huge financial burden for the state coffers to fund the construction of Long Thanh. However, HCM City authorities say expansion of the current airport, in the densely populated city, would cost about $9.15 billion, and require 140,000 households to be moved.
In addition, the Prime Minister has approved the project as per proposal by the Party Civil Affairs Commission of the Ministry of Transport and assigned the Commission to report the project to the Politburo for approval, as well.
The investment report approved by the Prime Minister includes recommendations by the Ministry of Transport and the State Assessment Council on the project, which aims to develop Long Thanh in Dong Nai Province as a gateway to Viet Nam and a Southeast Asian aviation hub.
Speaking at a meeting of the State Assessment Council on August 15, deputy chairman of the HCM City People’s Committee, Nguyen Huu Tin, said the city’s transport facilities would be overwhelmed by 2020 if Long Thanh Airport did not open by then and instead Tan Son Nhat’s capacity was raised from the current 20 million passengers to 25 million.
During its first phase, ending in 2025, the 5,000ha airport is expected to handle 25 million passengers and 1.2 million tones. Construction of this phase is estimated to cost VND164 trillion (US$7.84 billion). By 2030, the airport is expected to handle 100 million passengers and 5 million tones of cargo per year.
Since the Vietnamese government announced its intention to develop Long Thanh, foreign companies have expressed interest in the project. Aeroports de Paris Management – a wholly-owned subsidiary of France’s Aeroports de Paris – was the latest company to enter in the running. In August the company sent a letter to Deputy Prime Minister Hoang Trung Hai asking for a meeting to discuss potential investment.
ADPi, a French company specialized in airport architecture and engineering, has committed US$2 billion in loans to fund the construction of Long Thanh International Airport in Dong Nai Province, according to Pham Quy Tieu, Vietnamese Deputy Minister of Transport. ADPi is a fully owned subsidiary of the Aéroports de Paris Group.
The MoT also reported that a number of Japanese companies had set their sights on the airport, while US-based ADC-HAS Airports and Airis Holdings had similarly expressed interest.
The cost of the first phase has been estimated at VND164.5 trillion (USD7.8 billion). The state budget, government bonds and ODA will contribute VND84.6 trillion. In addition, 5,000 hectares of land must be cleared by 2020. This difficult task is expected to complicate the project.
It is quite common for the actual cost of transport projects to exceeded their original estimates, which is why many NA deputies are worried about additional unexpected expenses.
Nguyen Van Phuc, vice chair of the NA’s Economic Committee, said, “The economy still faces a number of difficulties, so securing funds will not be easy. I want a clearer and more detailed report on the cost of this project, which includes how much will be required each year from the state budget, bonds and ODA.”
In an op-ed, Nguyen Xuan Thanh, director of the Fulbright Economics Teaching Program in Vietnam, suggested selling the land plot where Tan Son Nhat currently sits to finance the construction of the multibillion-dollar Long Thanh terminal. The proposed sale should be made only after 2025, three years after Long Thanh has been on stream, he noted.
But in another op-ed, Truong Thien said that now is not the time to build the Long Thanh airport: while it will necessary to replace Tan Son Nhat airport, the largest in Vietnam, with a modern terminal in the long term, but this will not be required for at least the next 20 years. “From the knowledge and experience gained after years of working at the airport, I assert that the terminal is not overloaded and is totally capable of being expanded to reach bigger capacity,” Thien wrote.
However, Ho Chi Minh City authorities called for an end to a costly plan to expand Tan Son Nhat because the airport, used for both civil and military purposes, is located on 1,500 hectares (3,706 acres) of the densely populated city center. City legislators noted that the planned expansion would swallow 641 hectares (and an estimated 140,000 households) north of the of the airport — a feat that would more or less cost US$9.15 billion, depending on the price of land.
Read more …
Prime Minister approves airport investment report, Oct 3, 2014
PM green lights the Long Thanh Airport Project, Oct 10, 2014
More controversy over cost of Long Thanh Airport, Oct 11, 2014