ACV as investor for Long Thanh airport could bloat public debt: lawmakers

The government has proposed that the Airports Corporation of Vietnam (ACV) be the main investor of Long Thanh International Airport’s first phase, including a runway, taxiways, a terminal, aircraft parking space and other essential infrastructure.

Reviewing the proposal, Vu Hong Thanh, chairman of the National Assembly Economic Committee, said Wednesday that the government has not evaluated the impacts of the project on public debt.

ACV is set to borrow almost $2.63 billion of the $4.2 billion it plans to invest in the project, and the borrowing will be added to public debt because it will likely be government-guaranteed, he said.

As ACV has already been tasked with expanding the Tan Son Nhat International Airport and other airports, the government needs to evaluate the firm’s ability to raise more capital, Thanh added.

Other lawmakers expressed similar concerns, but Minister of Transport Nguyen Van The defended the government’s proposal.

ACV has been working with foreign investment funds and they are willing to fund the project at preferential interest rates and do not need a government guarantee, he said. "The investors see that investing in Long Thanh Airport is sustainable. In reality, pouring money into big airports is never a losing proposition."

Since Long Thanh is a major international airport, the main investor needs to have experience in managing airports and the ability to ensure national security, and the airport must be built with public funding or domestic private funding, he said.

Even if the project is opened up to domestic bids, only ACV will be selected as it has the experience of managing 21 airports in the country, The added.

A bidding process will take another 18 months, delaying the construction start date to 2022 or 2023 instead of 2021 as planned, and will still result in ACV being selected anyway, the minister said.

If the National Assembly supports the government’s proposal, construction will start as scheduled so it could take the overflow from the overloaded Tan Son Nhat Airport, whose expansion is being delayed, he added.

Government Chief Inspector Le Minh Khai said that should ACV be tasked with building this project, a foreign firm should be hired to supervise it in the interests of ensuring transparency.

The Long Thanh International Airport was approved by the National Assembly four years ago, but funding has remained a big question until now, even as construction of the first phase is set to start next year.

The airport is to be built in the southern Dong Nai Province in three phases over three decades. The first phase is scheduled for completion in 2025, when the new airport will be able to handle 25 million passengers a year. The next two phases 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 tons of cargo.

Total costs of three phases are estimated at VND336.63 trillion ($14.5 billion).