NA concerned over Long Thanh airport developer's financial wherewithal

By Dat Nguyen   November 12, 2019 | 08:53 pm PT
NA concerned over Long Thanh airport developer's financial wherewithal
An artist's impression of the Long Thanh International Airport in the southern Dong Nai Province. Photo courtesy of the Airports Corporation of Vietnam.
Lawmakers have expressed concern about the Airports Corporation of Vietnam’s financial wherewithal to go through with the mega Long Thanh International Airport project.

At the National Assembly's session on Tuesday, Nguyen Lam Thanh, a Lang Son Province delegate, said revenues of the ACV mainly come from 21 airports it operates, but only eight of the airports are profitable. 

So, even if it could raise the almost $4.78 billion required for the first phase, it is unclear how it would raise another $11 billion for the remaining phases, he said.

Hanoi delegate Hoang Van Cuong expressed similar fears. ACV has to borrow around $2.6 billion for the first phase, but could find it hard to get the loan, he said.

"Although the government may not have to guarantee the loan, it will still have to bear the risk because ACV is state-owned."

Cuong said many private companies with plenty of resources are ready to take over the project, and they could easily mobilize capital as the first private airport at Van Don in the northern Quang Ninh Province has shown. "ACV should join hands with private firms to build Long Thanh." Van Don is an investment by Sun Group, one of Vietnam's biggest real estate developers.

Thanh was also unhappy about the large price tag of the airport. With a capacity of 100 million passengers a year and two runways, Long Thanh is set to cost $16 billion in all, which is higher than other airports of similar scale, he said.

Minister of Transport Nguyen Van The said ACV has set aside VND25 trillion ($1.07 billion) for Long Thanh, and with its annual profit of VND10 trillion ($430.8 million), it could bring in 37 percent of the cost of the first phase.

Twelve local and international banks have committed $5 billion for the project, he said.

Based in southern Dong Nai Province, Long Thanh could be running at its full capacity of 25 million passengers as soon as the first phase is completed, and by 2030 its capacity could reach 85 million, he elaborated.

The airport was approved by the National Assembly four years ago, but funding has remained a big question though construction of the first phase is set to start next year.

It will be built in three phases over three decades. The first phase is scheduled for completion in 2025, and the next two in 2030-35 and 2040-50.

It will take over the overflow from Tan Son Nhat International Airport, 40 kilometers away in Ho Chi Minh City which is operating far above its designed capacity.

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