Vietnam needs up to VND400 trillion ($16.32 billion) to implement its 2021-2030 airport network development plan, with several localities wanting aviation connectivity, said Minister of Transport Nguyen Van Thang.
However, state-run Airports Corporation of Vietnam (ACV) can only meet 60% of the required some and the rest will have to be sourced from the private sector, Thang said at a parliamentary Q&A session Monday.
Thang said that his ministry has been tasked with formulating a fundraising plan, adding that several provinces have the potential to build airports with private sector participation.
He said more incentives were needed to stimulate private sector engagement, given the low profitability in this sector. Besides, national defense-security criteria have to be met.
Vietnam is home to 22 airports civilian airports serving around 100 million passengers per year, with more than half operating below their respective capacity.
The transport ministry has proposed developing another six airports by 2030, with air-travel forecast to reach nearly 300 million passengers per year.
Among these is the Long Thanh International Airport currently under construction in the southern province of Dong Nai. Three of the remaining five are in the north, two in the south and one in the central region.
Vietnam’s first airport developed by the private sector is Van Don in the northern province of Quang Ninh. It was developed by the Sun Group at a cost of VND7.46 trillion ($304.6 million at the current exchange rate), which included VND734 billion ($30 million) from the provincial budget. The airport opened in December 2018, with a designed capacity of 2.5 million passengers per year.
Railway outlay
At Monday’s session, Thang also said his ministry was working on three railway projects connecting seaports and airports.
The first of these is the Bien Hoa-Vung Tau route that will connect the Key Southern Economic Zone with Cai Mep-Thi Vai seaport. The project cost is estimated at $5 billion, sourced from the state budget and official development assistance (ODA) funds.
The second railway, Thu Thiem-Long Thanh, will connect Long Thanh International Airport in Dong Nai province with Ho Chi Minh City. The ministry is seeking private sector engagement in the $2.4 billion project.
The third route will connect Lao Cai province bordering China with Hanoi and the port city of Hai Phong. The cost for a single and double lane route is estimated at $6.5 billion and $10-11 billion, respectively.
Given the huge financial needs, the ministry will look to tap multiple sources, Thang said.