At the conference on contributing ideas to Investment Construction Report of Long Thanh International Airport Project held on Jul 8, Mr. Nguyen Nguyen Hung, Membership Chairman of Airports Corporation of Vietnam said that total investment cost for phase 1 of this project is assumed at more than $ 5.6 billion, of which 53% is state capital and ODA; the rest is from private sector.
Also, to create land fund for the owner, Dong Nai province will make land acquisition of 10,000 people, increasing compensation and land clearance cost by VND 20,770 billion (approximately $ 1 billion). At present, in 2013 the provincial leaders have been proposing Government to reserve VND 470 billion for the record and procedures of land clearance and compensation.
“Now we hope that the project will be approved by National Assembly in this October”, said Mr. Hung. Shortly after being approved by the National Assembly, the Government may request for loans from the Japanese government. Then we may start site preparation, building structures for airfield and airnavigation in 2014.
However, Mr. Hung stated that even the project is rapidly stimulated, until 2023, 2024 will Long Thanh International Airport be able go into operation. Performing construction of Long Thanh International Airport at this time is quite late. “Up to now we ought to make commencement in order to have a new airport in 2020, sharing Tan Son Nhat International Airport’s overloading status.”, he said.
According to forecast of the Civil Aviation Authority of Vietnam, after 2020, Tan Son Nhat International Port will fall into overload because of insufficient capacity.
On agreeing with this point of view, Vietnam Association On Aviation Science and Technology said that at this time it is rather late to build Long Thanh Airport, which needs urgent priority.
The investment project of building Long Thanh Airport is said to be feasible; the Return On Revenue (ROR) of the project is 22.1%, 10% – 12% higher than ROR of other public construction projects in Vietnam. However, Vietnam Union of Science and Technology Associations have advised to consider the foreign debt burden.
“It is argued that Japanese ODA is the most expensive among ODA resources. Meanwhile, our foreign debt is still high. We should carefully weight pros and cons of borrowing fund”, the Union stated.
Besides, private sector constitutes a significant proportion of the total cost of the airport construction, especially in such construction items as airport terminal, car-parking area. Therefore, in order to call for investment, Airports Corporation of Vietnam proposes Government to consider such special policies as foreign exchange guarantee, exclusive guarantee, tax incentives…
Long Thanh International Airport Project was approved by the Prime Minister in 2005, lying on an area of about 25,000 hectares, covering 6 communes of Dong Nai province. As planned, the construction progress will be divided into 3 phases. In phase 1 (2014 – 2020), Long Thanh Airport will serve 25 million passengers per year with 2 runways. In phase 2 (2020 – 2030), it will serve 50 million passengers per year; and in phase 3 (after 2030), it will serve 100 million passengers per year with four runways.
According to the owner, Long Thanh Airport Project costs about $ 7.8 billion (including land acquisition costs). Meanwhile, in term of alternative plans, Tan Son Nhat International Airport Expansion Plan (this airport is assumed to overload after 2020) costs more than $ 9.1 billion; Bien Hoa Air Force Base Expansion Plan needs $ 7.5 billion (this area is poisoned by dioxin). It is clear that Long Thanh Airport Project is more feasible.
The approved project by Prime Minister shows that until 2020 Vietnam will have 26 airports in operation compared to 21 ones at present, of which 10 are international airports and 16 are domestic airports.