The Long Thanh International Airport perspective plan. Photo from news.zing.vn
Zurich Airport has made preliminary explorations of the Long Thanh project, CFO Mr. Lukas Brosi told Deputy Prime Minister Hue at the World Economic Forum (WEF) in Davos.
The Swiss airport operator is also keen on the public-private partnership (PPP) legal framework being refined by the government as well as the transfer of expertise in airport management, Mr. Brosi added.
The Deputy Prime Minister welcomed Zurich Airport’s interest and encouraged it to invest in proposed airports and acquire a stake in Airports Corporation of Vietnam (ACV), which operates 22 airports around the country. The government plans to cut its holding in ACV to as little as 65 per cent by end-2020, from 95.4 per cent currently.
The government is preparing the site of Long Thanh International Airport, which will cost over $16 billion, for construction, with it replacing the overloaded Tan Son Nhat International Airport as Ho Chi Minh City’s main aviation hub. A range of foreign investors from North America, Europe, and Asia have expressed interest in taking part in the project.
Vietnam is building ambitious key national projects to pave the way for future growth and to alleviate growing bottlenecks. As rising incomes result in fewer international aid dollars and the clout of State-owned enterprises (SOEs) wanes, Vietnamese authorities are turning to the PPP model for infrastructure development.
Though the legal framework for PPPs has been in place for eleven years, however, results have been limited. Inadequate support for the financial viability of projects, weak financing, and risk allocation between the government and the private sector have been problematic.
ACV has been assigned by the government to study investment proposals for the Long Thanh project, but if outsiders are involved, questions are being asked whether ACV will remain the operator of the airports or will simply receive a percentage of revenues, with the balance going to external investors.
