Hanoi (VNS/VNA) - A significant wave of private investment isflying into aviation infrastructure on the back of improvements in long-termdevelopment planning for the sector in Vietnam.

With the master plan to operate 28 airports by 2030, including 15 domestic and13 international ones, in which Noi Bai, Da Nang, Cam Ranh, Tan Son Nhat andLong Thanh are key international gates, Vietnam is attracting investors to pourmoney into aviation infrastructure projects.

The Imex Pan-Pacific Trading Group, chaired by Johnathan Hanh Nguyen, hasrecently sent a document to Minister of Transport Nguyen Van The proposing tojoin the Airports Corporation of Vietnam (ACV) to invest in Passenger Terminal(T3) at Tan Son Nhat International Airport.

This is the second time this year Johnathan has expressed such a desire.

Meanwhile, the real estate developer FLC Group is also interested in investingin the aviation sector. The group has received approval in principle fromauthorities in the central province of Quang Binh to invest in upgrading DongHoi into an international airport.

In document No 533/UBND-KTTH, the provincial People’s Committee said theproject would be implemented under a public-private-partnership (PPP) model.

Quang Binh authorities and FLC Group have jointly asked the transport ministryto approve the project, which is expected to raise capacity from 500,000passengers to ten million by 2020.

One of the typical examples of increased private investment is Van Don InternationalAirport. The airport is the first private one in Vietnam invested in the formof BOT (Build-Operate-Transfer), with investment capital of 7.5 trillion VND (321.4million USD).

The airport is directly invested and operated by Sun Group. The price ofaviation services at the airport are still managed by the State in accordancewith law.

Van Don is approved by the Ministry of Transport (MOT) as an airport of grade4E (according to ICAO standard code). It is modern with a 3.6km long, 45m widelanding strip and is capable of accommodating large cargo and passengeraircraft.

The airport is scheduled to begin operation on December 30.
In their latest report, experts fromVietcombank Securities (VCBS) said they witnessed a trend of privatisation ininfrastructure investment.

“This trend on the one hand reduces pressure on the State budget and improvesservice quality, on the other hand it creates a less positive sign forbusinesses with a large market share in the industry when the market isshared,” said experts from VCBS.

VCBS experts also assessed that aviation infrastructure had not caught up withthe industry’s development. The total passenger transport market of Vietnameseairlines is predicted to increase by an average of 16 percent per year by 2020and 8 percent in the period 2020-30. The passenger transport volume in 2020 and2030 is 64 million and 131 million, respectively, according to the transportministry’s forecast.

Meanwhile, this year witnessed the five biggest airports of Vietnam, Tan SonNhat, Noi Bai, Da Nang, Cam Ranh and Phu Quoc, all serve a number of passengersexceeding their designed capacity. In particular, Tan Son Nhat Airport exceededthe figure by 40.7 percent.

"Despite improvements in technology, the process partially meets theincreasing number of passengers each year, the expansion and upgrades to theseairports is still an indispensable requirement," VCBS stressed.

According to ACV, in the period 2018-25, there will be 15 key airports thatwill receive upgrades. Construction works will also be undertaken on Long ThanhInternational Airport in phase 1 and new passenger terminals for Dien Bien, NaSan and Lao Cai airports.

It is expected that the total investment of terminal and apron projects(excluding Long Thanh Airport) amounted to more than 56.7 trillion VND withcapital accumulated from ACV’s business activities. In addition, it needs morethan 20.7 trillion VND to invest in the airfield projects, with capitalaccumulated from this area.

In the above projects, investment priority will belong to Tan Son Nhat Airport.

According to Deputy General Director of Vietstar Airlines Lương Hoài Nam,quoted by online newspaper vnexpress.vn at the Vietnam Travel andTourism Summit held early this month in Hanoi, since 1975, Vietnam has onlyreally built completely and put into operation Phu Quoc Airport and mostrecently Van Don Airport, the rest are mostly upgraded from military airports withlimited land funds, making the ability to expand very slight.

Vietnam has 21 airports, while Thailand has 38. The capacity of all Vietnamese airportsis 75 million passengers per year, which is just one-third of Thailand’s. Thecombined capacity of all airports in Vietnam is that of Changi Airport ofSingapore or Kuala Lumpur of Malaysia.-VNS/VNA