Monday,  Jul 22, 2019,17:39 (GMT+7) 0 0
Long Thanh airport project will cost much more if delayed
Le Anh
Thursday,  Mar 29, 2018,23:30 (GMT+7)

Long Thanh airport project will cost much more if delayed

Le Anh

Do Tat Binh, deputy general director of Airports Corporation of Vietnam (ACV), speaks at a seminar on how to speed up work on the Long Thanh airport project in HCMC on March 28 - PHOTO: LE ANH

HCMC – Site clearance and funding are among the issues that might cause delays in the big-ticket Long Thanh International Airport project in Dong Nai Province, which will in turn send its cost soaring, heard a seminar in HCMC on March 28. 

At the seminar on how to speed up work on the project, Deputy Minister of Transport Nguyen Ngoc Dong said the ministry has drawn up an implementation plan for the airport. In the period between December 2017 and December 2019, the feasibility study will be presented to the National Assembly and that the technical design will be ready by 2020.

Land clearance will begin in June 2020 whereas work will start on other components in 2021, so phase one of the airport can be done by 2025.

However, in the process of conducting the feasibility study, where funding for the project would be sourced is identified as an issue that should be solved, Dong said, adding it is important to make clear percentages of private and public capital for constructing the airport.

According to Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, site clearance compensation is normally made in cash, but land should be should used as a means for compensation. 

To do this, he noted, agricultural land should be converted into non-agricultural land and after that, locals would be allocated a lot of land whose value is much higher than the original value of farmland. Surplus land should be put up for auction, he added.

If this is an option to be chosen, the planning of Long Thanh District where the airport will be located should be revised and the National Assembly would have to issue a resolution detailing a framework for compensation based on the land law, he said.

Nguyen Trong Hoa from the HCMC Institute for Development Studies cautioned that it would be tough to find capital for the project, so the build-operate-transfer (BOT) model of Van Don airport in the northern province of Quang Ninh should be weighed as it will help ease the burden for the State budget.

According to Hoa, planning and site clearance should be prioritized for now. When the project site is made ready, the airport could be divided into smaller components and developed under public-private partnership (PPP) which consists of BOT.

If Long Thanh had been built 10 or 15 years ago, it might have become a regional air transport hub, but in the next 5-10 years it would be late, according to Hoa.

He also voiced his concern over how to balance passenger traffic between Tan Son Nhat and Long Thanh airports. Therefore, the building of this airport should be delayed until 2025 or 2030.

Meanwhile, according to aviation expert Luong Hoai Nam, the Long Thanh project should prioritize calling for investors before the next steps are taken but the current process is done the other way around.

Raising capital for the project is not difficult as profitability of airports is stable, he noted. “It is essential a PPP investment format be clarified first.”

Do Tat Binh, deputy general director of Airports Corporation of Vietnam (ACV), said that if the project is executed step by step as it is now, it cannot get off the ground by 2021 and phase one cannot be up and running by 2025.

Therefore, ACV has proposed the Government approve a special mechanism and start work on certain components in advance to put the project on fast track. 

According to Binh, Long Thanh airport should be constructed in an urgent manner to avoid cost overruns. If it is delayed for five years, the phase-one cost might double to US$10 billion from the originally estimated US$5.45 billion.

The Long Thanh International Airport project was approved by the 13th National Assembly in Resolution 94 with a total investment cost of VND336,630 billion (US$16.03 billion), including US$5.45 billion for phase one.

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