Monday,  Oct 26, 2020,06:12 (GMT+7) 0 0
Finance ministry concerned about costly investment in Long Thanh airport
The Saigon Times
Saturday,  Oct 17, 2020,10:21 (GMT+7)

Finance ministry concerned about costly investment in Long Thanh airport

The Saigon Times

An artist’s impression of Long Thanh International Airport. The Ministry of Finance has expressed concern over the large amount of capital being poured into the Long Thanh International Airport project – PHOTO: LE ANH

HCMC – The Ministry of Finance has expressed concern over the large amount of capital being poured into the Long Thanh International Airport project, stating that the ratio of US$188 million per one million passengers is very high, according to Tuoi Tre Online newspaper.

The first phase of the project will see an investment of some VND109 trillion or around US$4.66 billion, with a capacity of 25 million passengers a year. Therefore, the ratio of US$188 million per one million passengers is high compared with airports on the same scale across the world, it said in a document recently sent to the Ministry of Planning and Investment.

According to the project appraisal unit, materials, equipment and building technologies chosen for the first phase are available in the domestic market, environmentally friendly and mobilizable.

Therefore, the Finance Ministry suggested the Ministry of Planning and Investment and the appraisal unit clarify the cause of the costly investment plan in comparison with similar projects worldwide as well as the advantages and distinctions of the Long Thanh project.

As planned, the mammoth project will be divided into four component projects, including offices of administering agencies such as customs, public security and quarantine that will be invested in by the State budget. Meanwhile, the Vietnam Air Traffic Management Corporation will invest in air management facilities and the Airports Corporation of Vietnam (ACV) will cover the expenses of key infrastructure works.

Last, service works such as cargo terminals, logistics warehouses, a fuel pipe system and an aircraft maintenance zone will be put up for public bidding to attract private investors.

Besides this, the Ministry of Finance also cast doubts on the capability of the investors.

According to the ministry, the assigning of ACV as the investor of important works of the airport project is completely founded, meeting the requirements of the National Assembly and the Government and Vietnam's laws.

However, the works are seeing a combined investment of around VND93 trillion, including VND36.1 trillion of the ACV’s available fund and VND56.9 trillion worth of credits without a government guarantee. Therefore, it is necessary to review its feasibility and financial safety during the construction process.

Of the ACV’s available fund, its cash, after the deduction of dividend, is around VND29.2 trillion and its accumulative cash in the 2021-2025 period is projected at around VND6.8 trillion. For the remaining over VND56.9 trillion, the firm will take out loans from local and international banks and via export credit contracts.

However, ACV now incurs a payable debt of some VND21.4 trillion, including VND6.5 trillion in short-term debts.

The enterprise has been assigned to build or upgrade 21 of the 22 airports and terminals under its management. ACV is also seeking approval for many projects, such as the Dien Bien Airport worth over VND1.5 trillion, the Na San Airport worth nearly VND2.3 trillion, the expansion of the T2 terminal of Noi Bai International Airport at a cost of over VND4 trillion and the T3 terminal of the Tan Son Nhat International Airport with over VND11.4 trillion.

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