With an estimated capital sum touching VND1.855 trillion ($80.7 million) for Dien Bien Airport’s new passenger terminal-related infrastructure, Vietjet proposes carrying out the project under the BOT format for 55 years.

Building passenger terminal under BOT format

In its recent report to the government related to the expansion of Dien Bien Airport in the north-western province of Dien Bien, the Ministry of Transport (MoT) said that Vietjet has proposed the Dien Bien People’s Committee to use about VND1.210 trillion ($52.6 million) of the state budget for site clearance work and people’s relocation.

The state funding will also cover the airport’s new facilities, such as runways, taxiways, and the apron area worth about VND1.340 trillion ($58.3 million) and a new air control station valued at VND60 billion ($2.6 million).

The works at the proposed new passenger terminal at Dien Bien Airport are estimated to cost VND1.855 trillion ($80.7 million). Vietjet proposes to carry out the project under the build-operate-transfer (BOT) format with a contract term of 55 years. Besides, the investor will be prioritised when renting the new terminal for further exploitation after the contract termination.

Vietjet envisages Dien Bien Airport’s expansion to take 24 months.

Airports Corporation of Vietnam (ACV) – Vietnam’s largest state-owned airport operator – will continue to manage operations at Dien Bien Airport. In respect to the passenger terminal, parking lots and other associated works, ACV will team up with Vietjet in choosing staff members to work at the new terminal.

The two companies will sign a contract on the provision of new passenger terminal operation and management services. Besides, Vietjet will pay ACV a mutually agreed franchising fee annually.

ACV not yet licensed to invest in Dien Bien Airport expansion

A representative from ACV said that it has sufficient capital to invest in the entire airport system. However, after the company embarked on equitisation, airport traffic infrastructure investment remained in the hands of the state, so they are not allowed to invest in upgrading airport traffic infrastructure works.

ACV’s recent document submitted to the MoT reads that during 2018-2025, according to ACV, investment projects at Dien Bien Airport might not bring the expected financial results. However, looking on the airport network’s general performance, investment at Dien Bien Airport and the company’s other medium-term investment plans could be financially efficient.

“The MoT is preparing the plan on assigning ACV to operate and manage Dien Bien Airport’s traffic infrastructure works for submission to the prime minister for consideration. If approved, ACV will arrange capital sources for investment in the airport,” the document said.

Supporting Dien Bien to preside over Dien Bien Airport’s expansion plan

Earlier, the Dien Bien People’s Committee sent a document to the MoT affirming the necessity to upgrade and renew Dien Bien Airport.

They have also expressed support for Vietjet’s plan and committed to taking the initiative in using the local budget for site clearance work in light of the project’s schedule.

In its recent report to the government, the MoT said that the central budget is facing constraints, whereas Dien Bien can balance its budget to serve the airport’s site clearance work, and the state budget only needs to support Dien Bien in building the airport’s traffic infrastructure works worth about VND1.340 trillion ($58.3 million).

The MoT, therefore, proposed the prime minister to allow the Dien Bien People’s Committee to represent the state in implementing the project (except the new air control station and other flight management works which will be invested by state-owned Vietnam Air Traffic Management Corporation).

The MoT has also proposed the prime minister to assign the Commission for Management of State Capital at Enterprises and ACV to study and invest in expanding Dien Bien Airport under ACV’s proposal, in case the state budget is constrained, after ACV is assigned to manage and exploit new airport infrastructure facilities by the government.

Under Vietjet’s proposal, the airport’s traffic infrastructure, to cover 145 hectares of space, will consist of four components, according to the Ministry of Transport.

The runways will measure 2,400m x 45m, plus 15m wide taxiways connecting to the parking area which will cover 21,000 square metres and will be able to receive A320/B737 aircraft.

In addition, Vietjet proposes building a modern passenger terminal with the capacity to receive two million passengers per year over 16,000sq.m space, and an auto parking ground over 18,000sq.m. The road linking Nguyen Huu Tho to the new passenger terminal will also be upgraded.

VIR