VietNamNet Bridge – Nguyen Dinh Cung, president of the Central Institute for Economic Management (CIEM), talked to local reporters about the transfers of operation rights to airports and seaports on the sidelines of the institute’s recent workshop in Hanoi. Excerpts:

What do you comment on transfers of the operation rights to airports and seaports to private investors?

Nguyen Dinh Cung: The Government now has a policy to raise more capital from the private sector to fund infrastructure projects. One of the methods is to transfer the operation rights to airports and seaports to private investors. The ultimate goal is to boost infrastructure development and improve service quality for people. With this policy, we can partially sell properties to raise funds for other infrastructure projects while establishing a competitive market for services at airports and seaports. More service providers will help enhance quality and support development of other sectors. These are measures to create more benefits for people and fuel economic growth.

Nguyen Dinh Cung

How can we prevent monopoly at transferred seaports and airports?

Preventing monopoly in investments and service supply is the biggest concern so it is important to design a market mechanism for this area. The owners of airports should not be airlines and many countries have limited airlines’ ownership of airports. Besides, an investor should not be allowed to own many airports to secure healthy competition.

The State should not deeply intervene into service price determination and let airport owners and airlines negotiate prices. Besides, the State needs to take flexible measures to guarantee that the market operates based on the supply-and-demand principle.

In terms of supervision, it is reasonable for the Ministry of Transport to control flight operation and safety. But we should not let the Civil Aviation Authority of Vietnam take charge of both policy making and law enforcement.

What is the biggest challenge for operation rights transfers in infrastructure projects?

I think the biggest challenge is that the concept of transferring the operation rights to infrastructure projects in Vietnam is quite new. There are different views on the participation of the private sector in operating these projects. Moreover, institutions for this are not clear. There should be transparent rules on transfer prices for infrastructure projects and effective measures to prevent State property losses.

Airports in Vietnam are for both military and civil purposes. How can competent agencies deal with national security and defense issues at the airports which private investors want to operate? Vietnam’s situation is different from other countries.

As Vietnam has not had a developed market economy, there remain opinions against private enterprises and foreign investors. This may make investors think of more risks in this market due to ad hoc policy change. Big and strategic investors may be cautious in Vietnam if they realize that Vietnam hesitates to adopt liberal policies for them.

SGT