Airports Corporation of Vietnam (ACV), the sole airport company managing the 22 airports across the country, has recently been found to have committed several violations relating to the enforcement of regulations as well as capital and land use.

Several counts of mismanagement were uncovered at ACV

These inspection results were published by the Government Inspectorate of Vietnam after taking a closer look at ACV’s operations in the 2012-2015 period.

The date that the Government Inspectorate of Vietnam announced starting the inspection (April 2016) is identical to the date that ACV started its operation under the equitised company model.

No competitive bidding

According to the inspection conclusions, during 2012-2015, ACV did not have a uniform process to select goods and service providers at its airports. Notably, instead of conducting a bidding to select companies to sell goods and services inside the airports, ACV was found to voluntarily appoint companies and individuals to hire space for business activities.

Despite the fact that the Government Inspectorate of Vietnam has yet to clarify the consequences of ACV’s voluntary appointment of goods and services providers, it is sure that selecting partners via bidding will create more benefits.

Besides, ACV was found to have committed violations in collecting service fees. Notably, at the time of inspection, 21 of 22 airports managed by ACV asked car drivers to pay entrance fees at the terminals.

Accordingly, car drivers were required to pay between VND7,000-13,000 ($0.31-0.57) for a daily ticket and between VND600,000-1.65 million ($26.42-72.64) for a monthly ticket for stopping, even for short durations of three-five minutes only at the paths for picking up or dropping off passengers. Between January 1, 2012 and December 31, 2015, ACV earned a total of VND551 billion ($24.3 million) from collecting entrance fees.

Lax management of land areas

At the inspected time, ACV was managing 3,102 hectares of land, 3,085 hectares of which are land inside the airport areas and the remaining 17 hectares were located outside of the airports. However, ACV was found to have delayed completing procedures to lease more than 200 hectares of land.

Along with delaying the land lease procedure, ACV’s lack of the land lease processes before transforming into an equitised company was another violation.

Furthermore, ACV committed violations in using allocated land plots for improper purposes. Notably, ACV permitted enterprises to conduct unrelated activities on several land plots allocated for aviation-related purposes.

Earlier in July 2017, the Inspectorate of the Ministry of Transport issued the inspection results of ACV’s service quality at its five key airports. Accordingly, ACV lacked sufficient management oversight at its spaces for lease.

At the inspected time period, numerous goods and services providers used larger spaces than what was specified in the contracts for their business activities. Besides, ACV’s permitting enterprises to use area allocated for opening customer supporting centres for business activities was another sign of mismanagement.

In early August, the Inspectorate of the Ministry of Transport (MoT) announced starting an inspection on the capital efficiency of construction investments managed by ACV.

Accordingly, the inspection team will examine ACV’s performance on raising and managing capital for construction investment, including capital from the national budget and loans managed by MoT and ACV.

VIR