VietNamNet Bridge - Lai Chau, a poor province with more than a half of the residents listed as poor, plans to build an airport with total investment capital of VND8 trillion.

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Nguyen Tri Hieu, a senior banking expert


Lai Chau provincial Party Committee’s secretary Nguyen Khac Chu told the press on the sidelines of an investment promotion conference held on April 23 that local authorities now seek PM Nguyen Xuan Phuc’s permission to build an airport in the province.

The airport is estimated to cost VND8 trillion.

The statement surprised the public because no one could imagine that Lai Chau would think of building an airport at this moment.

Lai Chau is a remote area with unfavorable transport conditions which badly affect local production and trade. 

By the end of 2015, three communes in the province still had no roads for automobiles, while inter-district and inter-commune roads have degraded seriously. 

In many areas, bridges have not been built, which makes it difficult to travel in the rainy season.

The report by the General Statistics Office (GSO) released last March showed that Lai Chau’s SCOLI (social cost-of-living index) in 2015 was the highest in Vietnam, at 100.3 percent, which meant that the cost of living in Lai Chau was even higher than Hanoi (100 percent).

Garments, building materials, transport fee and household-use appliances have prices higher by 1-8 percent. 

Meanwhile, 54 percent of the population in Lai Chau are listed as poor, the highest proportion in the country.

Lai Chau, a poor province with more than a half of the residents listed as poor, plans to build an airport with total investment capital of VND8 trillion.
In the province, 33 percent of people above 15 years old remain illiterate.

Lai Chau is a small economy with GDP in 2015 ranking 61st among 63 cities and provinces and income per capita of VND18.2 million in 2015.

Nguyen Tri Hieu, a senior banking expert, believes there is no need to build an airport in Lai Chau now, because Lai Chau provincial budget cannot pay for the airport, while the state budget is now seeing high overspending.

Hieu does not think Lai Chau will be able to call for capital from private investors. 

Meanwhile, it would be even more difficult to call for capital from international institutions, because the lenders will require government guarantee for loans.

While admitting that an airport would help encourage tourism development, Hieu noted that the costs would be very high. Therefore, he said a ‘cost and benefit analysis’ is needed before making avdecision on the issue.

Meanwhile, Le Dang Doanh, a renowned economist, noted that it was necessary to consider the Lai Chau airport project as a special case, because it bears geopolitical and economic significance, and would be useful in national defence.


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