VietNamNet Bridge – The Ministry of Transport (MOT) has scrapped plans to build seaports and instead will expand several airports this year.

The construction of the Cat Bi Airport terminal in the northern city of Hai Phong started late last week with investment capital of VND1.5 trillion. This was the third terminal construction project that began in the last month. The first was the terminal at Phu Cat Airport in Binh Dinh province and the second was at Tho Xuan Airport in Thanh Hoa province.

All three projects were developed by the Airport Corporation of Vietnam (ACV), a 100 percent state-owned corporation.

Analysts noted that MOT now favors airport projects. MOT’s Minister Dinh La Thang recently said that Lach Huyen will be the last seaport project in Vietnam to be funded by the State. The ministry has been disinvesting from many projects.

A source from MOT’s Enterprise Management Department said that existing seaports are capable of satisfying the increasingly high volume of goods going through ports. Some ports of the Cai Mep – Thi Vai port complex still have not been fully exploited.

The Vietnam National Shipping Lines (Vinalines) has been selling some seaports under the policy to withdraw state capital from seaport enterprises approved by the government.

A report from the Civil Aviation Authority of Vietnam (CAAV) shows that the air transport market grew rapidly by 12.7 percent from 2009 to 2014.

The total number of passengers reached 50.5 million in 2014, up by 14.7 percent over 2013.

Vietnam is forecast to rank seventh in the top 10 nations worldwide with the fastest growth rate in international airline passengers in the 2013-2017 period.

Meanwhile, the infrastructure has become overloaded at Noi Bai, Tan Son Nhat, Cam Ranh and other airports.

Public capital

State capital alone will not be enough to upgrade and build new airports, and it is necessary to call for investment capital from diverse sources.

However, CAAV’s Head Lai Xuan Thanh admitted that airport projects are not attractive to investors. The government in the past planned to develop airstrips at Cam Ranh Airport and other projects under the investment modes of PPP (private public partnership), BT (build, transfer) and BOT (build, operate, transfer).

However, only the Phan Thiet Airport project has been developed under the BOT mode.

ACV’s CEO Le Manh Hung said transport infrastructure projects require huge investment capital and high technologies. Meanwhile, investors are reluctant to pour capital in projects because government policies are not sufficiently encouraging.

Vietnam needs VND230.215 trillion in the 2015-2020 period for airport infrastructure projects.

TBKTSG