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Vietnam calls for investments in airports

VietNamNet Bridge – It’s still very difficult to develop the infrastructure system for the aviation industry, because Vietnam still cannot attract non-state investment sources.

VietNamNet Bridge – It’s still very difficult to develop the infrastructure system for the aviation industry, because Vietnam still cannot attract non-state investment sources.



Making classification would help attract investments

The capacity of the domestic airports has increased from 6 million passengers in 2000 to 52 million in 2012. In 2009, the Prime Minister approved the airport development program which foresaw the increasingly high demand for traveling.

According to the Civil Aviation Authorities of Vietnam (CAAV), the development program has been going on the right track with the targets in the air route network, fleet, airport network and flight activities having been following the programmed schedules.

Besides the state owned Vietnam Airlines, which now holds 40 percent of the passenger and 20.2 percent of the cargo market share, Vietnam also has private airlines, namely Vietjet Air, Air Mekong and foreign invested airline – Jetstar Pacific.

The Vietnamese fleet with high convenience and safety now comprises of 98 aircraft which are 6.9 years old on average. Of these, 46 aircrafts belong to Vietnam Airlines.

In terms of the infrastructure conditions, the development of 25 airports has been approved; of which 25 percent would be capable to receive big size airplanes like Boeing 777, 747, while 45 percent of airports can receive A320/321 aircrafts.

According to the Ministry of Transport, it has been very difficult to attract investments in the aviation sector, because the business field always requires huge investment capital, long time to take back the investment capital and high techniques. Especially, this is the sector that relates to the national defense which needs strict protection measures and require complicated procedures.

Therefore, the ministry believes that it’d better to classify the airports to make it easier to call for investment.

The first-class airports would comprise of the big airports which play an important role in the economic, political and national defense development. These include the Noi Bai in Hanoi, Tan Son Nhat and Long Thanh in HCM City and Cam Ranh in Khanh Hoa province in the central region.

The second-class would comprise the remaining airports.

The airports with high business potentials, according to CAAV, would be assigned to investors to develop.

As such, the airport classification would point out which airports Vietnam should call for foreign or private investments, and which airports need the state’s investment and development.

In the latest news, the Ministry of Transport is considering delaying the investment projects in some small airports such as Lai Chau, Lao Cai, Quang Ninh until after 2020.

Diversifying investment sources would help ease burden on the state

Calling for different investment sources for the aviation infrastructure, according to CAAV, is the optimal solution.

A report showed that the capital allocated by the State budget to the aviation infrastructure just accounts for 1.8 percent of the total capital allocated to the transport development every year. The annual budget just can meet 60 percent of the real demand.

Once non-state investors join the program to develop the airport network, they would help ease the burden on the state budget, while ensuring the scheduled airport development program.

Experts also believe that the socialization should be pushed up not only in the aviation infrastructure sector, but also in other sectors which can be the subjects to the equitization.

Vietnam has geared up with its plan to upgrade and expand a series of airports, including Noi Bai, Tan Son Nhat and Phu Bai, in an effort to obtain the annual 20 percent growth rate in many consecutive years.



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