VietNamNet Bridge – Several violations – including issues in capital management and usage, bidding organisation and project implementation – were found at the Airports Corporation of Viet Nam (ACV), according to a recent report by the transport ministry.

Tan Son Nhat Airport in HCM City. — VNA/VNS Photo Huy Hung

ACV, the State-controlled company that holds complete authority over the operations and trading of all 21 civil airports throughout the country, invested in a total of 85 projects with total capital of VND42.1 trillion (US$1.84 billion) from March 2012 to December 2016.

VND24 trillion came from the corporation’s own holdings, while VND12.4 trillion was from official development aid for Vietnam, with the rest (VND5.61 trillion) taken from Government budget and Government bonds.

For most projects carried out in the 2011-16 period, the original financial estimates don’t match the eventual disbursement figures, with the expansion project of the international terminal T2 at Tan Son Nhat airport in HCM City cited as the prime example of the corporation’s shortcomings in budget planning.

The project was first approved by the corporation in 2008 at a total cost of VND170 billion ($7.4 million). However, only four years later did a formal investment decision come through with the adjusted cost reaching VND590 billion, more than three times the original figure.

In addition, the corporation failed to forecast accurately the number of arrivals to the airport, leading to much higher number of take-offs and landings than the designed capacity of the airports’ runways.

The runway 25R/07L at Tan Son Nhat airport, for example, can only handle 55,100 aircraft movements over 10 years. But in only three years, from July 2013 to July 2016, the runway had already recorded 62,100 movements. A similar situation happened at Noi Bai airport in the capital city of Hanoi, leading to higher risks of airport accidents or even shut-downs.

Weak planning and poor vision also lead to chronically backed-up airports, while others operate at a lower load than their designed capacity.

Pleiku airport had only been operating for a short time before a series of upgrade and expansion projects for the taxiways and parking areas were proposed in quick succession, the report reads.

A number of projects, such as the expansion project at the Phu Quoc and Vinh airports, were approved even in the absence of obligatory legal documents, such as environmental impact assessment, fire safety approval or electricity and water drainage service supplies.

Improper capital use

According to the transport ministry, since the majority of the company’s capital is State capital, the fact that the company is simultaneously the approving authority, undertaker of projects and also the recipient of project contracts “might lead to lack of objectivity in the management of projects.”

While the Government has always urged an open and public bidding process to make sure the most capable contractor is selected, in several projects managed by the ACV – bidding packages at Phu Quoc and Vinh airports, for example—only one contractor remained at the bidding evaluation phase, “leading to no competition, price-wise,” the report said.

The corporation was also criticised for substituting the application of Vietnamese technical standards in projects that categorically require contractors to follow the higher technical standards of Europe and the US.

Recently, the airport corporation has been dealing with a lot of controversies, including suspected signs of nepotism in a flurry of recruitment decisions made by the ACV’s former director-general right before he retired this month, lax management of 3,100ha of land – much of which in prime locations – and the illegal collection of outrageously high airport entry fees.

Source: VNS