Twelve airport projects have been included on the list of projects to be developed with diverse capital sources. The state needs to offer attractive incentives to lure investors as these are not high-profit making ventures.

Experts have repeatedly warned about the overloading of transport infrastructure. But infrastructure development requires huge capital. 

The solution is taking full advantage of different resources in society rather than relying on the state budget. However, to date, there is only one privately invested airport.

Nguyen Anh Dung, deputy director of the Planning and Investment Department of the Ministry of Transport (MOT), said Vietnam has 22 airports, of which 21 are managed by the Airports Corporation of Vietnam (ACV), a state-owned enterprise (SOE). One airport, Van Don in Quang Ninh, was invested under the PPP (private public partnership) mode. 

Dung said that aviation has grown rapidly, 16-18 percent per annum, which is recognized by the International Air Transport Association (IATA) as the fastest growth rate in Southeast Asia and the fifth fastest in the world.

The rapid growth has put pressure on airport infrastructure. In 2011-2019, investment in aviation infrastructure was enough to serve 95 million passengers a year. 

Before Covid-19, in 2019, 116.5 million passengers went through the airports of Vietnam per annum. As such, the exploitation output of the airport network was 20 million passengers higher than the designed capacity.

“With such high traffic, some airports have become overloaded, especially in large cities such as Tan Son Nhat, Noi Bai, Cam Ranh and Da Nang,” Dung said.

Luong Hoai Nam, an aviation expert, believes that private funds are needed for the development of airports and removal of problems in policies to develop specialized airports and airports serving general aviation.

Nam said that investors still don’t know which way they should go, what administrative procedures they should follow, and which agencies they need to contact, while local authorities don’t know what they have to do to implement projects using capital mobilized from the public.

Previously, a high number of investors expressed interest in making investment in airports. But, according to Nam, they have “disappeared”.

Regarding private funding of airport infrastructure, there are six largest airports and they are under the management of ACV, while the other 12 airports are included on the list of projects with capital from diverse sources.

As these are not projects which promise attractive profits to investors, the state needs to roll out the carpet to lure investors.

Red carpet, according to Nam, means preferential policies and support for some items, especially to private investors.

“The procedures must be simple and transparent, with no risks for investors,” Nam said, adding that if Vietnam can do this, it would be able to make a breakthrough. “Some investors have left, but if the procedures are simplified, they will come back.”

With five years of experience in managing the only privately owned airport, Van Don, Pham Ngoc Sau, former CEO of Van Don Airport, said many problems must be solved to attract private investors.

The state needs to create a favorable, creditworthy business environment, simplify procedures, improve the reliability in terms of ownership, improve land policy, and ensure a stable investment environment

Moreover, the licensing and airport management process must be transparent. It is necessary to build a PPP model that is strong and useful. There must be synchronized infrastructure items, including connected roads, railways and waterways around airports so as to enhance trade and tourism potential.

Nam warned that congestion at airports may lead to congestion in air transport, affecting economic growth.

According to him, Vietnam’s air carriers, which want to bring aircrafts into Vietnam, have to explain to the watchdog agencies two matters: where they will park the aircrafts and where they will have the aircrafts maintained.

Therefore, they understand that at present, Vietnam would maintain the 244 aircraft it has since pre-Covid-19.

The second threat is the lack of small airports and small-size aircrafts, which leads to an unreasonable aviation structure.

Viet Nam Net