In a recent proposal made to the National Assembly, the government said that ACV should invest in the first phase of the Long Thanh International Airport in the southern province of Dong Nai.
State-owned ACV, which runs 21 airports in the country, will invest in the first runway, taxiways, a terminal, aircraft parking space and other essential infrastructure of the airport.
The corporation will need to raise about VND98 trillion ($4.19 billion) for the project. It is set to have VND36.6 trillion ($1.57 billion) by 2025, or 37 percent of the investment, and has been working with 12 domestic and international organizations to borrow the rest, with repayment to last 15 years at an interest rate of 5-5.5 percent a year.
The government has also proposed that the Vietnam Air Traffic Management Corp (VATM) invests in the control tower and other safety features with its own money.
VATM would need to raise an estimated VND3.22 trillion ($138.8 million) for the purpose. It already has VND2.12 trillion ($91.38 million), or 66 percent, of the needed money and is set to borrow the rest from local banks with an interest rate of 11 percent a year.
The government has proposed to increase the first phase construction area by 55 percent from 1,165 hectares to 1,810 hectares to add more structures such as cargo storage and cargo terminal, and to clear the area for a future second runway.
The total area for the airport in all phases remains unchanged at 5,000 hectares, which has already been approved by the National Assembly.
The government proposal has been made after experts have suggested that Vietnam should invite bids to build its largest airport to allow competition instead of handing it to a state-owned firm.
The project’s price tag is far beyond ACV’s capacity, which could lead to financial risks, aviation expert Nguyen Thien Tong had said.
The Long Thanh International Airport was approved by the National Assembly four years ago, but funding has remained a big question until now, even as construction of the first phase is set to start next year.
The airport is to be built in three phases over three decades. The first phase is scheduled for completion in 2025, when the new airport will be able to handle 25 million passengers a year. The next two phases will run from 2030 to 2035 and from 2040 to 2050.
Once completed, it will have an annual capacity of 100 million passengers and five million tons of cargo.
The three phases are estimated to cost $5.4 billion now, but experts have warned this could double if the project was delayed by five years.
Located 40 kilometers east of HCMC, the airport is expected to take up the overflow from the largest existing airport in the country, the Tan Son Nhat International Airport.
Vietnamese airports served 103.5 million passengers last year, up 11 percent from 2017, according to ACV.