VietNamNet Bridge – Although the Ministry of Transport of Vietnam (MOT) has said Japan would lend $2 billion in official development assistance (ODA) to fund the Long Thanh Airport project, the first secretary of the Japanese Embassy in Vietnam Hiroyuki Hayashi, on October 17 denied that it had agreed to do so, according to a report in Thanh Nien newspaper.

Deputy Minister of Transport Pham Quy Tieu, at a recent seminar held by the government’s information portal, had said that the Japanese side would lend $2 billion to implement the project.

The Ministry of Transport (MOT) said the airport would help ease overloading at Tan Son Nhat Airport in HCM City. After a prolonged period of debate, the government finally agreed to go ahead with the airport, to be located in Dong Nai province.

Though the decision has been made, economists and involved parties continue to disagree over how it can be funded. It is estimated the project would need $7.837 billion in the first phase.

Tieu said the investor would have to rely on capital from ODA and government bonds, and that it would be difficult to seek funds under the investment modes of BOT (build, operate, transfer) or PPP (private public partnership) for the runway and parking lots.

The government said ODA capital was needed for infrastructure and items that would ensure aviation safety in emergencies.

Tieu also noted that the Japanese government had promised to reserve $2 billion for the Long Thanh Airport project in Vietnam. However, before disbursement, many negotiations have to be conducted, he added.

Nguyen Nguyen Hung, president of ACV, the investor of Long Thanh airport, said: “In aviation projects, the government borrows capital via ODA, while investors borrow capital from the government.”

He explained that the loans ACV expects to receive for the project would not be listed as state public debt.

“ACV borrows money and then pays its debt, as it did with the terminals at Tan Son Nhat and Noi Bai Airports,” he said.

MOT has tried to reassure the public many times that capital for Long Thanh was within reach.

MOT Deputy Minister Nguyen Hong Truong has denied that Vietnam would have to sell Tan Son Nhat Airport to get money to build Long Thanh Airport.

“It is completely within our reach to arrange capital for Long Thanh. MOT does not intend to sell Tan Son Nhat to get money for Long Thanh,” he said.

However, Truong revealed that once Long Thanh is put into operation, Vietnam may think of equitizing a part of Tan Son Nhat and selling shares to domestic and foreign investors.

Dat Viet