VietNamNet Bridge – The impact, if any, of ODA loans on the Long Thanh international airport project on gross domestic product (GDP) would not be considerable, especially in 2016-2019, Deputy Minister of Transport Nguyen Hong Truong said last week.

PM greenlights Long Thanh airport    

Truong said the project’s first-phase investment would total around VND165 trillion, with State capital accounting for VND84 trillion (ODA loans included), and that loans would not leave an impact on GDP in the 2016-2019 period.

The economic internal rate of return (EIRR) would be 22.1%, higher than the standard EIRR for public projects in Vietnam (10-12%), so the debt repayment ability is deemed as high.

In addition to using ODA loans to implement the project, there would be funds from bond issues and loans borrowed by Airports Corporation of Vietnam (ACV).

According to Truong, projects in the aviation sector like the new international terminal at Tan Son Nhat airport in HCMC and Terminal T2 at Noi Bai International Airport in Hanoi are financially viable and enterprises using ODA loans always repay loans on time.

For loan repayment in the Long Thanh airport project, ACV board chairman Nguyen Nguyen Hung said to construct the two terminals at Tan Son Nhat and Noi Bai, ACV borrowed money and repaid it. ODA capital in the sector is normally borrowed from the Government and ACV still has to repay such loans, Hung added.

State capital at the Long Thanh airport project would be used for site clearance, construction of access roads, customs and police facilities, and it would account for only 14.6% of the first phase’s investments.

According to ACV, the project’s first phase worth around VND165 trillion, or US$7.8 billion, will be divided into two – 1A and 1B – to reduce the financial burden. Phase 1A is to build a runway and a terminal to handle 17 million passengers a year at a cost of US$5.66 billion.

ACV anticipates around VND57.8 trillion, equivalent to US$2.7 billion, would be sourced from State capital, government bonds and ODA loans to build the runway and water and electricity systems. Meanwhile, capital for other components like passenger and cargo terminals and aircraft maintenance and repair areas is expected to be mobilized from enterprises and the public-private partnership with an estimated US$2.9 billion.

According to the Ministry of Transport, some investors have expressed interest in joining the Long Thanh airport project like France’s ADP, South Korea’s Samsung and Incheon Airport, and some Japanese companies.    

SGT/VNN