Sep 25, 2012

Vietnam - Airport investments to be open to private sector

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The Ministry of Transport has recently set up the Agency for Private – Public Partnership, which will develop the legal framework for the country to attract investments from the private sector, both in Vietnam and other nations, into its traffic infrastructure projects, including airports.

Sourcing capital for such investments from the private sector is essential at a time when state capital falls short of what’s needed for airport construction in the 2012 – 2020 period, said Lai Xuan Thanh, deputy head of the Civil Aviation Administration of Vietnam (CAAV).

The country has planned to repair and upgrade 26 terminals in the next eight years, which requires an enormous VND221 trillion (US$10.1 billion).

“It’s necessary that the huge task be shared by seasoned investors with strong financial muscles, and modern technologies,” said Thanh.

First possible investor

While no invitations have ever been offered, some private investors say they are willing to join the game.

The US-based airport investment, development and operations company ADC & HAS, for instance, said it has mulled investing in the aviation sector in Vietnam.

The company opened a representative office in in Vietnam in 2010, being attracted by the large potential for development in the aviation market, said Nguyen Vu Michael, its sales development director in Vietnam.

“More Vietnamese are using airplanes for travel, and market growth is always in a two-digit rate,” he said.

Many international airliners have opened new services to Vietnam, and ADC & HAS wants to use its capital, technique, and management technology to embrace the chance, he added.

Meanwhile, ADC & HAS chairman Jeff Scheferman has been to Vietnam to examine the Chu Lai Airport in the central province of Quang Nam, and worked with representatives from the transport ministry on future investments.

Michael said his company wants to cooperate with CAAV under a joint-venture model, with the mutual target of attracting as many airlines to Vietnam as possible.

He said that since airports are a nation’s property, private firms like his will only commercially exploit it while air control, customs and security tasks at the airport should be left to the government.



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