The total capital required to build the new Long Thanh International Airport in the southern province of Dong Nai is estimated at US$18.7 billion for all three phases, Vietnamese lawmakers were informed Tuesday.
Lawmakers attending the ongoing National Assembly session in Hanoi received a report signed by Transport Minister Dinh La Thang, which includes details about the current state of Ho Chi Minh City’s Tan Son Nhat airport, which the new terminal is expected to ease pressure on, and the funding required for the project.
The transport ministry is trying to sell the plan to build the new airport, to be located in Long Thanh District, around 50km from Ho Chi Minh City. The report delivered Tuesday included amendments that were not attached to the previous one, according to the ministry.
The headline-grabbing megaproject will be implemented in three phases, collectively worth $18.7 billion, according to the report.
The first phase will require an estimated $7.8 billion, while the respective capital needed for the next two phases is $3.8 billion and $7 billion, respectively.
The airport is expected to be able to handle 100 million passengers a year by its last phase.
Noticeably, VND21.84 trillion ($1.03 billion) of the capital required for the first phase will be funded by the state budget, down nearly VND2 trillion ($94.14 million) from the previous estimate calculated by the transport ministry.
In order to reduce pressure on state coffers, the government has suggested allowing the Airports Corporation of Vietnam (ACV) to earmark VND5 trillion ($235.34 million) of the amount generated from the privatizations of itself and its subsidiaries to cover site clearance, compensation and relocation expenses.
The government is projected to borrow VND47.85 trillion ($2.25 billion) worth of official development assistance (ODA) loans for the first phase of the project. The ACV will borrow the loans from the government and will repay them on its own.
The project developer will attract investment from non-government sectors for other units of the project.
The transport ministry also urged the necessity of building the Long Thanh airport in the report by proving that the Ho Chi Minh City terminal will become overloaded in the next two years.
The domestic and international terminals at Tan Son Nhat airport have a total capacity of 25 million passengers a year, according to the report.
The airport is projected to reach this threshold by 2016 and, from that point on, become overloaded.
The domestic and international terminals currently span 123,000 square meters, capable of receiving 20 million passengers at most and “congestion during peak time” is not uncommon, according to the report.
In the meantime, it is too costly to expand Tan Son Nhat, the transport ministry noted.
In order to increase the airport’s capacity to 40 to 50 million passengers a year, a new passenger terminal with a capacity of 15 to 25 million passengers a year must be built.
This would require total capital of $9.1 billion, and the relocation of 140,000 nearby households.
The current land plot zoned for civil aviation at Tan Son Nhat is 590.48 hectares, while 517 hectares are under the management of the Ministry of National Defense, according to the report. Of the military land plot, 160 hectares are zoned for a golf course.
Minister Thang is slated to report the plan to the National Assembly today, October 29, and the chairman of the Economic Committee will present the evaluation report on the plan.