PM greenlights Long Thanh airport

The proposed Long Thanh International Airport has moved into the final approval stage

The Government Office announced last week that Prime Minister Nguyen Tan Dung had agreed to the project’s investment report which had been submitted by the Ministry of Transport (MoT). A state council including high-ranking government leaders in August appraised the feasibility of the project and gave it a thumbs up.

The Long Thanh International Airport, located in the southern province of Dong Nai, about 40 kilometres from Ho Chi Minh City, plans to have the total annual capacity of 100 million passengers and five million tonnes of cargo by 2030, the Government Office noted.

The investment process will follow two phases. The first, to be completed by 2025, is to develop an airport that can service 25 million passengers and 1.2 million tonnes of cargo per year. The second phase would expand the airport to the aforementioned maximum capacity. The total investment planned for the project is more than $7.8 billion.

Long Thanh is currently considered one of Vietnam’s most important projects. It will take the pressure off the overloaded Tan Son Nhat International Airport in Ho Chi Minh City and also act as an international transit hub in Southeast Asia.

The project has actually faced protest from some local experts and people, as they said expanding the currently operating Tan Son Nhat was more feasible. However, the MoT responded in saying that such an expansion was not feasible, as the airport was situated in the heart of the city.

The Ho Chi Minh City People’s Committee Deputy Chairman Nguyen Huu Tin said in August that the existing infrastructure would be overwhelmed if Tan Son Nhat’s handling capacity was increased from 20 to 25 million passengers per year.

The European Chamber of Commerce in Vietnam (EuroCham), in a White Book 2014 released late last year, urged the Vietnamese government to push forward construction of Long Thanh as quickly as possible to ease congestion at Tan Son Nhat.

The urgency reflects how important this airport could be to businesses in the city and surrounding areas.

“Investment in airports is needed to support this growth in both passenger and cargo transportation. As it takes time to prepare airports for future demand, investment should commence as soon as possible,” EuroCham stated in the White Book.

“A move to create additional terminal space and facilities to cover future needs is essential for Vietnam to increase its international competitiveness in the air freight sector,” it added.

The recent government approvals ended a decade of studying and preparing for the project, which has been long anticipated by many investors seeking involvement. The MoT also announced that the government would seek half of the total investment needed for the project from private investors who would finance terminals, warehouses and other service facilities. The rest would be mobilised from the state budget and official development assistance from international partners to cover the cost of non-profit facilities including runways and taxiways. Additionally the state budget would also cover the cost of site clearance and resettlement.

Since the Vietnamese government announced its intention to develop Long Thanh, foreign companies have expressed interest in the project. Aeroports de Paris Management – a wholly-owned subsidiary of France’s Aeroports de Paris – was the latest company to enter in the running. In August the company sent a letter to Deputy Prime Minister Hoang Trung Hai asking for a meeting to discuss potential investment.

Samsung C&T, a subsidiary of Samsung Group, last year signed a memorandum of understanding with the Ministry of Planning and Investment to study investment opportunities in this project.

The MoT also reported that a number of Japanese companies had set their sights on the airport, while US-based ADC-HAS Airports and Airis Holdings had similarly expressed interest.