Market abuse a concern as Vietnam mulls sales of airport terminals

By N.Nga-N.T.Tam, Thanh Nien News

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Noi Bai Airport in Hanoi. Photo: Diep Duc Minh Noi Bai Airport in Hanoi. Photo: Diep Duc Minh

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Experts in Vietnam have begun to voice their concern about potential market abuse that may arise from the government's plan to open up the aviation sector. 
As the transport ministry is considering selling the rights to operate major airport terminals, experts say it is vital to have regulations to protect consumers.
They fear that once a company has been allowed to take over a certain terminal, it will try to capitalize on its market monopoly. 
Earlier this week Vietnam Airlines offered to buy Hanoi’s sole domestic terminal at Noi Bai International Airport. The state-own carrier was the second airline to make such an offer, after low-cost carrier VietJet Air.
Economist Nguyen Van Ngai said privatization does not necessarily mean giving one investor the license to operate a complete terminal. 
The ministry should consider selling operating rights to different investors, which is the best way to protect airport terminals from being monopolized, he suggested.
Bui Trinh, another economist, also said if the ministry allows a single investor to become the sole manager of a terminal, it will look like the state allows that investor to have a monopoly. 
He and many other economists urged the ministry to introduce regulations, including those related to service quality, so that investors are legally bound to operate terminals exactly as they have promised to. 
Without clear regulations, the privatization of airports can lead to bad consequences, particularly risks that an airline with management rights will "bully" other carriers, economist Le Dang Doanh said.
He said the transport ministry must take national security and consumer interest into account when creating legal mechanisms for privatization. 
Transparency
Dinh Xuan Thao, chief of a policy research institute under the National Assembly, said it is also important to evaluate the terminals and decide how much they should be sold for, so that the state will not suffer losses.
The prices must be publicized, he said. 
Tran Huu Huynh, chairman of Vietnam International Arbitration Center, agreed, saying investors must be chosen through public and transparent calls for bids.
Vietnam needs to learn from other countries that have already succeeded in privatizing their airports, Huynh said.
Under a tentative plan, the transport ministry wanted to transfer the rights to operate a number of terminals at major airports, including Noi Bai, Cam Ranh near the central resort town of Nha Trang, and Da Nang, in order to attract more funds into the aviation sector.
It also considered putting the sole airport on the resort island of Phu Quoc up for sale, as a whole.
The privatization plan is now being drafted by the Airports Corporation of Vietnam, which currently manages 22 international and domestic airports across the country.

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