Vietnam mulls allowing foreign management of local airports

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Buon Ma Thuot Airport in the central province of Dak Lak is used for both military and civil purposes

 

The Civil Aviation Authority of Vietnam (CAAV) has suggested that the Ministry of Transportation allow foreign investors to participate in managing and operating local airports.

 

If approved, the proposal would stimulate potential foreign investment in the field, Lai Xuan Thanh, head of the CAAV, told Tuoi Tre newspaper on May 14.

 

Under Vietnam's master plan for aviation development between 2012 and 2020, the country will need VND221 trillion (US$10.57 billion) to repair and upgrade 26 terminals nationwide, Thanh said.

 

But it will be difficult to carry out the plan if the aviation industry relies only on state capital.

 

It needs to attract investment from other sources, so it is necessary for Vietnam to receive assistance from foreign investors with modern technology, experienced administrative management, and strong financial resources, he said.

 

The leader of the country's aviation industry also suggested that the government categorize the nation's airports into two separated classes.

 

"Vietnam now uses its flight system mutually for both military and civil purposes. Moreover, it is currently stipulated that the terminals must be operated by the state only. These elements have made foreign investors hesitant to invest in Vietnam," Thanh explained.

 

The first class would include terminals which are located at significant gateways of the country and play important parts in the national security. The government will maintain its key role in terms of capital and management, but still allow some spaces for foreign investors to join in, he said.

 

These terminals have high potential for commercial development, and thus are attractive to investors, he added

 

For the second class, CAAV suggested that the government should boosts privatization and allow investors to invest in and operate these terminals.

 

"The CAAV also put forward that the Ministry of Transportation release regulations related to conditions for international investors to take part in the local aviation market before officially proposing the plan to the government", he said.

 

So far, the investor of Singapore's Changi terminal has come to study the airport in the central city of Hue, and a group of US investors also visited the terminal recently, he said. But he admitted  that foreign investors have not yet paid much attention to Vietnam's aviation industry and hoped that the proposal would be approved soon so that it could change their view.

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