Prime Minister Nguyen Tan Dung on Tuesday gave the green light to the construction of an international airport outside Ho Chi Minh City, news website Thoi Bao Kinh Te Saigon (Saigon Times) reported.
The government also asked the Ministry of Transport to clarify details related to the Long Thanh International Airport Project such as its effectiveness and whether funding will be a burden on the country’s public debts.
After the ministry makes amendments to the report, it will act on behalf of the government to deliver the report to the National Assembly, Vietnam's legislature, which will in turn decide if the project will be implemented or not.
Due to its high cost, the planned airport, located some 40 kilometers (25 miles) northeast of Ho Chi Minh City, will receive investment in two stages -- starting in 2016 and 2023 respectively.
The first stage will cost US$5.66 billion and consist of a runway and a terminal capable of accommodating 17 million passengers annually.
The second stage will be built in 2023 to increase the capacity to 25 million passengers in 2025.
In the first stage, the state-owned Airports Corporation of Vietnam (ACV) proposed mobilizing a total of $2.7 billion in government funds, bonds and foreign official development assistance (ODA) to build a main runway, taxiways, a parking area and electrical and water systems.
Other sections including the actual terminal and repair facilities will be built through a public-private partnership (PPP) investment worth $2.9 billion.
The ACV proposed seeking ODA from the World Bank, the Asian Development Bank and Japan, the US, France and South Korea.
A number of investors have reportedly offered to invest in the airport under a PPP including French ADP, Samsung, South Korea's Incheon Airport and Japanese corporations.
The Ministry of Transport also planned to partly privatize the ACV, which manages Vietnam’s 22 civil airports, next year to mobilize more funds for the project.
The airport is expected to become a major transit point in Southeast Asia when it opens in 2023.