Vietnam seeks airport investors in bid to challenge Thailand

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Vietnam is seeking foreign investors to help build two airports so it can compete with other Southeast Asian nations for regional air traffic.

"We are in need of financial investments from many sources, domestic and foreign," Nguyen Cong Hoan, director of planning and investment of a newly-established nationwide airport operator, Airports Corporation of Vietnam, said at a March 9 briefing in Ho Chi Minh City. Overseas investors had already expressed interest in developing Van Don International Airport, in the northern province of Quang Ninh, he said, without giving any specifics.

Vietnam is developing three new airports and upgrading existing facilities in an effort to boost tourism and vie for more international routes. Increased domestic travel, propelled by an increasingly prosperous middle-class, is also spurring demand.

"We're developing a strategy to compete with the neighboring airports in Thailand and Singapore," Hoan said.

Domestic passenger volume rose as much as 19 percent last year, while international passengers grew less than 3 percent, Hoan said.

The first of the planned new airports will open on Phu Quoc by the end of the year, Hoan said at the briefing. The resort island near Cambodia is popular for its sandy beaches and fish- sauce industry.

Vietnam also plans to begin construction in 2015 of the $10 billion Long Thanh International Airport outside the financial capital of Ho Chi Minh in the southern province of Dong Nai. The 5,000-hectare airport, to be built in three phases, is expected to become operational in 2020, with four runways.

Four runways

"We hope that a new and good infrastructure at Long Thanh airport will help us to compete better," Hoan said.

Long Thanh International Airport, about 40 kilometers (25 miles) northeast of Ho Chi Minh's Tan Son Nhat Airport, will initially have capacity for 25 million passengers. That's 50 percent more than the number of passengers who traveled through Tan Son Nhat airport last year. It will also be able to handle 5 million tons of cargo when complete, according to a June statement on the government's website.

Located in a province that's home to industrial parks and rural villages, the new Long Thanh airport will handle 90 percent of international flights to Ho Chi Minh City and position itself as a regional hub, he said. The current airport, which is located in the city and served as a military base during the Vietnam War, will be used to ferry mostly domestic passengers.

No overseas investment

Foreign investors are keen to invest in the construction of the Van Don International Airport, in the north, Hoan said. Vietnam hasn't received any foreign investment in its airports so far, he said.

The Van Don airport would be about 45 kilometers away from the country's iconic Ha Long Bay dotted with hundreds of small, limestone islands and caves.

The provincial government in Quang Ninh is calling for investment in the $1.2 billion airport and a $5 billion casino project, according to its Investment Promotion Agency website.

Vietnam eventually plans to have as many as six international airports, Hoan said. International flights are now mainly routed through three of the country's 21 airports.

Facilities at existing airports are also being upgraded to meet increased domestic demand for travel propelled by the country's young population. About 60 percent the nation's 87 million inhabitants are under 35 years old.

The country has merged three state-owned, regional airport operators under one national, state-owned company that will begin operations April 1, Hoan said. The national body will be responsible for developing all airports across the country, he said.

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