Lawmakers have asked the transport ministry to clarify how the government will mobilize funds to build a planned US$7.8 billion airport outside Ho Chi Minh City amid rising public debts.
While the ministry suggested that $3.98 billion of the budget for the planned Long Thanh Airport come from government funds, bonds and official development assistance (ODA), it has yet to specify precisely how the funds will be mobilized, Nguyen Van Phuc, deputy chairman of the parliamentary Economic Committee said at a meeting of the National Assembly -- Vietnam's legislature -- on Wednesday.
“This project is supposed to use funds from the state budget and loans from international agencies in the context of rising public debts and a strained budget, so the funding must be considered carefully,” Phuc said as he was reading from a report prepared by his committee during the meeting in Hanoi.
“Moreover, the aforementioned investment capital is just ‘an estimate’,” Phuc said, adding that the real cost may be much higher.
A digital rendering of Long Thanh airport in the southern province of Dong Nai, around 40 kilometers to the northeast of Ho Chi Minh City.
Under the transport ministry’s plan, the remaining $3.76 billion of the cost will be mobilized from businesses. But Phuc warned this would be risky given that the economy “is still facing many difficulties.”
Worse still, the US$7.8 billion investment will only cover the cost of the first phase of the Long Thanh airport, which is planned to consist of two runways and a terminal capable of accommodating 25 million passengers annually.
If the estimated costs of all three phases are taken into account, they will surely be colossal, according to Phuc.
Work on the first phase of Long Thanh airport, some 40 kilometers (25 miles) northeast of Ho Chi Minh City, is projected to start in 2016 and finish in 2023.
The second phase is slated to be built in 2023 to increase the airport's annual capacity to 50 million passengers in 2025. The third phase is expected to raise the capacity to 100 million passengers.
Transport Minister Dinh La Thang told the meeting that building the Long Thanh airport is essential and urgent because Ho Chi Minh City’s Tan Son Nhat airport will soon be overloaded.
An estimated 40 million passengers are expected to head to the city by 2025 and the airport received just 20 million passengers last year.
Ksor Phuoc, chairman of the National Assembly's Ethnics Group Council, said he backed the Long Thanh airport project. But like other lawmakers, he expressed concerns about the funding plan.
“The house decided not to issue government bonds in 2015, so where will the funds come from? It is important to clarify that question at the upcoming session of the assembly,” said Phuoc, “Will it need to issue an additional resolution [to sanction a bond issuance next year]?”
The full house will vote on the airport project during its upcoming session, which is slated to open on October 20.