Vietnam aviation sector needs more funds to develop
HANOI - More airports and better infrastructure are needed if Viet Nam's increasingly busy air transport
systems are to cope with the rising demands placed on them in the decades ahead, say aviation experts.
The country's 18 domestic and international airports are already operating at high intensity levels and civil aviation is now
considered the nation's key transport sector, the experts say.
But infrastructure development is not keeping pace with the fast-growing demands from aviation systems, they say.
Air transport is currently reported to be growing at a rate of 20-25 per cent and is expected to stabilise at 12-15 per cent in
2005. An estimated 12 million passengers will pass through Viet Nam's airports this year.
Yet most of the country's airports were built in the 1960s and limited funding has led to poor maintenance of facilities and
equipment. Ageing and worn-out equipment is struggling to cope with an increasing workload.
Experts say it is therefore essential for considerable all-round investment in airport infrastructure in the very near future.
Statistics prepared by economists suggest that by 2010 Viet Nam will need 28 civil airports and another two or three
international airports.
According to World Bank estimates, the bill for that development will be between US$2 billion and $3 billion, a daunting sum
for Viet Nam airlines.
Aviation officials, mindful of the high price tag, say the industry should therefore focus its investment on key infrastructure
targets.
They plan to mobilise $400 million of State budget funds by the end of this year to invest in major airports in three key regions -
Noi Bai in the north, Da Nang in the central region and Tan Son Nhat in the south.
Noi Bai Airport's T1 international terminal development project is in its second phase of construction. Once complete the $50
million terminal will be able to receive up to 6.5 million passengers a year.
In tandem with this project, Noi Bai Airport aims to raise a further $40 million, in loans or through establishing a joint-venture,
to upgrade its cargo terminal to have an annual handling capacity of 120,000 to 150,000 tonnes.
Tan Son Nhat International Airport, which has the highest-density air traffic nation-wide and is growing at a rate of 30 per cent
each year, also has two infrastructure projects on the go.
The first, funded by the airport's own revenue, will expand its existing terminal.
The second, due for completion next year, is a new 100,000sq.m international terminal capable of receiving up to 10 million
passengers a year.
The central region's Da Nang Airport, meanwhile, has a $50 million upgrade underway of its runways and terminal which will
increase its annual passenger capacity to one million people.
The World Bank has said that the Southeast Asian market represents a great opportunity for Viet Nam's air transport industry,
making infrastructure development not only justified but necessary.
However, the bank said, State management organisations and investors would have to work well together to ensure
development plans succeeded.
Legal regulations for the sector should be finalised and would-be investors should be well-supplied with information to
encourage their interest in aviation infrastructure projects.
Vietnam News Agency - October 19, 2000.
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