Vietnam needs US$18bn to upgrade airports by 2030

Out-Law News | 25 Nov 2021 | 2:13 am | 1 min. read

Vietnam will need VND400 trillion (US$18 billion) to upgrade its airports from now until 2030.

The figure comes from a master plan on the country’s airport network development needs over the 2021-2030 period and future plans to 2050, which Vietnam’s transport ministry has submitted to the government, according to a local report.

Vietnam has two main air hubs:  Noi Bai international airport in Hanoi in the north, and Tan Son Nhat international airport in Ho Chi Minh city in the south. A further international airport is under construction in south Vietnam: Long Thanh international airport in Dong Nai province.

Besides these three airports, 19 other airports across the country will be upgraded and six new airports built in the next 10 years under the master plan, giving a total of 28 airports. One more airport will be built by 2050 for a total of 14 international and 15 domestic airports. Public-private partnerships (PPPs) will be preferred for delivery of the new airports.

James Harris of Pinsent Masons, the law firm behind Out-Law, said: “This is a familiar story in Vietnam. Airport development has been a focus of the Vietnamese government for some time, and the different airport authorities across the country have struggled to make much real headway. However, earlier this year the government enacted Decree No. 05/2021/ND-CP on the management and operation including investment of airports and airfields in Vietnam, replacing the old Decree No. 102/2015/ND-CP. This bodes well for potential long-term investors.”

“The Airports Corporation of Vietnam (ACV) has identified that US$5bn is needed to be invested from 2021 to 2025. Notwithstanding depleted global travel over the past two years, Vietnam is forecast to be one of 10 countries with the fastest growth in air passengers from 2018 to 2040. So the plan to seek investment of US$18bn on upgrades is a consistent theme coming out of Vietnam,” he said.

The plan also focuses on the expansion and construction of airports in remote, mountainous and island areas.

According to another report, Vietnam’s transport ministry has proposed to amend and supplement some relevant legal provisions in order to give local governments more powers to encourage private investment. The PPP model, with local governments as the public sector partner, will be preferred for the delivery of the majority of new airports. However, those airports which are important to national security, including those in border and island areas, will be invested in by the state government.