HANOI - Vietnam's
aviation industry will need US$12 billion in
development money for the 2005-25 period to reach
its target of fourth position in the ASEAN bloc by
2025.
To procure such an amount, better
policies to attract foreign investment must be
established since domestic resources remain poor,
said industry analysts.
"The state budget
only meets one fifth of the total investment
capital," said Dinh Viet Thang, chief of the Civil
Aviation Administration of Vietnam's (CAAV)
Planning and Investment Department. Invitations
for investment have been extended to both foreign
direct investment (FDI) and Official Development
Assistance (ODA) resources.
However at
present, foreign-invested capital only constitutes
a tiny portion of the industry's investment,
including projects from
Japanese ODA resources to
construct two terminals at Ho Chi Minh City's Tan
Son Nhat and Hanoi's Noi Bai airports.
Since half of the capital needed will be
spent on aviation infrastructure development, many
international investors are wary of investing in
activities that do not promise short term profit,
said experts.
In terminal construction,
investors may only receive a profit when the
number of passengers travelling via the airport
reaches 6 million annually and presently only Tan
Son Nhat Airport secures this figure.
Recently, a Hong Kong company expressed
interest in constructing an airport in Phu Quoc,
but the project did not pass due to special
conditions aimed at ensuring national security.
The project is pending while amendments are being
made to the Law on Aviation.
Also in 2004,
the UPS group of the US planned to set up an
express service center in Da Nang's Chu Lai
Airport. Local officials sought government
approval, yet the company later withdrew its
plans.
In order to lure overseas investors
into this field, it is urgent to issue open,
simplified, stable and attractive policies, said
an official from the CAAV. Deputy Minister of
Transport and the CAAV director, Nguyen Tien Sam,
said that Noi Bai International Airport will add a
new terminal to increase its handling capacity,
Chu Lai Airport will be upgraded into a cargo
center capable of handling 4.5 million tonnes a
year and Tan Son Nhat Airport will be expanded by
the end of this year.
In addition, he
said, the government will make Long Thanh Airport
in the southern province of Dong Nai one of the
largest international airports in the region,
capable of welcoming 15 million passengers a year.
Since 1993, the aviation sector has poured
VND1.57 trillion ($98.4 million) into upgrading
Noi Bai, Tan Son Nhat and Da Nang international
airports as well as 22 airports across the nation.
Investment has helped the sector increase
its passenger transport capacity from 1 million
passengers in 1990 to 13 million in 2005.
