ACV to come back 100 per cent state-owned enterprise?

The MoT would return ACV into the folds of the state to allow it to maintain aviation infrastructure

The Ministry of Transport (MoT) has recently tabled a proposal for the prime minister on the re-acquisition of the foreign-owned stake in ACV to make it once again a wholly state-owned company in order to ensure national security.

At present, MoT is currently the largest shareholder of ACV with 95.4 per cent. With the market cap of VND180 trillion ($7.82 billion) as of September 3, ACV is the sixth largest enterprise on the Vietnamese stock market. It is also an attractive stock in the eyes of a number of foreign investment funds, including Dragon Capital and VinaCapital.

According to the MoT, after the equitisation of ACV, the ministry was left in charge of the assets relating to aviation infrastructure and airports. Thus, the arrangement of capital for maintaining runways, parking bays, and terminals, as well as machines and equipment directly serving flight operations such as ILS precision takeoff systems are the responsibility of the state – and ACV does not have the competence to deal with them.

To date, numerous infrastructure elements, including runways and parking bays at Tan Son Nhat and Noi Bai International Airports are overloaded and are falling into disrepair. The MoT reported this problem to the prime minister and proposed the government to arrange VND4.2 trillion ($182.6 million) from the mid-term public investment fund. However, there is no regulation for using the mid-term investment fund, especially the one for 2016-2020, for the maintenance of the aviation segment.

The MoT also proposed that it is necessary to link ACV's responsibility in managing and exploiting aviation infrastructure with the responsibility to invest, upgrade, and expand aviation projects. Thus, in the proposal, the ministry also wants all public aviation infrastructure transferred to ACV until 2025, after which it would review and return them to the government.

This would allow ACV to invest in upgrades or the maintenance of aviation infrastructure, which it normally could not do because these assets are being managed by the state.

ACV has expressed interest in becoming the investor of numerous aviation projects, including building Terminal T3 at Tan Son Nhat International Airport, rebuilding the old Na San Airport in Son La with the investment capital of VND2.3 trillion ($100 million), as well as joining key items at Long Thanh International Airport in the southern province of Dong Nai. Besides, most recently, ACV is racing Vietjet to become the investor of the expansion project of Dien Bien Phu Airport.