The ceremony to kick off construction of Long Thanh International Airport last week in Dong Nai province, 40km east of Ho Chi Minh City, marks bright prospects for developing the area as a whole into an airport city, and thereby pushing up the real estate market.
|The long-awaited groundbreaking ceremony for kicking off construction of Long Thanh International Airport took place on January 5
By Su Ngoc Khuong - Senior investment director Savills Vietnam
The area around the future aviation hub will boast favourable conditions to become an airport city when Long Thanh International Airport is finally put into operation and the services system is developed, and it would be the first such so-called airport city in the entire country.
Long Thanh will be the largest ever airport in Vietnam, with total capital of up to $16 billion and annual capacity for 100 million passengers, and is being considered as a huge competitive advantage in economics, politics, culture, and tourism for Dong Nai compared to neighbouring provinces and beyond.
Over the years, the province has created convenient infrastructure, technology, and transportation systems. It now the hub of the eastern region of Ho Chi Minh City – and in addition, it has straightforward connections with other provinces such as Binh Duong and Long An, as well as the Cai Mep-Thi Vai port complex.
Apart from the government side, domestic and foreign enterprises will have to be mobilised for an airport city to eventually come to fruition.
There should be solutions to connect the public and private sector, and bind foreign and domestic investors as well as experts not only in Vietnam but overseas, while applying advanced models based on those found in Japan, South Korea, and Europe.
To solve the issues between public and private funding, the most important factor is still how to harmonise the benefits between economy and politics. In addition, there should be advisory groups to help provincial and government people's committees to achieve this project’s goals.
The transparency in mobilising investment capital sources from different sectors is seriously needed for this project.
In order to successfully set up a Long Thanh airport city, there will need to be a comprehensive master plan for developing Dong Nai as a whole, and attracting international investment.
Foreign investors will consider several aspects when considering pouring money into such a venture, including policy stability, financial capacity, local authority capacity to develop large-scale projects, and the long-term development prospects over the next few decades.
Once the airport is completed, the question of whether the project can become an airport city will depend on the determination of many generations of local authorities, under the direction of the central government.
Completing Long Thanh International Airport will not mean that we have reached the ultimate goal in the industrial and service sectors for Dong Nai – and we will still have to be in charge of how to entice more investors to the province as a whole.