NA approves special site clearance mechanism for Long Thanh International Airport

June 22, 2017 | 10:56

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With decisive majority, the National Assembly (NA) has passed the resolution on dividing Long Thanh International Airport’s resettlement and site clearance compensation into different component projects.

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A careful consideration

At the June 19 meeting, the National Assembly Standing Committee said that the Long Thanh International Airport project has been seriously considered by the government for a very long time. Also, when giving the in-principle agreement to implement the project, the NA carefully considered many aspects and was clear on the necessity of the component projects.

The overload of Tan Son Nhat International Airport and the increasing demand for air transportation lead to the urgency to build Long Thanh International Airport.

As site clearance is time-consuming and may hold a lot of obstacles, potentially increasing costs if the site clearance period is extended, the NA Standing Committee proposed to divide resettlement and site clearance compensation into different component projects in order to ensure the project stays on schedule and to cut expenses.

Shortage of fund for site clearance

Numerous NA deputies requested the government to clarify the funds used for resettlement and site clearance compensation.

The NA Standing Committee said that based on the obtained information and the latest updated prices from the Dong Nai People’s Committee, the total estimated cost for site clearance, including the construction of resettlement and cemetery areas, is about VND23 trillion ($1 billion).

Currently, the government provides the Long Thanh project with VND5 trillion ($220 million) for the medium- and long-term plans on site clearance. However, this amount accounts for only 21.7 per cent of the actual funds necessary.

After resettlement and site clearance compensation are allowed to be divided into component projects, the government will direct related agencies to conduct a feasibility study report for each smaller projects as well as a detailed site clearance plan in order to calculate the exact amount of investment needed. This will be a foundation for the prime minister to direct related agencies to carefully prepare the needed capital and report to the NA for consideration.

The resolution on dividing resettlement and site clearance compensation into component projects stipulated that the total land area for the Long Thanh International Airport project was 5,000 hectares, including the acreage for resettlement and cemetery areas, as well as other auxiliary construction.

In accordance with the documents that will be submitted to the 2017 annual shareholders’ meeting at the end of June, Airports Corporation of Vietnam (ACV), the developer of Long Thanh International Airport, will deploy six projects on upgrading aviation infrastructure nationwide with the total investment of about VND6.050 trillion ($266.2 million).

Among these six projects, the project on expanding the 21-hectare airfield and two passenger terminals of Tan Son Nhat International Airport will receive the largest investment sum of about VND2 trillion ($88 million).

In 2017, ACV targets to handle 91 million passengers and 1.182 million tonnes of cargo. These figures are 13 and 5 per cent higher than last year’s target. It is expected that total revenues generated will be VND13.293 trillion ($584.9 million), pre-tax profit will be VND3.669 trillion ($161.4 million), and the dividend payout ratio will be 9 per cent.

One of ACV’s core missions in 2017 is to restructure the company and negotiate with its strategic shareholder Aeroports de Paris (ADV). Previously, in March 2017, according to newspaper Nikkei Asia Review, the Vietnamese government has given permission for ACV to sell 20 per cent of its stakes to ADP. Thus, the Ministry of Transport’s stake in ACV decreased to 75 per cent from the previous 95.4 per cent.

By By Trang Vu

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