PPP deal preferred for airport

According to the local people’s committee the investor and the local authorities discussed the advantages of the public-private-partnership (PPP) model over the build-operate-transfer format two weeks ago.

Nguyen Van Thanh, Vice Chairman of Quang Ninh Provincial People’s Committee, said the Korean investor believed the airport project would be more feasible if it was conducted under the PPP model in which the state would also be liable for a share in the risk.

“We haven’t yet replied to Joinus, as the decision as to whether it becomes a PPP project would need to be discussed with relevant governmental agencies and receive a stamp of approval from the prime minister,” said Thanh.

However, it would not be surprising if the Joinus proposal was accepted as the Vietnamese government previously earmarked aviation infrastructure as a priority sector for applying the PPP  model.

Van Don international airport would represent a key infrastructure project in the Quang Ninh Economic Zone. Located near the world heritage Halong Bay, the Vietnamese government has long regarded the site as an ideal location for the development of a trading and high class tourism hub, helping develop the key northern economic region.

Once completed, it would become the third international airport in Vietnam’s northern region, joining Noi Bai in Hanoi and Cat Bi in Haiphong.

The project was initially proposed by the US-based Rockingham Asset Management LLC, but the firm had to withdraw from the project because of the global financial crisis.

Two years ago, Joinus announced that it had replaced Rockingham. The Korean investor also proposed to build a $1.5-2 billion motorway connecting Quang Ninh’s Halong city and Van Don island.

In February 2012, the South Korean firm signed a memorandum of understanding with Quang Ninh Provincial People’s Committee, underlining its commitment to invest in the projects.

At the meeting with Quang Ninh Provincial People’s Committee two weeks ago, Thanh confirmed that the investor had sent the local authorities plans for project funding and predictions of aviation transport demand in the province.

Thanh believed the airport would be a driving factor in the development of the Quang Ninh Economic Zone as many investors were waiting for the airport to go ahead before committing funding to the zone.

Positioned on the border of China’s Guangxi province and bordering Haiphong city, Lang Son, Bac Giang and Hai Duong provinces, Quang Ninh is emerging as an attractive destination for investment in the north of Vietnam.