Construction project of Long Thanh International Airport.
Investor: Vietnam Airport Corporation (AVC)
Location: Long Thanh District, Dong Nai Province.
1. Overview about the Project:
Tan Son Nhat International Airport is the only international airport in the planned Ho Chi
Minh City Metropolitan Area (covering 30,404 square kilometres (11,739 sq mi), with an
estimated population of 20-22 million inhabitants by 2020. Tan Son Nhat's location
inside the crowded Saigon where growth is limited. Due to location and safety issues, it
is difficult to expand to meet the increasing annual growth of passengers. The maximum
capacity of Tan Son Nhat is 25 million passengers per annum but in 2016 it handled 32.5
million.
While the number of international visitors to Vietnam has increased rapidly year by
year, the growth rate of passengers is about 15-20% on average per year and the
potential domestic aviation market. In addition, the Vietnamese government recognizes
that it is necessary to have a large-scale airport to compete economically with other
major transshipment airports in Southeast Asia in particular and Asia in general.
Therefore, the idea of a new airport was born to promote the economy of the Southern
region and the whole country.
Ho Chi Minh City - Dong Nai area has a very favorable position, the Vietnamese
government has determined. Long Thanh airport will be an air entrepot port and an
aviation capital of the whole country as well as internationally in order to attract transit
passengers and transit flights here to gain economic benefits. In addition, there will be
an international aviation service center with many services such as petroleum supply,
maintenance, upgrading, aircraft repair ... for domestic and international airlines.
Therefore, the ability to contribute to the economic development of Long Thanh airport
is very large, according to the research of Hansen Partnership of Australia, Long Thanh
airport will contribute 3-5% of the country's GDP.
When Long Thanh airport is put into operation, it will assume 80% of the total number
of international passengers including transit passengers on international flights and 20%
of domestic passengers, while Tan Son Nhat airport will be mainly Serving domestic
flights with 80% of domestic passengers and 20% of international passengers but not
transit and transit flights on international flights.
2. Project Process:
a. Cost – Expense:
Investment capital for the project is mobilized from many sources: the
Government's development investment fund, government bonds, shares and foreign
investment. From 2011 to 2014, deploying investment reports and arranging capital
for the project. The estimated construction cost for the airport until 2050 with 3
phases is 18 billion USD, which is considered to be "surprisingly expensive".
b. Timeline in Detail:
c. Master Plan:
The Master Plan for Long Thanh International Airport was approved by the Prime
Minister Phan Văn Khải in 2006 and several adjustments have been made through
time. The project faced mixed public reaction for its expensive cost and far distance
from the center of Ho Chi Minh City.
Based on the demand of transportation, the investment will be divided in phases.
The Southern Airports Corporation (a company under the Ministry of Transport
(Vietnam) is in charge of development of this project.
a. Phase 1 (2021 – 2025) The first phase is estimated to cost US$7.8 billion and will
be divided into 3 sub-phases.
Phase 1A (2021 – 2023) According to the original plan, the airport would handle 25
million passengers per year after this phase is completed; however, the proposed
capacity was later lowered to 17 million passengers per year to reduce construction
cost. US$5.6 billion will be allocated to this phase. One terminal will be built along
with a single runway.
Phase 1B (2023 – 2025) Another runway will be built and increase the total capacity
to 25 million passengers per annum.
Phase 1C (2025) The rest of necessary facilities will be built and land-clearance for
future phases will be made. The airport will begin operating in 2025.
b. Phase 2 (2025 – 2035) The capacity will be doubled to 50 million passengers per
annum and the third runway will be added when the phase is finished, which is
scheduled to be in 2035.
c. Phase 3 (After 2035) The airport will reach its maximum designed capacity at 80100 million passengers and 5 million tonnes of cargo per year. Four runways will be
operational after the third phase.
Traffic Connection Planning
In order to promote the effectiveness of Long Thanh International Airport, the
Ministry of Transport and Ho Chi Minh City, Dong Nai has agreed a traffic connection
plan with Long Thanh airport, including the Thu Thiem light rail - Long Thanh, Ho Chi
Minh City - Long Thanh - Dau Giay highway, Ben Luc - Long Thanh highway, Bien Hoa
- Vung Tau highway, belt road 3, belt road 4, Provincial highway 25 C (Nguyen Ai
Quoc road), Ton Duc Thang street are constructed to expand to 8 lanes and are
expected to be completed in 2020.
3. Difficulties:
High risk because of the huge investment fund 15,8 billion USD when Vietnam’s public
debt occupied 60% GDP.
The unclear management ability for a complex technique required project. The big scale
of project is also a factor that can lengthen the construction time like highway Hanoi –
Hai Phong.
To be able to construct, there are 280 families are being affected by the project, the
compensation for those families is also a difficulty for government.
The negative impact of COVID-19 can delay the process of the project. Vietnam’s
economic is vulnerable after 4 months fighting with virus so the Long Thanh project can
be delayed until the economic can be recovered.
4. Lesson learned:
Dong Nai province needs to focus on clearance for Long Thanh project, disbursement
17.000 billion in this year. The fund is huge so in order to finish the project in time, all
resources need to highly focus on the project.
The compensation process for citizen also needs to perform smoothly in order to avoid
accidents like some projects in the past.
ACV should hire professionals to expertise the reports, business plans to reduce the
risks.