Last update 1/4/2012 2:00:00 PM (GMT+7)

Vietnam urged to call up private capital for airports and seaports

VietNamNet Bridge – No government in the world can have enough money to build all infrastructure items. Therefore, governments have to call for private investment and foreign direct investment FDI for port development. The only thing the governments need to do is to set up reasonable policies to ensure profits for investors and the smooth operation of the infrastructure works.

The final report of the project on sharing development experiences of South Korea released by the Ministry of Planning and Investment and the Republic of Korea’s Development Institute (KDI) has pointed out that privatizing or internationalizing the investment capital for airports and seaports is considered the key solution to the problems of the two fields.

According to Professor Yeong Heok Lee from the South Korea’s Aviation University, there are 22 airports in Vietnam being used for the civil service, including the three biggest ones – Noi Bai, Da Nang and Tan Son Nhat. The three airports account for 85 percent of the total passengers. Meanwhile, other local airports are too small with poor material facilities, few passengers. Especially, the airports cannot provide runways for big aircrafts.

In Vietnam, the biggest problem is the lack of the state budget for infrastructure development. In the period of 2001-2010, the total investment capital for aviation transport only amounted to 6 percent of the total investment capital for transport in general, about 2.1 billion dollars. However, 80 percent of the sum of money has been spent on buying aircrafts, while the modest sum of 190 million dollars has been spent on the airports.

He has urged the government of Vietnam to allow international airports in Vietnam to satisfy their investment demands by attracting private capital and FDI capital under the mode of BTO (build – transfer – operation). Meanwhile, the government needs to gather strength on upgrading the capability of local airports.

Regarding the aviation policies, he has suggested that Vietnam should maintain a market with healthy competition and should private airlines. The government of Vietnam should not intervene in the market or protect big airlines with subsidization.

Especially, the airports in Vietnam should reduce the fees on airlines to the levels lower than that set up by other regional airports. Once airports can attract more aircrafts, Vietnam would be able to earn more profits from commercial activities at passenger terminals which would serve as the investment resources for airports.

Commenting about Vietnamese seaport system, Dr Beom-Hung Kim, a researcher of the South Korea Maritime Institute, said that the biggest obstacle here in Vietnam is the lack of the technical facilities. Meanwhile, Vietnam is still applying backward technologies which lacks the connectivity with the transport infrastructure and the centers of the logistics system. Besides, the lack of deep water ports for big container ships in accordance with international standards has also been cited as a big problem of Vietnamese seaports.

In terms of mobilizing resources for seaport development, instead of drawing up a consistent investment program which serves the sustainable development with clear priorities, every investor build ups his specific plan and asks for state budget allocation to run the project.

As a result, the investor, who has good relations with the high ranking officials and can access loan sources, would be able to implement his project first, even though the project is not the most important.

Sharing the same viewpoint, Dr Chu Quang Thu, former Head of the Vietnam Maritime Bureau, said that with the seaport development program 2020-2030, Vietnam would weed it out from the international playing field, when it would still lack deep water seaports, capable to receive big tonnage ships.

Dr Beom-Hung Kim thinks that the government of Vietnam needs to collect statistics about the use of seaports and build up an information system on port operation.

Source: TBKTVN