The $16 Billion Project: Vietnam’s Largest Endeavor at Risk of Delay

The $16 billion international airport project, slated to be Vietnam's largest, is facing calls for accelerated construction. With component projects still lacking investors, the massive undertaking is at a critical juncture.


Long Thanh International Airport Makes Steady Progress, Surpassing Milestones

The Vietnamese Government Office has issued a notice regarding the conclusions of Deputy Prime Minister Tran Hong Ha during a meeting of the Task Force for the investment project on the construction of the Long Thanh International Airport’s first phase.

Deputy Prime Minister Tran Hong Ha during an inspection tour of the Long Thanh airport construction site. Photo: VGP

According to a report by the Vietnam Airports Corporation (ACV) as of the end of June, the project has largely met its milestones, transforming into a bustling construction site with nearly 6,000 domestic and international engineers and workers.

Thousands of machinery, equipment, and construction facilities have been assembled, installed, and operated to implement the main packages, with construction efforts maximized and carried out continuously day and night to accelerate progress.

The critical components of the project, which are part of Project Components 2 and 3, are being constructed in accordance with or ahead of schedule.

The Long Thanh airport is taking shape. Photo: Dong Nai Newspaper

The passenger terminal construction is 20 days ahead of schedule for the structural work and 10 days ahead of the overall package timeline compared to the contract schedule. The terminal has completed all reinforced concrete columns and beams for the first floor, with 76% of the second-floor beams in place and the third-floor beams currently under construction.

The runway project, with 50 construction sites, is on track to meet its milestones, aiming to complete and technically operate the runway by April 30, 2025, three months ahead of the contract schedule.

Given the progress of these project components, the Deputy Prime Minister commended the efforts and dedication of the involved units.

Component Project 4 Falls Behind

However, the Deputy Prime Minister noted that Component Project 4 is progressing very slowly, lacking a feasible bidding and investor selection process. This delay poses a risk of not completing the project on time, which would impact the operation of the airport and result in a waste of investment capital.

Component Project 4 encompasses several critical structures directly related to technical safety, operation, and maintenance, ensuring the airport’s proper scale and role as an international hub. Notably, the investment in the aircraft maintenance and repair center must meet requirements for technology, capacity, and management in line with international standards.

Steel structure installation is expected to commence in August 2024. Photo: Dong Nai Newspaper

Component Project 4 has a total investment of VND 6,366 billion and comprises multiple structures, each corresponding to an independent project. The list of 11 projects within Component Project 4 includes: investment projects for the construction and operation of ground service vehicle maintenance and aircraft sanitation areas; investment projects for the construction of in-flight catering centers; investment projects for the construction of airline operation centers; and investment projects for the construction of aircraft maintenance centers.

The Prime Minister and Deputy Prime Minister, as head of the Task Force, have provided specific instructions to address the challenges faced by Component Project 4. However, the Ministry of Transport and the Vietnam Aviation Administration have yet to propose feasible solutions for investor selection.

The primary reason for this delay is the limited capacity and experience of the staff, coupled with a lack of discipline and adherence to the conclusions of the Prime Minister and Deputy Prime Minister. The Ministry of Transport bears full responsibility for the slow implementation of Component Project 4, which impacts the overall airport operation and investment efficiency.

The Task Force agreed to assign the Ministry of Transport to coordinate with relevant agencies and report to the Government at the nearest session about the implementation of Component Project 4, identifying difficulties and proposing specific and feasible solutions. This includes recommending the engagement of international consultants with experience in large international airport projects to advise on the overall design and investor selection for the structures within Component Project 4.

In selecting international consultants, it is essential to maximize the provisions of the Law on Bidding to ensure transparency and effectiveness. The Ministry of Planning and Investment should closely coordinate with the Ministry of Transport in the process of selecting international consultants, developing bidding documents for investor selection, evaluating bidding packages, and preparing reports for the Government.

The State Capital Management Committee will direct ACV to consider engaging suitable international consultants to support or coordinate with the overall consultants of Component Project 4 to ensure the project’s synchronization and effectiveness.

Regarding investor selection, the Deputy Prime Minister requested the completion of the bidding process within July 2024. The selection criteria for investors in Component Project 4 should include a division of production and business efficiency among investors, proportional to the scale and development level of the airport across different phases.

For the investor providing aircraft repair and maintenance services, they must possess international investment experience, with priority given to criteria such as capacity, experience, and management, while also considering the overall nature of the project. In establishing the evaluation criteria for investor selection, it is necessary to refer to data and surveys on investment and business efficiency at major international airports and draw on ACV’s experience in investor selection.

The Long Thanh airport project’s first phase is a particularly important national project with significant implications for Vietnam’s socio-economic development. The total investment for the project is estimated at VND 336,630 billion (USD 16 billion), with 4% allocated for the first phase.

Upon the completion of all phases, the Long Thanh airport is expected to serve up to 100 million passengers annually, becoming Vietnam’s largest airport in the future.

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