Adjustment of Investment Policy for Sa Pa Airport Project
Recently, Deputy Prime Minister Tran Hong Ha signed Decision No. 1621/QD-TTg to adjust the investment policy for the Sa Pa Airport Construction Project (Lao Cai province) under the public-private partnership mode.
Regarding the expected timeline for the project, according to the initial investment policy, the expected implementation period was 50 years (expected construction time: 4 years; operation, exploitation, and capital recovery time: 46 years).
Decision No. 1621 makes the following adjustments:
Expected project duration: Component Project 1 (Site Clearance and Resettlement) is expected to take 5 years. Component Project 2 (Airport Construction): Contract term of 47 years.
Expected project progress: Phase 1 to be implemented from 2021; Phase 2 to be implemented from 2028.
Regarding the expected land use needs: the expected land use requirement remains unchanged at 371 hectares. However, Decision No. 1621 states that site clearance for the entire 371 hectares will be completed in Phase 1, by the end of 2025.
Sa Pa Airport Perspective. Source: People’s Committee of Lao Cai Province
Preliminary total investment for the project remains unchanged at VND 6,948,845 billion, with adjustments made to the investment level in each phase.
Total investment in Phase 1 is VND 4,295,289 billion (an increase of more than VND 111 billion compared to the initial policy), of which Component Project 1 – Site Clearance and Resettlement: VND 555 billion; Component Project 2 – Airport Construction: VND 3,740,289 billion.
Total investment in Phase 2: VND 2,653,556 billion (a decrease of more than VND 111 billion compared to the initial policy) for Component Project 2 – Airport Construction.
Capital structure has also been adjusted. According to Decision No. 1621, in Phase 1: Capital mobilized by the investor (owner’s equity, credit capital) is VND 2,192,918 billion; state capital participating in the project is VND 2,102,370 billion.
Capital structure in Phase 2: Capital mobilized by the investor (owner’s equity, credit capital) is VND 1,339,845 billion; state capital participating in the project, which will be balanced by the locality in the period of 2026 – 2030: VND 1,313,711 billion.
Sa Pa Airport Perspective. Source: People’s Committee of Lao Cai Province
Sa Pa Airport Project Yet to Break Ground
Talking to the Labor Newspaper, the leader of the Lao Cai Provincial Department of Transport said that the reason why the Sa Pa airport project has not started construction as planned is that investors are facing difficulties in capital flow for the project.
Previously, the Sa Pa airport project had been “stirring” since March 2022, and up to now, the compensation, resettlement, site clearance, and land leveling in Phase 1 have basically been completed.
In the past time, the Lao Cai Department of Transport has carried out procedures for selecting investors to start the project. However, after two invitations to bid, even with two deadline extensions, there were still no investors participating in the bidding.
Sa Pa Airport Perspective. Source: People’s Committee of Lao Cai Province
Mr. Nguyen Quoc Huy (Director of the Department of Transport of Lao Cai province) said on VOV that Sa Pa airport is one of the largest projects in the term in the locality, associated with the meaning of a work to celebrate the XVII Congress of the Provincial Party Committee.
To help Sa Pa soon become an international-scale tourist area, Lao Cai is determined to urgently speed up the progress of investing and constructing Sa Pa airport and connecting roads such as expanding the Hanoi – Lao Cai expressway, etc., but finding investors is still difficult.
Therefore, Lao Cai is focusing on and flexibly applying solutions, striving to start the project in the second quarter or, at the latest, the beginning of the third quarter, so that it can be completed by the middle of 2025.
Sa Pa airport is located in Cam Con commune, Bao Yen district, with an area of 370 hectares, and is planned to become a dual-use airport, serving both military and passenger purposes. After the completion of Phase 1, the airport will be able to meet the travel needs of 1.5 million passengers/year by 2026.
The airport will be capable of operating aircraft such as Airbus A320, A321, and equivalents, with 9 aircraft parking positions.
The result of a survey by Times Out travel magazine on attractive destinations in 2024 announced that Sa Pa town (Lao Cai province, Vietnam) is one of the 16 most beautiful small towns in the world. This town has been a famous resort since the 1920s.
Later, Sa Pa town was established on the basis of the entire area of 681 km2 and a population of 66,600 people of Sa Pa district (Lao Cai). Located on the Hoang Lien mountain range with an average altitude of 1,500-1,800 m above sea level, it is the highest town in Vietnam.
In recent years, Sa Pa’s economy has made remarkable progress. Especially, Sa Pa’s tourism industry has boomed, continuously breaking records and becoming a “golden tourist destination” of Lao Cai. Accommodation facilities are always fully booked with an occupancy rate of up to 97%.
The New Vision for the Sa Pa Airport Development Project
Deputy Prime Minister Tran Hong Ha has approved the investment policy for the construction of Sa Pa Airport in Lao Cai Province, which will be carried out through a public-private partnership.
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