Long road ahead for Long Thanh Airport funding

Monday, Oct 27, 2014 10:25

Compiled by Le Hung Vong

Shopkeepers at An Dong Plaza march to protest the managers' decision to increase rent fee and shortened lease periods. – Photo Zing.vn

(Biz Hub) – French company ADPi, a fully-owned subsidiary of the Aeroports de Paris Group (ADP), has said it did not promise to invest US$2 billion in building a new international airport in Dong Nai Province as claimed by a local official last week.

An ADPi spokesperson told Tuoi Tre (Youth) newspaper that no such commitment exists.

ADPi specialises in airport architecture and engineering rather than investments, the spokesperson said.

The French company also said on its website that it served as a consultant to the Japan Airports Consultants on Long Thanh airport.

"The information about ADPi's negotiations with the Ministry of Transport and its commitment to fund the project to build Long Thanh International Airport is incorrect," Tuoi Tre quoted an announcement released by the Ministry of Transport released on Wednesday as saying.

The Transport Ministry explained that through correspondence and meetings with the Ministry and other Vietnamese Government agencies, the French company Aeroports de Paris Management (ADPM), a French company specialising in overseas aviation development and investment under the French group Aeroports de Paris (ADP), said they expected to arrange funding of $2 billion for Long Thanh Airport Project.

On 27 February 2013, the Ministry of Transport was assigned to receive Jacques Follain, managing director of ADPM, to talk about construction of Long Thanh Airport project.

After that meeting, Deputy PM Hoang Trung Hai asked the Transport Ministry to appoint Airports Corporation of Viet Nam (ACV) to work with ADPM and to make a report on the foreign partner's capacity in the project to the Prime Minister.

In an online talk on Long Thanh International Airport project organised by the Government web portal on October 17 of this year, Deputy Minister of Transport Pham Quy Tieu said ADPi, a leading airport design firm of France, had promised to arrange commercial loans totaling $2 billion for the project while Japan had yet to decide on a specific funding amount.

The ADPi's claim (denying of its funding of $2 billion to Long Thanh Airport Project) came shortly after the Japanese Embassy rejected the information about Japan's funding for Long Thanh Airport Project.

The rejection was released after Tieu stated that "Japan has shown an interest in the project and pledged to lend us $2 billion" and his statement was quoted by local media. Tieu later apologised for the mistake.

According to Viet Nam's Deputy Minister of Transport Nguyen Hong Truong, construction of the Long Thanh International Airport will cost more than $18 billiion for all three phases.

Approved by the Prime Minister in June 2011, Long Thanh Airport is scheduled to open to the public in 2020 after the first phase of development, according to Dong Nai Provincial authority.

The airport, in Long Thanh District of Dong Nai Province, some 40km to the east of HCM City, is to be built in three phases. It is expected to be fully operational by 2035, with an annual capacity of 100 million passengers.

Fisheries exports

In the first nine months of the year seafood accounted for US$1.84 billion of the country's total fisheries exports of $5.75 billion, according to figures from the Viet Nam Association of Seafood Exporters and Processors (VASEP).

Viet Nam, the fourth largest exporters of molluscous products to Japan, accounts for 14 per cent of that country's total imports, but faces harsh competition from other big suppliers like China, Morrocco, Thailand, and Mauritania.

This year most fisheries products processed in Vietnamese plants were imported from India while processing plants in other countries, which are often 10-50 times bigger in terms of capacity, buy locally. This makes Viet Nam less competitive than other countries in the Japanese market.

Exports of cuttlefish and octopus to South Korea were worth $107.2 million, a year-on-year increase of 32.8 per cent. South Korea accounts for 35 per cent of Viet Nam's exports of these products.

Viet Nam is now the second largest supplier of molluscous products to South Korea, just behind China, with a monthly increase of 8 to 30 per cent in export values.

To boost exports to South Korea in the last quarter of this year, Vietnamese exporters have to increase imports of raw materials for their processing lines.

In the first three quarters of the year export of cuttlefish and octopus to European markets were worth $52.7 million, up 14.3 per cent compared with the same period of 2013. Seafood exports to Spain rose by 128.7 per cent.

Meanwhile, weak demand for cuttlefish and octopus in the Russian and Australian markets saw exports of these products to the two markets drop by 30 per cent and 2 per cent.

HCM City market

Shopkeepers at An Dong Plaza in HCM City's District 5 continued to protest against the management's plans to raise rents and shorten lease periods.

They said just last year shops were leased for a period of 10 years at rents ranging from $15,000 to $20,000 each for the period. But new contracts to be signed when 300 contracts expire next February are for just five years and with the rents doubled.

Ho Thi Thanh Loan, who has a shop on the second floor of the market, said many shopkeepers were unhappy after the management told them to register to retain their shops within 30 days. If they do not, their shops would be leased to new tenants.

"It is unfair," she said.

"Frankly speaking, it is our business here over the past decades that helped build the An Dong Plaza brand name. They have not respected our contribution to the development of the business centre."

Shopkeepers believe that it will be very difficult for them to do business in a situation of higher rents and shorter lease periods.

In reponse to shopkeepers' complaints, the deputy head of the management, Nghiem Bich Ha, told Tuoi Tre that the new rents and leasing terms had been carefully considered.

A 20 per cent discount on the new rents was being contemplated, she said.

The management had taken all proposals on board, she added. — VNS

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