ACV asks to borrow US dollars for Long Thanh airport project

Wednesday, Jun 16, 2021 18:09

The design of Long Thanh International Airport in Dong Nai Province. — Photo courtesy of ACV

The State-run Airports Corporation of Viet Nam (ACV) has said it wants to borrow US dollars from local banks for the country's largest airport project, Long Thanh International Airport in Dong Nai Province.

ACV’s chairman, Lai Xuan Thanh, sent a report to the Economic Committee of the National Assembly, asking them to support the plan of borrowing and paying in US dollars in order to maximise benefits and efficiency.

Thanh said as the interest rate in the foreign currency was lower than the Vietnamese dong, it would help the firm to save on costs.

According to ACV’s leader, phase one of the investment project, estimated to cost about US$2.5 billion, was being focused on, but the COVID-19 pandemic had a great impact on economies around the world and in particular the aviation industry.

As all international commercial flights were stopped in Viet Nam, it affected ACV's main source of foreign currency revenue, while the outbreaks in some localities also significantly reduced domestic passenger volume.

Thanh also said the pandemic has made it difficult to negotiate and sign contracts with partner companies as foreign experts had to undergo quarantine.

Moreover, the ACV representative said, the soaring price of raw materials, especially steel prices, was causing difficulties for the project’s implementation.

To deal with all the factors, ACV proposed to the Prime Minister to allow it to accumulate money from production and business activities for investment.

The firm also proposed the PM consider and approve the plan to allow ACV to borrow from domestic state-owned banks in USD and pay in USD to save on interest.

ACV's representative said: “The lending interest rate in USD is always significantly lower than that in VND, while ACV has direct and indirect USD revenue from business activities in international airports such as NoI Bai, Tan Son Nhat and Phu Quoc to pay interest on foreign currency loans.”

Thanh said: “At present, domestic state-owned banks that have a surplus of USD need to find reliable lending partners and bring higher interest rates than deposit rates at foreign banks,” adding such a lending option could ensure benefits for the State and improve project efficiency while preserving and developing state capital in ACV as a state-owned enterprise.

Also to ensure the progress of Long Thanh Airport project in the context of the pandemic, ACV suggested the National Assembly direct the relevant authorities to soon apply measures to stabilise the price of materials as well as support the plan of borrowing and paying in USD to ensure maximum efficiency.

In April this year, ACV, which is the investor of the expensive and ambitious transport hub project in the southern province of Dong Nai, committed to start construction of Long Thanh International Airport’s passenger terminal early next year.

As Long Thanh International Airport is one of the breakthrough projects of the national transport sector in the 2021-25 period, deputy transport minister Le Anh Tuan urged all parties to coordinate and facilitate the progress of all components of the project and disburse the allocated State capital.

According to ACV, Long Thanh International Airport will be built in three phases over three decades. In the first phase, one runway with a length of 4,000m, taxiways, an apron, and a passenger terminal with other auxiliary works sprawling 373,000sq.m will be built to serve 25 million passengers and 1.2 million tonnes of cargo each year.

The airport, which was expected to cost VND336.63 trillion ($14.5 billion), is designed to have four runways, four passenger terminals, and other auxiliary facilities to ensure a capacity of 100 million passengers and 5 million tonnes of cargo a year by 2040. — VNS

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