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Mr. Phan Duc Hieu, Standing Member of the Economic Committee of the National Assembly: Airport investment should not stop at "loss or profit"

10:01 | 29/10/2022

VCN - According to Mr Phan Duc Hieu, the benefits of the airport not only stop at the economic efficiency of the airport, which is a loss or a profit, but also indirect benefits and benefits from economic development. - society. Therefore, when deciding to add to the master plan or make a decision to approve an investment policy, the competent authorities should look more broadly at the potential benefits of socio-economic development instead of limiting it in a particular project.

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Mr. Phan Duc Hieu, Standing Member of the Economic Committee of the National Assembly: Airport investment should not stop at
Mr Phan Duc Hieu

Dear Sir, currently, many localities are proposing to build airports. How do you assess this situation?

The proposal of localities is a legitimate need with the desire for local development and must be respected. However, like Lao Cai province, many leaders in their offices have worried about investing in constructing an airport to develop the province, connect with the whole region, and connect internationally.

However, the decision to build or not must go through a scientific, systematic and long-term appraisal process. Localities can consult aviation experts and investors to build airport clusters early. Even localities with airports located close distances will cooperate in developing plans to support the development together. The more carefully calculated, the fewer errors.

From international lessons, we see that the benefits of the airport not only stop the airport efficiency from making losses or profits but also have direct and indirect benefits and socio-economic development. Therefore, I think that to evaluate airport development, it is necessary to look at the overall benefits, potential benefits and other social issues (storms and floods, support).

In your opinion, what are the criteria for choosing to build airports in the localities?

The criteria for airport selection are available, but I want all issues to be transparent and fair, avoiding resentment when one locality can but another cannot. There should be criteria for prioritization. And the planning also needs to be approved soon so localities can base it on that to implement their needs.

In my opinion, it is advisable to calculate how to have a clear and detailed exploration and investment plan model. Then, it is possible to consult aviation experts and investors to build airport clusters early. Localities with airports can sit down to consult and discuss carefully because airports have different markets and complementary markets.

In addition, the socio-economic development plan for the development of the local airport is also an important issue. There are two problems to be solved; the first is the problem of local needs, and the second is the overall problem of national planning.

In the future, how should investment in airports be implemented in localities, Sir?

In addition to local efforts, the country also needs to have favourable policies for early exploitation and development opportunities of small airports when taking advantage of small and electric-powered aircraft in the future.

Currently, many "pearls" have not had the full opportunity to shine on the tourist map of Vietnam, stretching from the top of the country to the southernmost tip of the country. On the other hand, many famous domestic and foreign travel advice sites and many famous experience people have named a series of attractive destinations, many scenic spots, historical places located in remote areas, not yet connected to the highway, airway and railway networks.

Accordingly, it can be mentioned here that Phu Quoc Pearl Island, within the past decade, since the international airport here officially came into operation, from the image of a poor island district in 2010, now it has become a bustling, modern and developed island city. Therefore, this image suggests a lot about aviation's role in this locality's socio-economic development.

Or like the story of Ha Giang, according to experts, in the context that investing in highways connecting this locality with the capital had a huge cost; the construction period lasts decades, and investment immediately in an airport of reasonable size with the cost of only a few dozen kilometres of highway can bring a huge boost in attracting investment, awakening potentials and advantages of tourism.

Similar stories will not be difficult to find in the northern mountainous areas, the Central Highlands or the Mekong Delta.

Thank Sir!

Dr. Nguyen Dinh Cung, former Director of the Central Institute of Economic Management:

Building an airport is like a highlight of the ecosystem. Therefore, the legitimate need to build airports of localities should be supported and be realized through incentive tools and institutions that can be used by localities, and investors can feel the attraction of investment opportunities, are facilitated to participate, give enough room for the localities to be flexible, take advantage of the mechanism for economic development.

Inappropriate planning will become a bottleneck for socio-economic development. Therefore, there should be an open plan. Accordingly, do not locate 28 airports by 2030 or 31 airports by 2050, we should have "hardware" and "software" not to waste time adjusting and creating a "asking and giving" mechanism. It should not set the construction sequence according to the year, should be flexible so that the localities can decide for themselves under their needs. It is necessary to decentralize 2/3 of the airports for the local implementation.

Mr. Hong Sun, Vice President of Korean Business Association in Vietnam:

Airports are very important for socio-economic development in localities. Airport development should be carefully considered factors such as market demand, distance among localities, population, financial capacity, operating costs…

Vietnam plans to increase the number of airports to 28 by 2030 and 31 by 2050. To achieve this goal, attracting private investment by means of a public-private partnership (PPP) is one effective solution for Vietnam in order to reduce pressure on the state budget, increase efficiency and feasibility.

The choice of a domestic or international airport development model is also an important factor when we consider long-term development. Lessons from other countries have also demonstrated the importance of this. In Korea, many localities have airports and this greatly supports local development.

Small airport development will be really necessary and useful if small airports can support larger airports. In many countries, airports are developed as small cities, meeting the needs of passengers, thereby helping to increase purchasing power and promote tourism development.

In addition, airport development should also pay attention to the development of connection infrastructure such as roads, helping to connect the airport with other infrastructure.

Mr. Kenneth Atkinson, Chairman of British Business Association in Vietnam:

To develop the airport, connectivity infrastructure plays a very important role, including road, rail and sea connections. In the past 20 years, we have witnessed many good examples of socio-economic development, transportation connections to provinces and cities have been significantly improved.

The importance of the airport really depends on the development strategy of the province or city. For example, Ha Giang province in the northern mountainous region wants to develop tourism in order to take advantage of the natural beauty. Ha Giang is about 300 km from Hanoi and it takes several hours to travel by road, making it difficult to attract international tourists. Therefore, airport development is necessary to make it more convenient for tourists. The increase in tourists will lead to the development of hotels and other supporting infrastructure such as shops and restaurants.

The main problem is the investment capital to build the airport. Factors being considered when building an airport are the estimate of initial investment costs, capital due to construction delays, management… Next, it is necessary to have a plan on how to maximize revenue from commercial areas in and around the airport. International consulting firms can help with this.

The model commonly used and has been applied at some airports such as Cam Ranh (Vietnam), Phnom Penh, Siem Riep (Cambodia) is the PPP model.

By Xuan Thao/ Binh Minh