ACV asks to borrow US dollars for Long Thanh airport project

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

ACV 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 the ACV’s leader, phase one of the investment project, estimated to cost about 2.5 billion USD, 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 Vietnam, it affected the 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, the ACV proposed the Prime Minister to allow it to accumulate money production and business activities for investment.

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

The ACV's representative said: “The lending interest rate in USD is always significantly lower than that in VND, while the ACV has direct and indirect USD revenue 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 the ACV as a state-owned enterprise.

Also to ensure the progress of the Long Thanh Airport project in the context of the pandemic, the 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, the 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 the Long Thanh International Airport’s passenger terminal early next year.

As the Long Thanh International Airport is one of the breakthrough projects of the national transport sector in the 2021-2025 period, Deputy Minister of Transport 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 the ACV, the 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 336.63 trillion VND (14.5 billion USD), 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./.