The domestic aviation industry needs significant capital to invest ininfrastructure during 2015-20 to improve airline services, head of theCivil Aviation Authority of Vietnam (CAAV) Lai Xuan Thanh said.
Speakingat a seminar with the theme "Socialising management and exploitation ofairports in Vietnam," which was held in Hanoi on April 8, Thanh saidinvestment capital from the State and businesses have met part of thedemand for the country's aviation development plan, making it necessaryto mobilise capital from other sources in society.
The seminarwas held after airline firms including VietJet Air, the national flagcarrier Vietnam Airlines and a number of businesses requested the rightsfor operating several airport buildings, such as the T1 terminal of NoiBai, Phu Quoc and Da Nang airports. The seminar was expected to clarifythe plan to sell the airports' operational rights to the public as wellas enterprises who want to operate the airports in the future.
Thanhsaid the country's aviation transport market achieved high growth at anaverage rate of 14.5 percent in the 2001-14 period. According to theInternational Aviation Transport Association, Vietnam's airline marketranks third in terms of growth rate.
Vietnam has four airlinefirms: Vietnam Airlines, Jetstar Pacific Airlines, VietJet Air andVietnam Air Services Company. They have exploited 111 planes on 56international airways and 46 domestic ones. Meanwhile, the country'sairports have been exploited by 51 international airline firms.
As planned, the firms' fleets will have 205 planes by 2020.
Vietnam'sairport system is under the management of the Airport Corporation ofVietnam and uses the State's wholly owned capital. The aviation sectorbegan investing in infrastructure for the airports in 2001 withmobilised capital of 125.37 trillion VND (5.88 billion USD), of which 5percent comes from the State budget, 77 percent from businesses and 14percent from the official development assistance (ODA) fund.
It'spredicted that the sector will need 230.21 trillion VND (10.8 billionUSD) for aviation infrastructure in the 2015-20 period, of which 13.3percent, 10.1 percent and more than 26 percent will come from the Statebudget, businesses and ODA, respectively. The remaining 48.8 percent isexpected to come from shareholders.
Deputy Director of theCentral Institute for Economic Management Vo Tri Thanh said the issue ofallowing private businesses to take part in the operations managementof airports and sea ports was a new subject in Vietnam but not aroundthe world. Operations managed by private businesses were usually moreeffective than those under the State's management because the formerscenario avoids conflicts of interest.
Deputy General Director ofVietJet Air Nguyen Duc Tam proposed assigning priority for operationalrights to the aviation sector's firms and businesses.
He said hisfirm is willing to cooperate and share services with other airlinefirms and aviation businesses. Forming alliances is a strong trend onthe international aviation market.
"It is necessary to socialisethe management and operation of airports following a modern model withadvanced technology based on the principle of explicitness and equalitybetween private and State-owned enterprises," Tam said.
DeputyChairman of the National Financial Supervisory Commission Truong VanPhuoc said the sale of operational rights of airports and terminals wasnecessary.
"However, what will happen if the business receivingthe operational rights goes bankrupt? Thus, it is necessary to set somecriteria for the investors. Another question is who will be qualified toreceive these operational rights?" Phuoc said.
The DeputyChairman said that the selling of operational rights will ensure harmonybetween the interests of the State and businesses. There is noguarantee that aviation businesses will operate airports better thanbusinesses operating outside the sector.
Speaking at theconclusion of the seminar, Deputy Minister of Transport Pham Quy Tieusaid the ministry is preparing a legal foundation to carry out the saleof operational rights of airports, including the T1 terminal and Hall Eof Noi Bai International Airport and Phu Quoc Airport.
After completing this legal foundation, the ministry will issue detailed processes for every project, Tieu said.
Headded that the ministry will coordinate with the Ministry of Finance toassess the cost of each project. If there are two or three investors,the ministries will hold an auction.
To make the plan a realitywill take a lot of work. One of the most important issues is checking tosee if the sector can create opportunities for businesses to take partin the airports' operations management.
According to the CAAV,the sale of operational rights will need to ensure six principles:national defence and security should not be affected; businesses thathave obtained the operational rights should not be allowed to transferthem to other businesses; wholesome competition should be ensured andabuse of a monopoly should be prevented; civil aviation operationsshould be systematically maintained following planning; transparencyshould be ensured and the interests of the State should be protected;and the legitimate rights and interests of the workers should beprotected.-VNA
Speakingat a seminar with the theme "Socialising management and exploitation ofairports in Vietnam," which was held in Hanoi on April 8, Thanh saidinvestment capital from the State and businesses have met part of thedemand for the country's aviation development plan, making it necessaryto mobilise capital from other sources in society.
The seminarwas held after airline firms including VietJet Air, the national flagcarrier Vietnam Airlines and a number of businesses requested the rightsfor operating several airport buildings, such as the T1 terminal of NoiBai, Phu Quoc and Da Nang airports. The seminar was expected to clarifythe plan to sell the airports' operational rights to the public as wellas enterprises who want to operate the airports in the future.
Thanhsaid the country's aviation transport market achieved high growth at anaverage rate of 14.5 percent in the 2001-14 period. According to theInternational Aviation Transport Association, Vietnam's airline marketranks third in terms of growth rate.
Vietnam has four airlinefirms: Vietnam Airlines, Jetstar Pacific Airlines, VietJet Air andVietnam Air Services Company. They have exploited 111 planes on 56international airways and 46 domestic ones. Meanwhile, the country'sairports have been exploited by 51 international airline firms.
As planned, the firms' fleets will have 205 planes by 2020.
Vietnam'sairport system is under the management of the Airport Corporation ofVietnam and uses the State's wholly owned capital. The aviation sectorbegan investing in infrastructure for the airports in 2001 withmobilised capital of 125.37 trillion VND (5.88 billion USD), of which 5percent comes from the State budget, 77 percent from businesses and 14percent from the official development assistance (ODA) fund.
It'spredicted that the sector will need 230.21 trillion VND (10.8 billionUSD) for aviation infrastructure in the 2015-20 period, of which 13.3percent, 10.1 percent and more than 26 percent will come from the Statebudget, businesses and ODA, respectively. The remaining 48.8 percent isexpected to come from shareholders.
Deputy Director of theCentral Institute for Economic Management Vo Tri Thanh said the issue ofallowing private businesses to take part in the operations managementof airports and sea ports was a new subject in Vietnam but not aroundthe world. Operations managed by private businesses were usually moreeffective than those under the State's management because the formerscenario avoids conflicts of interest.
Deputy General Director ofVietJet Air Nguyen Duc Tam proposed assigning priority for operationalrights to the aviation sector's firms and businesses.
He said hisfirm is willing to cooperate and share services with other airlinefirms and aviation businesses. Forming alliances is a strong trend onthe international aviation market.
"It is necessary to socialisethe management and operation of airports following a modern model withadvanced technology based on the principle of explicitness and equalitybetween private and State-owned enterprises," Tam said.
DeputyChairman of the National Financial Supervisory Commission Truong VanPhuoc said the sale of operational rights of airports and terminals wasnecessary.
"However, what will happen if the business receivingthe operational rights goes bankrupt? Thus, it is necessary to set somecriteria for the investors. Another question is who will be qualified toreceive these operational rights?" Phuoc said.
The DeputyChairman said that the selling of operational rights will ensure harmonybetween the interests of the State and businesses. There is noguarantee that aviation businesses will operate airports better thanbusinesses operating outside the sector.
Speaking at theconclusion of the seminar, Deputy Minister of Transport Pham Quy Tieusaid the ministry is preparing a legal foundation to carry out the saleof operational rights of airports, including the T1 terminal and Hall Eof Noi Bai International Airport and Phu Quoc Airport.
After completing this legal foundation, the ministry will issue detailed processes for every project, Tieu said.
Headded that the ministry will coordinate with the Ministry of Finance toassess the cost of each project. If there are two or three investors,the ministries will hold an auction.
To make the plan a realitywill take a lot of work. One of the most important issues is checking tosee if the sector can create opportunities for businesses to take partin the airports' operations management.
According to the CAAV,the sale of operational rights will need to ensure six principles:national defence and security should not be affected; businesses thathave obtained the operational rights should not be allowed to transferthem to other businesses; wholesome competition should be ensured andabuse of a monopoly should be prevented; civil aviation operationsshould be systematically maintained following planning; transparencyshould be ensured and the interests of the State should be protected;and the legitimate rights and interests of the workers should beprotected.-VNA
