Hanoi (VNA) -The Ministry of Transport (MoT) has proposed to the Prime Minister fourdifferent plans to operate airfields in the future, aiming to narrow a yawninggap between the Airports Corporation of Vietnam (ACV)’s revenue and expenditures.

The proposal is part of the ministry’s report on the operations and plans formanaging and airfields and maximising their economic potential. Balancing theACV budget is particularly important as the MoT hopes to undertake significantupgrades to the airfields in the next five years.

In the period from 2012-16, the total revenue from the taking off and landingactivities of ACV was 5.97 trillion VND (262.19 million USD), while theinvestment cost for this period was over 7.5 trillion VND. According to the ministry,the revenue only covers operating expenses, maintenance, repair and a fractionof investment and upgrading costs.

The ministry said that ACV had planned for annual revenue from 2017 to 2021 tofall between 1.82 trillion VND to 2.56 trillion VND. However, the total cost ofnecessary investments during that period was estimated at about 17.15 trillionVND, of which 11.07 trillion VND would be for repairs. The revenue fromairfield operations could meet operating costs, regular repairs and a smallportion of the repair costs.

The ACV said that the revenue shortfall meant the airports and any plans toupgrade them must be managed carefully. The ministry hopes its four plans willhelp the industry balance its budget and improve services. The Prime Minister willconsider them and select one of the four or propose an alternative idea.

Firstly, the State could lease ACV its assets to exploit and operate theairfield. Second, it could increase the charter capital of ACV by contributingcapital of the airfield assets. Third, ACV could handle management,exploitation, investment and repair of the airfield through a 30-yearmanagement contract. Fourth, the State could hire ACV to manage and exploitassets, generate revenue and profit for the State in the form of public-privatepartnership on the basis of Operation and Maintenance (O&M)contract.

Although four options are proposed, the MoT suggested choosing the thirdoption: the State would assign ACV to manage and upgrade the airports through a30-year management contract. Under this plan, the ministry will play the roleof inspecting and supervising the management and approving investment plans,while ACV would be active in planning and implementing business activities suchas investment and maintenance. ACV must report on the annual business resultsto MoT.

In case the revenue exceeds total operating costs and investments, theremainder will be paid to the State budget.-VNA