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Long Thanh Airport: Worrying About Capital Because The Cost Is Not Separate

Long Thanh Airport Project

According to the Economic Committee, the separation of costs has not yet resulted in an increase in the total investment for the construction of Long Thanh Airport.

According to the report on the feasibility study of the project of land acquisition, compensation, support and resettlement of Long Thanh Airport, Ministry of Transport said that the project has a total area of land expected to recover about 5,585.14ha. In particular, the area of land recovered for the construction of Long Thanh International Airport is 5,000 ha, and the area of land recovered for the construction of resettlement areas is about 565.14 ha.

Total estimated investment is over $1.1 billion. Funds for the project are mainly from the state budget and mobilized capital from a land use right auction, short-term land rental for areas where public works have not been constructed project submission.

According to the Ministry of Transport, in the period to 2020, the demand for capital for the project is about 10,821.6 billion. Up to now, the new project has allocated $230 million from government bonds.

Long Thanh Airport Project
illustration

With a large scale, affecting many people, the duration of the project lasts in 3 phases, while it is necessary to carry out the site clearance once. Therefore, the Ministry of Transport thinks that it is necessary to concentrate budget capital to allocate project.

Apart from the above specific policy, the Ministry of Transport also proposed not to apply Clause 6, Article 16 of the Public Investment Law in 2014, and assign the Government to formulate specific policies to mobilize capital sources for land recovery … including the work for investors, aviation operators to advance capital to implement.

In addition, Point I, Clause 1, Article 64 of the Land Law of 2013 shall not apply, but shall be entitled to exploit and use short-term land funds which have not yet been constructed and shall not have to pay to the State corresponding to the land use levy or land rent; no land is recovered when the land is not used according to the progress of project implementation.

MOT proposed to consider and balance the additional capital for the project, in the immediate period in 2020 to add $265 million from the central budget reserves in the medium-term planning period 2016 – 2020 for the People’s Committee of Dong Nai province to carry out the land recovery, compensation and resettlement support to meet the progress of the project.

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Examining this project, the National Assembly’s Economic Committee found that the Government’s report and the feasibility study report only clarified the total investment of the project, the progress of allocation of funds not yet made Specific measures to mobilize the deficit for the clearance of the project.

Long Thanh Airport Project
illustration

On the other hand, the report does not separate the costs of Long Thanh International Airport project with other projects, such as the cost of land acquisition, compensation for construction of resettlement site, meaning the separation of these costs leads to an increase in the total investment in the construction of the project. Average household investment ($215,000 / household) is quite high compared to other projects.

However, it is also necessary to recognize the characteristics of site clearance which are often difficult to mobilize outside the budget for implementation. Therefore, it is suggested that the Government continue to review and take measures to raise fit capital.

Where it is impossible to mobilize other sources, the Government shall propose the Government to submit to the National Assembly for consideration and allocation of additional capital from the state budget investment reserve for the period 2016-2020.

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Long Thanh Airport: Worrying About Capital Because The Cost Is Not Separate
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