Foreign partner pledges $2bn loan for Long Thanh airport project: official Airplanes sit on the tarmac at Tan Son Nhat International Airport in Ho Chi Minh City, Vietnam. Tuoi Tre A French company has been committed to giving a loan of US$2 billion for Vietnam to fund a costly mega airport-building project in the latter’s southern region, a local transport official said Friday. ADPi, a French company specialized in airport architecture and engineering, has committed US$2 billion in loans to fund the construction of Long Thanh International Airport in Dong Nai Province, according to Pham Quy Tieu, Vietnamese Deputy Minister of Transport. ADPi is a fully owned subsidiary of the Aéroports de Paris Group. Tieu revealed the information at an online talk hosted in Hanoi, which discussed the opportunities and challenges of the airport-building project, on Friday. The Deputy Minister elaborated that the government of Japan has been also committed to granting Vietnam a loan for the project but the value of the loan remains unknown.    A report on Friday quoted Tieu as saying that the premiers of Japan and Vietnam have reached an agreement on giving an Official Development Assistance (ODA) loan of US$2 billion for the former to build the Long Thanh International Airport. The US$2 billion loan commitment was made between Japanese Prime Minister Shinzo Abe and his Vietnamese counterpart Nguyen Tan Dung in late 2013, Tieu was quoted as saying. “Japan has shown an interest in the project and pledged to lend us $2 billion,” Tieu said. He added that however, that the two sides must have “many talks” before the loan can be disbursed. However, Hiroyuki Hayashi, First Secretary of the Embassy of Japan to Vietnam, denied the report. “The Japanese government has not decided the investment for the Long Thanh Airport yet,” Hiroyuki told Tuoi Tre (Youth) Newspaper via email today. “During the Japan-Vietnam Summit Meeting on December 15, 2013, Japanese Prime Minister Shinzo Abe just stated that Japan would advance cooperation with Vietnam in specific projects such as the Long Thanh International Airport,” Hiroyuki explained. The airport, to be built in the eponymous district of Dong Nai Province, around 30km east of Ho Chi Minh City, is projected to cost $7.8 billion in its first phase, ending by 2025, and a hefty $18 billion for all three phases. Members of the public and economic experts have been wondering why the transport ministry could put forward such a pricey project during these hard times. The transport ministry has said in the project’s investment report that ODA loans and government bonds will cover 50 percent of the investment required for the first phase. “I must say even in the hard economic times, we will still implement projects we deem effective and necessary,” Tieu said. The deputy minister added that financing the project with ODA loans and government bonds is inevitable as “build-operate-transfer (BOT) and public-private partnership (PPP) investment in civil airport infrastructure is unattractive to investors.” The government thus must be in charge of building the airport’s runways, taxiways, and aprons, he said. Around $2.07 billion of the $7.8 billion investment required for the project’s first phase will be allocated for infrastructure development, according to the deputy minister. “It will cost more than $1 billion for the airport infrastructure, and nearly $1 billion for site clearance,” he elaborated. Deputy Minister Tieu also said the Long Thanh airport project is proposed on the basis of the economic effectiveness of the aviation sector over the past time. “The Asia Pacific region will remain the ‘hottest’ growing aviation market in the next ten years, which is forecast to expand by up to six percent a year,” he said, citing the International Civil Aviation Organization. “So, the Long Thanh airport will bring in economic effectiveness in the future.” He added that the first phase of the project will be further divided into two sub-phases, 1a and 1b, according to what he said is “a very detailed calculation.” “The 1a sub-phase alone will need $5.6 billion,” he said. The Long Thanh airport project has triggered intense debate among aviation and economic experts and transport officials over the last couple of weeks. Advocates of the plan defend the necessity to build the new airport as the country’s largest terminal, Tan Son Nhat airport in Ho Chi Minh City, is expected to become overloaded by 2017. Opponents meanwhile say Tan Son Nhat should be expanded and it is a huge financial burden for the state coffers to fund the construction of Long Thanh. TUOI TRE NEWS