British firms want to join Tan Son Nhat expansion project

Amid growing interest among foreign investors in the aviation market, Vietnam Airports Corporation and Vietnam Airlines – the two most influential corporations in the aviation sector – will continue to divest large state stakes to fund future development plans.   Deputy Prime Minister Vuong Dinh Hue signed Decision No.1232/QD-TTg on August 17, approving the state stake divestment for state-owned enterprises (SOEs) and corporations in 2017-2020, with Vietnam Airports Corporation (ACV) and the flag carrier Vietnam Airlines (VNA) both named among the many in line for divestment. ACV will have to sell off 20 per cent of its state stake in 2018 and 10.4 per cent in 2019, while VNA will have to sell 35.16 per cent in 2019, thus cutting state ownership in the firms to 65 per cent and 51 per cent, respectively. “The divestment will be a good chance for foreign investors to join the local aviation market. Many foreign investors are interested in acquiring stake in the firms,” Deputy Transport Minister Le Dinh Tho told VIR. According to Thomas Treutler, partner and managing director of Tilleke & Gibbins Consultants Limited, foreign investors will certainly be interested in investing in well-established airlines. Travel to Vietnam for business and tourism will continue to rise, as will outbound travel for Vietnamese businesses reaching out internationally to investors and Vietnamese citizens travelling internationally for tourism. “Domestic travel within the country is also booming, with…... [read more]

VietNamNet Bridge – Rail tracks located in the inner city have caused problems for Ha Noi’s traffic, however, this will be addressed in the future when city planning is completed. Ha Noi Railway Station.— VNA/VNS Photo Transport Deputy Minister Nguyen Ngoc Dong made this comment referring to the proposal to move Ha Noi railway station out of the inner city. “Traffic congestion (caused by the railways) is indeed taking place, at present. In the future, the rail tracks will not cause traffic jams. The Cat Linh-Ha Dong rail route will run on an elevated rail track or the Nhon-Ha Noi rail route will be underground. We will address the problem,” he said, indicating he was not in favour of the proposal. He said the Ha Noi transport development, including Ha Noi railway planning, has been scheduled. According to the Viet Nam Railway Corporation, there are 5,564 crossings between rail tracks and roads nationwide. Ha Noi has the highest number of crossings. There are also a large number of national rail tracks running parallel with Ha Noi’s main roads, such as Le Duan and Giai Phong, and crossings between rail tracks and the city’s main transport routes, including densely-populated intersections such as Kham Thien, Dai Co Viet-Dao Duy Anh, Truong Chinh and Linh Dam peninsula. As a result, trains are banned from entering and moving out of the inner city during the rush hour, which is when there are maximum passengers. This has limited profits of the railway sector. Vu Anh…... [read more]

Vietnam Waterway Construction Corporation (Vinawaco) is currently in hot water due to continuous revelations of enormous losses and debts from before its equitisation. Vinawaco has just sent two urgent dispatches to the Ministry of Transport (MoT) and the Hoan Kiem District (Hanoi) Division of Civil Judgement Enforcement requesting to speed up the valuation of state capital at the moment of its equitisation (May 30, 2014) and delay the forced debt collection for two judgements pronounced by the Haiphong People’s Court in 2016 and the Ho Chi Minh City Peoples’s Court in 2004. “These two requests are actually linked together, since only when MoT determines the amount of state capital at the time of equitisation will we have a basis to pay the company’s liabilities in accordance with the law,” said Ngo Van Tuan, chairman of the board of Vinawaco. In particular, regarding the VND560 million ($24,634) debt to Minh Duong Company, according to the judgement of the Haiphong People’s Court in 2016 (Case No.18/KDTM-PT), Tuan said Vinawaco is prepared to pay the amount to a temporary holding account appointed by the court, but asked to wait until the company completes the second valuation of state capital and finishes the handover from state-owned enterprise to joint stock company. Meanwhile, regarding the VND7 billion ($307,930) debt pronounced by the Ho Cho Minh City People’s Court in 2004 (Case No.284/CNTT-TT), Vinawaco argued that the company is not accountable to pay since this debt was never mentioned when MoT…... [read more]

The government has just announced the list of 406 state-owned enterprises (SOEs) to be divested in the 2017-2020 period, drawing heavy attention from investors. The list includes many big names, such as Vietnam Engine and Agricultural Machinery Corporation (VEAM), Airports Corporation of Vietnam (ACV), Vietnam Airlines, PVOil, and PVTex, promising interesting market prospects ahead. Big players take to the field According to the yearly SOE divestment plan approved by the prime minister, 406 SOEs will be divested in the next four years (2017-2020), with 135 SOEs scheduled for 2017 alone. The announcement of this list will speed up the divestment process in SOEs that do not require government control, allowing the state apparatus to focus on the more crucial aspects of the economy as well as to secure the appropriate revenues for the mid-term 2016-2020 investment plan. 406 SOEs will be divested in the next four years, with 135 in 2017 alone According to Dang Quyet Tien, deputy director of the Department of Corporate Finance under the Ministry of Finance (MoF), this announcement is an important step to attract the attention of potential investors. Instead of waiting for the chance drop of information, investors can now get a clear overall picture of all SOEs ready for divestment and take their pick, significantly increasing investment efficiency. “I believe this is a necessary step to increase the speed and effectiveness of corporate management during the…... [read more]

A corner of Noi Bai International Airport in Ha Noi. — VNS Photo Thanh Hai The Ministry of Transport will increase service charges at airports to compensate for investment costs of the airport system and raise service quality. According to a regulation issued last week, the take-off and landing charge will increase by 5 per cent from October 1, 2017 to June 30, 2018, on average. It will fluctuate based on rush hours, normal hours and off-peak hours. Specifically, the charge will be raised by 15 per cent during rush hours and reduced by 15 per cent during off-peak hours. During normal hours, the take-off and landing charges will be VND698,000 (US$30.6) each time for ATR70 aircraft, more than VND1.5 million for A320 and A321, and more than VND5.8 million for A350, B787, B777 and A330. The charge will be up by 10 per cent as of July 1, 2018. Insiders said flight airfares will certainly increase following the transport ministry’s regulation, which was issued last week, because input costs are up. A representative of budget airline Vietjet Air told Vietnam News Agency that the firm had yet to determine a method to raise airfares. However, the fare would go up when charges increased. “We encourage passengers to buy tickets online directly, not through unofficial agents, to avoid buying tickets at higher prices,” representatives said. The Ministry of Transport will increase service charges at airports from October 1,…... [read more]

The Ministry of Transport will increase service charges at airports to compensate for investment costs of the airport system and raise service quality. A corner of Noi Bai International Airport in Ha Noi. - VNS Photo Thanh Hai According to a regulation issued last week, the take-off and landing charge will increase by 5 per cent from October 1, 2017 to June 30, 2018, on average. It will fluctuate based on rush hours, normal hours and off-peak hours. Specifically, the charge will be raised by 15 per cent during rush hours and reduced by 15 per cent during off-peak hours. During normal hours, the take-off and landing charges will be VND698,000 (US$30.6) each time for ATR70 aircraft, more than VND1.5 million for A320 and A321, and more than VND5.8 million for A350, B787, B777 and A330. The charge will be up by 10 per cent as of July 1, 2018. Insiders said flight airfares will certainly increase following the transport ministry’s regulation, which was issued last week, because input costs are up. A representative of budget airline Vietjet Air told Vietnam News Agency that the firm had yet to determine a method to raise airfares. However, the fare would go up when charges increased. “We encourage passengers to buy tickets online directly, not through unofficial agents, to avoid buying tickets at higher prices,” representatives said. Another representative from budget airline Jetstar…... [read more]

In a country where corruption pervades public infrastructure projects, the recent naming and shaming of the transport ministry for handpicking investors for major projects has epitomized the uphill battle facing Vietnam’s anti-graft movement: the surging influence interest groups have on the policymaking process. Last Friday, the Government Inspectorate blamed the Ministry of Transport for "operational problems" at seven major projects in Hanoi and nearby provinces. The inspectorate said in a report that the transport ministry had handpicked the investors instead of putting the projects out to tender. In response, the ministry claimed it had been forced to fast-track the process and select the only investors available that were interested in running the projects. The report comes at a time when drivers in southern Vietnam are digging in against a new toll station in the Mekong Delta province of Tien Giang, saying they are being forced to pay extra fees for a highway they have already forked out for. The dispute has shown no sign of letting up, with the transport ministry and the investor both rejecting calls to relocate the toll station. Vietnamese media has been unusually critical of the tollgate. In a scathing editorial on Sunday, Thanh Nien (Young People) newspaper said it is time the ministry overhauled the build-operate-transfer model to avoid hitting the public where it hurts most - their pockets. “It is essential that we follow through with state policies, but that doesn’t mean that the ministry cannot learn from the mistakes of previous administrations,”…... [read more]

The statement was made by Mr. Nguyen Danh Huy, head of Public Private Partnership Projects Management Board under the Ministry of Transport, at a press conference on problems relating to the BOT station. The toll reduction affects the financial plan of the project comprising capital recovery time and bank interest. Therefore, toll collection period is estimated to extend to 12-14 years, affirmed him. On Wednesday the Ministry of Transport, the People’s Committee of Tien Giang province and investors met and agreed to cut 30 percent tolls for all types of vehicles through the station. However, residents have disagreed with that solution saying that the tollbooth’s position should be changed to ensure fairness for residents. In response, deputy minister Nguyen Ngoc Dong said that the tollbooth position had been chosen in the scope of the project with the agreement of local authorities, relevant ministries and agencies to meet capital recovery plan for investors. So it was unnecessary to remove, he said. The target of BOT investment method is to reduce pressure on the state budget. Therefore the state cannot spend on buying the tollbooth amid the current scenario, added him. Replying to queries that why the upgrading of National Highway 1A did not use the road maintenance fee fund, Mr. Dong said that the fund is just spent on simple repairs of roads not upgrading. The Investment Law and Decree 108 permit mobilization of BOT funds to upgrade road face, bridges and drainage systems. Deputy Minister of Transport Nguyen Ngoc…... [read more]

The statement was made by Mr. Nguyen Danh Huy, head of Public Private Partnership Projects Management Board under the Ministry of Transport, at a press conference on problems relating to the BOT station. The toll reduction affects the financial plan of the project comprising capital recovery time and bank interest. Therefore, toll collection period is estimated to extend to 12-14 years, affirmed him. On Wednesday the Ministry of Transport, the People’s Committee of Tien Giang province and investors met and agreed to cut 30 percent tolls for all types of vehicles through the station. However, residents have disagreed with that solution saying that the tollbooth’s position should be changed to ensure fairness for residents. In response, deputy minister Nguyen Ngoc Dong said that the tollbooth position had been chosen in the scope of the project with the agreement of local authorities, relevant ministries and agencies to meet capital recovery plan for investors. So it was unnecessary to remove, he said. The target of BOT investment method is to reduce pressure on the state budget. Therefore the state cannot spend on buying the tollbooth amid the current scenario, added him. Replying to queries that why the upgrading of National Highway 1A did not use the road maintenance fee fund, Mr. Dong said that the fund is just spent on simple repairs of roads not upgrading. The Investment Law and Decree 108 permit mobilization of BOT funds to upgrade road face, bridges and drainage systems. Deputy Minister of Transport Nguyen Ngoc…... [read more]

He made the requirement in Hanoi while presiding over a meeting of the State Steering Committee on Key Works of Transport Industry to give measures to speed up implementation progress. Mr. Dung urged to complete investment projects of the expressway and other works in the Mekong Delta, report to the PM to submit to the 14th National Assembly at its 4th session. The Ministry of Transport should require investors, management boards of projects and investors to speed up the progress of key projects such as Tan Vu-Lach Huyen auto road, Da Nang-Quang Ngai expressway, Hoa Lac-Hoa Binh expressway, Ca Mountain Pass tunnel, 17 projects using funds left from Highway 14 expanding project, Ho Chi Minh Highway in the Central Highlands, Cao Lanh bridge, Vam Cong bridge and approach roads. In addition, the ministry should speed up investment preparation progress for Long Thanh International Airport. According to reports at the conference, the list of the transport industry’s key works comprise 37 projects with the total investment capital of VND1,090 trillion (US$47.96 billion). They include 23 road projects worth VND489,034 billion with 13 projects having been done and 10 under construction. Seven railway works worth VND195,444 billion are being implemented with Ha Long-Cai Lan route having been built at VND1,511 billion and opened to traffic. Marine and internal waterway field has four projects with the investment capital of VND49,422 billion. Of these, three have been completed and opened for service. Aviation has three projects with the total funds of VND356 trillion, of…... [read more]




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