Vietnam’s airports to grow by seven by 2030 – private capital still greatly needed

CAPA - Centre for Aviation has often referred to the failed attempt by Groupe ADP to take a 20% stake in Airports Corporation of Vietnam (ACV) nine years ago, and how it queered the pitch for similar organisations to invest in airports in Vietnam and other parts of Southeast Asia - a region which has witnessed other partial privatisation failures involving investors and operators from outside it.

But the times they are changing; at least in the sense that investors have been found, mainly from within Vietnam so far, to participate in PPP schemes to build seven new airports by 2030 as the government becomes more ambitious to benefit from a surge in tourism, and to distribute it as far as possible throughout the country, rather than in selected hotspots.

Those actual and prospective PPP deals have arisen despite the significant challenges that exist to private investment, and the future path must be, inter alia, for Vietnam to relax foreign ownership restrictions and improve returns for investors.

More private capital is coming in than might have been anticipated a decade ago, but it is non-state investment in the enormous USD16 billion greenfield Long Thanh airport near Ho Chi Minh City that would seal the deal for the country.

As things stand, ACV acts as the primary investor and operator for this mega-project, limiting opportunities for private stakeholders, some of whom would relish the prospect of getting a piece of the action.