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Taking responsibility

Released at: 07:05, 03/02/2018

Taking responsibility

Photo: Viet Tuan

The Sun Group has managed to quickly build Van Don International Airport and will take charge of its operations after the mid-year opening.

by Ngoc Lan & Quynh Nguyen

The Sun Group’s investment in Van Don International Airport in northern Quang Ninh province is expected to be completed in mid-2018, with the VND7.5 trillion ($333.3 million) airport being the first in Vietnam to operate under the build-operate-transfer (BOT) form. 

Located in Doan Ket commune in Van Don district, the airport covers 288 ha and has a designed capacity of 5 million passengers a year, in which the first phase is 2.5 million passengers. It is expected to welcome about 500,000 passengers in its first year.

Sun Group in charge

The construction of Van Don International Airport began in 2015 and 90 per cent of its runways have now been completed. Built under 4E International Airport standards, Van Don will be able to cater to large aircraft such as A380s and B777s, making it the equal of other major international airports in Vietnam such as Tan Son Nhat in Ho Chi Minh City, Noi Bai in Hanoi, and Da Nang and Can Tho. 

Joinus Vietnam, Posco E&C, the CCC Corporation from Canada, and the Korea Airport Corporation were originally interested in building Van Don, but at the last minute only the Sun Group was willing to proceed. “The Sun Group is investing in the airport because we recognize that infrastructure development must be one step ahead of overall development in the region,” Mr. Dang Minh Truong, Deputy Chairman and General Director of the Sun Group, told VET. “As investment from the local budget is limited, Quang Ninh sought its own path in order to have the infrastructure needed for its development.”

Upon completion, Van Don International Airport will be operated directly by the Sun Group rather than Airports Corporation of Vietnam (ACV). The Sun Group established the Van Don Investment and Development Joint Stock Company last April to operate the airport. 

The Group is not the first private investor to be involved in aviation infrastructure. Previously, the Da Nang International Terminal Investment and Operations Joint Stock Company invested in Da Nang International Airport and the Cam Ranh International Terminal Joint Stock Company invested in an international passenger terminal at Cam Ranh International Airport in south-central Khanh Hoa province, with a capacity of 4-8 million passengers a year. But the Sun Group is the first investor to invest in and exploit both terminals and airport infrastructure. Mr. Truong said the investment is not aimed at profit-making, and is only part of the Group’s business strategy. Many experts, however, said the Sun Group will be able to earn revenue from carriers through landing and take-off, runway, and aircraft security services. Other services bringing in revenue include check-in counters, baggage carousel rentals, and commercial services. 

According to Decision No. 2345 dated August 8, 2017 from the Ministry of Transport on price levels and price brackets for certain specialized aviation services at Vietnam’s airports, charges for landings and take-offs of B777 aircraft were set at VND5.8 million ($257) per time from October 1, 2017. 

In addition to its investment in Van Don, the Sun Group has also invested in a number of real estate, entertainment, ecological tourism, and casino projects in Quang Ninh, such as the Sun World Halong Complex, Sun Premier Village Halong Bay, and a recently-announced resort complex at Van Don. Van Don will become a distinct economic zone, so owning Van Don International Airport will bring long-term benefits and help the Sun Group promote its business.

Moreover, the number of tourists to Quang Ninh in 2017 is expected to have reached 9.87 million, up 18 per cent against 2016, according to the Quang Ninh Department of Tourism. International arrivals will reach 4.28 million, up 23 per cent. This augers well for Sun Group’s investment in Van Don.

Government role

Van Don is special compared to the 21 other airports in Vietnam, in which the government has provided the investment. Aviation is a specialized field, however, so the cost of specialized aviation services at Van Don will still be managed by the State, under regulations.

In early December, the Civil Aviation Administration of Vietnam (CAAV) submitted a proposal to the Ministry of Transport on setting up a representative office of the Northern Aviation Authority at Van Don. The Authority performs the function of State management in aviation, ensuring the observance of legal provisions at airports. Under the proposal, the Authority would have 38 personnel, tasked with ensuring the strict observance of laws by organizations and individuals operating at airports and ensuring civil aviation activities take place smoothly and are in compliance with relevant legal provisions.

In order to deploy aviation security at Van Don, CAAV proposed two options to the government, according to Deputy Director Mr. Vo Huy Cuong. Firstly, it proposed the Van Don Investment and Development Joint Stock Company provide aviation security. Secondly, it proposed the government designate ACV as being responsible for aviation security, with it directing relevant agencies and units to prepare security personnel and aviation equipment. It would also organize training for security staff in equipment and procedures, to ensure preparedness when Van Don is put into operation. Meanwhile, the Sun Group would be responsible for the procurement and installation of X-ray scanners, explosive detectors, magnetic gates, aviation security surveillance cameras, and security infrastructure.

The cost of specialized aviation services would still be set by the Ministry of Transport under provisions in the Civil Aviation Law, including landings and take-offs and passenger, security, and runway services.

At a meeting with the Ministry of Transport, Mr. Tran Dinh Thien, Director of the Vietnam Institute of Economics, remarked that Van Don is not comparable to Noi Bai and Tan Son Nhat in scale but has nonetheless been built quickly by private investment. “Meanwhile, discussions over renovations at Tan Son Nhat and the construction of Long Thanh International Airport in southern Dong Nai province have taken several times longer than the construction of Van Don,” he said. “This is the lesson of private investment.”

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