Aviation Project Partnerships (PPPs) are influenced by supportive government regulations

Private investors continue to show interest in the Public-Private Partnership (PPP) model within Vietnam's domestic aviation sector, despite setbacks. This interest has been evident in the proposed expansion of airports across the country, such as Quang Tri Airport and the potential expansion of Pleiku Airport.

The Airports Corporation of Vietnam (ACV) is responsible for the civil aviation portion of the Pleiku Airport expansion project. However, if the corporation finds it challenging to balance its capital sources, it may need to mobilize social resources.

The proposed amendments to Vietnam's Law on Civil Aviation aim to boost private investment in the sector. These changes focus on promoting more flexible public-private partnerships, streamlining administrative procedures in aircraft registration and leasing approvals, and aligning the legal framework with international conventions and environmental standards.

The amendments allow the government more flexibility in collaborating with the private sector, beyond the previous requirement to form joint-stock companies for cooperation. Simplification of aircraft leasing registration under new decrees reduces administrative burdens and encourages foreign investment in aircraft leasing and finance.

The law integrates international agreements to ensure compliance with global aviation norms, enhancing Vietnam’s competitiveness and safety standards in the sector. Additionally, environmental considerations such as joining the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) by 2026 are incorporated to promote sustainable aviation development.

The northern province of Lao Cai began construction on Sapa Airport under the PPP model in 2022, but an investor has yet to be selected. The Ministry of Construction (MoC) has been tasked with assessing and revising mechanisms to address practical limitations.

In late June, a proposal was made to supplement the medium-term public investment plan for the 2026-2030 period, covering five key transport infrastructure projects, including the proposed $506 million expansion of Pleiku Airport. Pleiku Airport currently accommodates medium-range aircraft and serves domestic routes connecting to major political and cultural centres nationwide, with a capacity of 600,000 passengers per year.

Experts suggest that a consistent and clear legal framework, high political determination, and continuous improvement in the state sector's capacity are key to the success of PPP investment. The MoC is to ensure open and enabling conditions for all economic sectors to develop aviation infrastructure.

Lawyer Tuan Nguyen stated that the domestic market continues to attract private businesses, but further enabling conditions are needed to enhance the appeal and turn proposed projects into successful ventures. Proposed changes include amendments to policies on investment and operations at airports, especially dual-use facilities.

The government aims to raise the total airport capacity to 275.9 million passengers by 2030, but the state budget is expected to cover only 65.8 per cent of the required investment. The state will invest only in areas unattractive to the private sector.

The investor for Phan Thiet Airport terminated the contract in 2023 after years of delayed construction. Despite setbacks, the aviation sector remains a promising area for private investment, with PPP airports generating interest among private sector players.

In conclusion, the amendments to Vietnam's Law on Civil Aviation aim to create a more favourable environment for private investment in the aviation sector by promoting more flexible public-private partnerships, streamlining administrative procedures, and aligning the legal framework with international conventions and environmental standards.

The proposed amendments to Vietnam's Law on Civil Aviation not only focus on promoting more flexible public-private partnerships but also aim to attract private investment in technology, as the simplification of aircraft leasing registration under new decrees reduces administrative burdens and encourages foreign investment in aircraft leasing and finance.
In the sports sector, private investors may take interest in the expansion of airports across Vietnam, especially Pleiku Airport, as the increased capacity could potentially attract more sports events, given that Pleiku Airport serves as a hub for domestic routes connecting to major political and cultural centres nationwide.

Aviation Project Partnerships (PPPs) are influenced by supportive government regulations