Increasing state capital in Sapa Airport Project to 49.16% of total investment

This is one of the important adjustments related to the investment policy of the Sapa Airport Construction Investment Project, Lao Cai province under the PPP method.

This is one of the important adjustments related to the investment policy of the Sapa Airport Construction Investment Project, Lao Cai province under the PPP method.

Perspective of Sapa Airport.

The Prime Minister has just signed Decision No. 1621/QD-TTg adjusting the investment policy of the Sapa Airport Construction Investment Project, Lao Cai Province under the PPP method approved by the Prime Minister in Decision No. 1773/QD-TTg dated October 21, 2021.

Accordingly, the Prime Minister adjusted the expected implementation time, in which Component Project 1 is 5 years. Component Project 2 has a contract term of 47 years (the time for establishing and appraising technical designs, designing construction drawings, and organizing the selection of contractors is 1 year; the time for operation, exploitation, and capital recovery is 43 years and 11 months; the expected construction time for phase 1 is 2 years and 1 month). The construction time for phase 2 is within the operation, exploitation, and capital recovery time of the Project (during the construction of phase 2, the Project is still operating and exploiting, so it does not affect the financial plan of the Project).

The project's phase 1 implementation is expected to start in 2021; phase 2 will start in 2028. The total land use requirement of the project is estimated to be 371 hectares (of which the entire 371 hectares will be cleared in phase 1, to be completed in 2025); the construction area of phase 1 is 295.2 hectares; the construction area of phase 2 is 75.8 hectares.

The Prime Minister also decided to adjust Clause 6, Article 1 of Decision No. 1772. Specifically, the preliminary total investment of the Project is 6,948.845 billion VND, including the total investment of phase 1 is 4,295.289 billion VND (Component Project 1 - Site clearance and resettlement is 555 billion VND; Component Project 2 - Airport construction is 3,740.289 billion VND). The total investment of phase 2 is 2,653.556 billion VND (Component Project 2 - Airport construction).

The total state budget capital participating in the Sapa Airport construction investment project is 3,416 billion VND, an increase of about 686 billion VND compared to the previous approval of the Prime Minister; equivalent to 49.16% of the total investment.

Other contents will remain the same as those approved by the Prime Minister in Decision No. 1773/QD-TTg.

Previously, Lao Cai Provincial People's Committee posted a notice to survey investors' interest in Component Project 2 - Airport construction within 1 month (from November 3, 2021 to December 3, 2021).

As a result, there were 2 interested investors, including Fansipan Sapa Cable Car Tourism Service Company Limited underSun Group Corporation and T&T Group Joint Stock Company. However, after 2 invitations to bid for investors (August 2022 and December 2022), no investors submitted bid documents.

Lao Cai Provincial People's Committee said that investing in airport infrastructure requires a huge amount of capital, while the long payback period, along with the impact of the Covid-19 pandemic, as well as difficulties in the real estate sector, have made investors no longer interested in the project.

It should be added that the lack of investors submitting bidding documents is one of the reasons why Lao Cai Provincial People's Committee proposed to adjust the Pre-Feasibility Study Report of the Sapa Airport Construction Investment Project under the PPP method.

Source: https://baodautu.vn/tang-phan-von-nha-nuoc-tai-du-an-san-bay-sapa-len-4916-tong-muc-dau-tu-d233910.html