Mid-Term Review

JBIC ODA Loan Project Mid-Term Review 2006
Evaluator: Yasuhisa Kuroda (OPMAC)
Time of Mid-Term Review Field Survey: March 2007
Project Title: Vietnam “Tan Son Nhat International Airport Terminal Construction Project” (L/A No. VNIX-2)[Loan Outline]
Loan Amount / Contract Approved Amount / Disbursed Amount: 22,768 million yen / 22,053 million yen / 15,303 million yen (as of the end of March 2007)
Loan Agreement: March 2002 (5 years after L/A signing)
Project Completion Date: June 2007
Loan Expiry Date: July 2008
Executing Agency: Civil Aviation Administration of Vietnam (CAAV)
Operation and Maintenance Agency: Southern Airport Authority (SAA)
Selection Criteria for Mid-Term Review: Special Yen Loan
[Project Objective]
The objective of this project is to meet the increased passenger demand at Tan Son Nhat International Airport, which has the largest passenger volume of all the airports in
Vietnam, by building a new terminal for international passengers and related facilities, thereby improving the convenience and efficiency of airport services, which in turn willcontribute to the sustainable socio-economic development of not only Ho Chi Minh City but also Vietnam as a whole.
Consultant: Japan Airport Consultants Inc.
Contractors: J/V comprised of KAJIMA CORPORATION, TAISEI CORPORATION, OBAYASHI COPRORATION, MAEDA CORPORATION[Mid-Term Review Result]
Item
Relevance(1) National policy level

Ex-ante Evaluation (at the time of appraisal)(July 2001)(1) National policy level
In the “Socio-economic Development Strategy” the Communist Party
adopted at its 2001 convention, the Government of Vietnam set its goalof doubling the GDP by 2010 and joining the ranks of industrializing
countries by 2020. Since the expansion of exchanges with foreigncountries and foreign trade is indispensable for reaching these goals, the1

Result of mid-term review and ex-post evaluation results asestimated at the time of mid-term review(1) National policy level
On a national policy level, the transportation sector continued to be
regarded as an important sector. During the five year period from 2000
to 2005, it was confirmed that 27% of the national budget went intotransportation and communications sectors. In the Five-Year
Socio-economic Development Plan (2006–2010), the government

Mid-Term Review(2) Policy levelgovernment regards building the country’s transportation infrastructure
including its aviation and airport sector as an important policy.

continues to cite infrastructure building as an important national policy,
and points out its policy of focusing on building the country’s
transportation infrastructure. Specifically, in the field of aviation, thegovernment has set a goal of putting in place a system capable oftransporting 20 million passengers per year. It hopes to achieve this byupgrading one of the international airports and by improving theperformance of aircraft. In the long-term development plan, importantnational projects are cited in the Appendix Table as “important
projects,” and this project is listed in the section for ODA target
projects. Thus, their importance as national projects is confirmed.

(2) Policy level
In Vietnam, from 1994 to 2001, air transport volume increased by anannual average of 11.9% for passengers and 16.7% for freight against abackground of economic growth and increases in exports and foreign
investment that have accompanied the transition to a market economy.
While demand for air transport volume is expected to increase further asa result of economic growth, most airports are aging, including the threemajor airports: Tan Son Nhat International Airport, Noi Bai International
Airport, and Da Nang International Airport. The Basic Plan for theCreation of an Airport System approved in 1997 points out specificallythat the said three major airports will be developed as hub airports. Ho
Chi Minh City, the location of this project, boasts the largest populationin Vietnam (5 million) and accounts for about 20 percent of its GDP. The
city is the economic center of Vietnam, and about 30 percent of direct
foreign investment is made in the neighboring suburbs. Tan Son Nhat
International Airport plays a vital role by serving as the gateway that
supports the economic growth of Vietnam. According to the city’sFive-Year Socio-economic Development Plan (2001–2005), the city
expects on average an annual economic growth rate of 11% during thetarget period. Recognizing the importance of establishing close economic
2(2) Policy level
With regard to the transport sector, in response to the Five-Year
Socio-economic Development Plan (2006–2010), in August 2005, theMinistry of Transportation adopted and continues to implement theFive-Year Transport Sector Development Plan (2006–2010). The Plan
specifically points out the infrastructure improvement of Tan Son Nhat
International Airport, together with that of Noi Bai International
Airport and Da Nang International Airport, as an important project.
From the perspective of regional development, the Five-Year Socioeconomic Development Plan (2006–2010) designates the southeastern region, which includes Ho Chi Minh City and the surrounding
provinces, as a priority target area that will take the lead inindustrialization and modernization, as well as in economic growththrough developments in commerce, service and tourism.
The continuous importance of the project is confirmed on two fronts:
sector development and regional development.

Mid-Term Review

ties with neighboring countries if the said goal is to be reached, theGovernment of Vietnam cites the infrastructure improvement of Tan Son
Nhat International Airport as a priority task.
(3) Planning level(3) Planning level
In order to respond to the increasing demand for air travel, the Civil
Aviation Authority of Vietnam has improved the terminal at Tan Son
Nhat International Airport, and passenger capacity for domestic andinternational routes combined as of 2000 is five million passengers perannum. While in 2003 passenger numbers are forecast to reach current
terminal capacity, it is difficult to further expand the existing terminal. It
is therefore an urgent task to dedicate the existing terminal to domestic
routes and to build a new international passenger terminal.

(3) Planning level
Tan Son Nhat International Airport has been coping with the recent
increase in number of passengers by, among other things, expanding
some prefabrication facilities, but the airport already exceeds its
terminal capacity (5 million per annum). Economic activities continue
to be brisk in Ho Chi Minh City and neighboring provinces, withdemand for passengers and productivity in manufacturing continuing
to grow in double figures. It can be said that capacity expansion inpassenger and freight transport, together with streamlining, holds the
key to economic growth. Thus, the necessity of this project is high forregional economic development.
Under this project, JBIC provided Special Yen Loans. It is a systemthat was established in December 1998 for the rapid economic
recovery of Asian nations affected by the economic crisis. In addition
to promoting projects that provide a strong economic stimulus to themarket and have a strong impact on the creation of employment, theprimary objectives of the Special Yen Loan are (i) the preparation of
an attractive business environment for private investment, and (ii) the
realization of structural economic reform through improvements in
productivity. Under this system, even more discretionary loans are
granted than in regular projects, thereby providing assistance to therelevant country. Tan Son Nhat International Airport aims to respondto rising passenger demand as well as to increase the convenience andefficiency of air services by constructing a new international passenger
terminal and related facilities at Tan Son Nhat International Airport,
which boasts Vietnam’s largest passenger handling volume. The

3

Mid-Term Review

relevance of the Special Yen Loan is thus recognized.
Effectiveness (Impact)(1) Operation andeffect indicators(1) Operation and effect indicators(a) Quantitative effects
1) Operation effect indicators(1) Operation and effect indicators(a) Quantitative effects
1) Operation effect indicators

Number of international
passengers at peakmonths(departure/arrival)(round)(unit: passenger/m)
Number of international
passengers at peak days
(departure/arrival)(round)(unit: passenger/d)
Number of international
passengers per annum(round)(unit: million passengers/year)
Number of international
tourist arrivals perannum (one way)(million passengers/year)
Number of international
business arrivals perannum (one way)(million passengers/year)

2000Actual(At the time of
ex-ante evaluation)

2007
Original
target2012
Original
target117,924 (departure)
118,379 (arrival)

366,000(round)546,000(round)4,535 (departure)
4,911 (arrival )

2.3

0.8

12,200(round)18,200(round)

4.0

6.0

1.4

2.1

2006 Actual

Number of international
passengers at peak months(departure/arrival) (round)(unit: passenger/m)
Number of international
passengers at peak days
(departure/arrival) (round)(unit: passenger/d)
Number of international
passengers per annum(round)(unit: million/year)
Number of international
tourist arrivals per annum(one way) (million/year)
Number of international
business arrivals perannum (one way)(million/year)

2012
Original
target2020
Original
target9,395(departure)
8,923 (arrival)

24,050(round)28,270(round)

4.8

7.9

9.3

*1

*1

*1

Note *1 Actual performance data is not available.
Source: Southern Airport Authority
0.2

0.3

0.5

Based on the actual performance to date, the executing agency has
revised its forecasts for operation and effect indicators. Calculating backfrom the revised number of international passengers per annum, theaverage annual growth in the number of international passengers from2006–2012 is projected to be 8.5%, which is a more conservative

Source: Ex-ante evaluation table4Mid-Term Review

estimate than the average annual growth rate of 13.6% recorded during
the previous five years. The international terminal being constructedunder this project will be able to handle around 8 million passengers perannum, and if the number of international passengers increases, as theforecast of the executing agency, the number of passengers using the
new terminal will reach the planned capacity by 2012. Should thegrowth rate will be 13.6%, the total number of passengers will reach theplanned capacity, 8.1 million by 2010.
2) Economic growth rate and rate of increase in production in
manufacturing (fixed 1994 price)

Nationwide
GDP growth rate
Growth rate in
manufacturing andconstruction
Rate of increase inproduction value of
manufacturing
8 Provinces insoutheastern Vietnam *1
Ho Chi Minh City

1995–2000（Average perannum）

2000–2005(Average perannum)

2006–2010
Plannedtarget

6.9%
10.6%

7.5%
10.2%

7.5–8.0%
9.5–10.2%

14.3%

15.1%

11.3%

14.2%

Note *1 The eight provinces are: Ninh Thuan、Binh Thuan、Binh Phuoc、Tay
Ninh、Binh Duoung、Don Nai、Ba Ria-Vung Tau、Ho Chi Minh City.

Source: Five Year Socio-economic Development Plan (2006–2010) and
General Statistics Office of Vietnam
Demand for air transport has increased significantly in southeastern
Vietnam. The reason is that since 2000, output in manufacturing has on
annual average increased 15.1% for the entire region and 14.2% in Ho
5

Mid-Term Review

Chi Minh City. In the Five Year Socio-economic Development Plan
(2006–2010), the government projects GDP in Vietnam as a whole togrow at an annual rate of 7.5–8.0% during the five-year period from2006 to 2010 and the average annual rate of increase in manufacturing
and construction to grow at a rate of 9.5–10.2%. These projected rates
of increase are comparable to the rates of increase that were actuallyachieved during the five-year period from 2000 to 2005. Southeastern
Vietnam accounts for most of the nation’s total production value in
manufacturing, with the region as a whole accounting for 48% and Ho
Chi Minh City alone for 23%. The government assumes that economic
activities in the region will continue to be brisk, with the demand for airtransport from 2006 to 2010 expected to increase by about the sameamount as was actually achieved from 2001 to 2005. Just for the record,in the Study on the National Transport Development Strategy(VITRANSS) JICA conducted in 2000, the demand for air transport is
projected to increase at a rate equivalent to1.5 times the rate of increasein Vietnam’s GDP from 2000–2010 and by about the same rate as
Vietnam’s GDP growth rate from 2011–2020.
(b) Qualitative effects
1) Expansion of passenger capacity
2) Improvement of convenience and safety for users of airport facilities
3) Promotion of international exchange of people and goods andsocio-economic development.

6(b) Qualitative effects
1) Expansion of passenger capacity
While it is said that Tan Son Nhat International Airport has the capacity
to handle 5 million passengers per annum, it actually handled a total of
8.47 million passengers, domestic and international combined, in 2006.
Based on the service standards established by the International Air
Transport Association (IATA), the terminal being built under the present
project is designed to handle 8 million passengers. (This is the planned
capacity; in reality, the terminal is believed to be capable of handling 10
million passengers per annum.) With the implementation of this project,
Tan Son Nhat International Airport will be able to handle 8 million
international passengers per annum. In addition, by setting aside theMid-Term Review

existing terminal for exclusive use by domestic passengers, the airport
will be able to handle additional 5 million, bringing Tan Son Nhat
International Airport’s total passenger capacity to 13 million.
2) Improvement in convenience and safety for users of airport
facilities.
The new international terminal is designed, and is being built, in
accordance with the service standards IATA requires of all international
airports. As a result, customers are guaranteed the level of comfort andsafety that conforms to international standards.
3) Promotion of international exchange of people and goods andsocio-economic development.
The use of the new international terminal will promote the exchange of
people and goods (international passenger traffic). With Vietnam’s
largest economic zone in the background, the government is promoting
measures for expanding the country’s transport capacity in conjunction
with the building of related infrastructure. These efforts are expected tosupport the growth of Vietnam by expanding the economic activities in
the relevant economic zones.
(2) Factors which may
influencetheeffectivenessandimpact(2) Factors which may influence the effectiveness and impact(a) Environmental consideration
The completion of the new terminal is expected to increase the number oflandings and takeoffs, which in turn is expected to intensify the impact ofnoise pollution on the area surrounding the airport. The noise level in andaround the airport will begin to be monitored with the support of theconsultants hired in the project. Based on the monitoring results, theexecuting agency and the municipal government of Ho Chi Minh City arescheduled to consider the adoption of a noise-abating method of flying,
impact-mitigation measures through land-use regulations, etc.

7(2) Factors which may influence the effectiveness and impacta) Environmental consideration
The Environmental Impact Assessment (EIA) conducted a survey prior
to the implementation of the project. An environmental monitoring unit
was set up under the project implementation scheme/structure, and thisunit is monitoring the noise, vibration, air pollution, water pollution,etc. during the project implementation stage. As a result, it was foundthat during the implementation period, the project would have only aminor impact on the environment, thus demonstrating that there were no
particular environmental issues. However, it will be necessary to adopt
measures to deal with the noise problem caused by the increase in thenumber of landing and takeoffs expected when the new terminal begins

Mid-Term Review

its operation. The executing agency is receiving guidance from the
Ministry of Natural Resources and Environment regarding measures tobe taken in the future, including relocating those houses located directly
under the approach path, and subsiding noise reduction work. Suchnoise abatement measures should be carefully watched in the coming
months and years.
(b) Plan to build a new airport in Long Thanh
Once the project is implemented, because of its location, it is deemed
impossible to further expand Tan Son Nhat International Airport. As ameasure to deal with the demand in air transport after the number ofinternational passengers reaches its limit in 2012, the Government ofVietnam has decided to build a second airport in Long Thanh, a suburbof Ho Chi Minh City, and has begun research for drawing up a masterplan. Various matters will have to be taken into consideration inconstructing the second airport, including: the future demand trends,
handling capacity of existing airports including terminal expansion,function sharing with the new airport, the time required for building the
new airport, etc. Tan Son Nhat International Airport is expected tocontinue operating even after the construction of the new airport, so thefunctional sharing between the two airports will have an important
impact. In the ex-ante evaluation of the project, the impact on theenvironment is evaluated under the assumption that the new terminal
will be used exclusively for international flights. Therefore, the premiseof the evaluation will necessarily be changed.
(c) Construction of an access roadAt present, taxis and motorcycles are mainly used to get from the centerof the city to the airport, and these vehicles rely entirely on urban streetsto get to and from the airport. Consequently, the problem ofaccessibility caused by deteriorating traffic congestions is assuming
8Mid-Term Review

serious proportions. During the project period, noise levels weremonitored at the construction site and in the area surrounding the
airport. However, no major problems were found at the construction
site, but it was discovered that the noise level of vehicles traveling on
urban streets outside the airport was higher than the permissible
environmental level established by the government. The launch of the
new terminal is projected to increase the total number of passengers by
about two-fold in the next several years, raising concerns that the
problem of noise caused by traffic accessing the airport would be
intensified. In Ho Chin Minh City, a plan to build a transit system likethe one listed below is being implemented (based on a hearing held in
CAAV and in the Ho Chi Minh City Transportation Authority).
・ Construction of an elevated road linking the city to the airport (landacquisition commenced)
・ Widening the existing arterial road (Nguyen Van Troi Street、land
acquisition commenced, to be completed in 2010)
・ Subway lines extending all the way to the airport (several lines arebeing planned supported by the Japanese ODA Loan, AsianDevelopment Bank, and other donors)
・ Shuttle services offered by each hotel
・ Development of bus-only roads (F/S executed by The WorldBank)(d) Utility provision
With regards to the operation of the new terminal, there still remain
problems to be solved concerning water and fuel provision.
1) Water
Ho Chi Minh City is supposed to supply water, but the water pressure in
the city is so low that it will be difficult to supply the required volume
of water to the new terminal. Therefore, it is inevitable to supply waterby tank trucks at the beginning of the terminal operation. The city has
9Mid-Term Review

promised to gradually improve its water supply system, but it is unclear
when this will begin.
2) Fuel oil
An underground petrol pipe was laid for fueling aircraft, but theconstruction of oil transfer facilities has not made any progress. This isbecause the company that was supposed to provide the capital
investment failed to keep its promise. Consequently, when the newterminal begins its operation, it will be necessary to deliver and fuel theterminal with tank trucks. The company that has reneged on its promise
will be reminded to come through with the investment. Its response will
be carefully monitored, and if it still fails to keep its promise, it will benecessary to take action, including asking the government to step in.
(3) Factors which may
influencethesustainability(3) Factors which may influence the sustainability(a) Operation and maintenance system
The Southern Airport Authority, which is under the supervision of the
Civil Aviation Administration of Vietnam, will carry out the operation,
maintenance and management of the project.

10(3) Factors which may influence the sustainability(a) Operation and maintenance system
There have been no changes since the original plan.
(b) Training of O&P personnel
The contractors will provide the training for the personnel assigned tohandle the operation and maintenance of the project. The Southern
Airport Authority (SAA) has already assigned the O&M personnel, andis now preparing for the start of the training. By May 2007, thecontractors will have completed the preparation, including the writingof the course materials.
(c) Execution capability on the fiscal front
SAA operates and maintains seven airports located in the southern partof Vietnam including Tan Son Nhat Airport. A self-supporting
accounting system is adopted under which various expenses, including
maintenance and facility improvement costs, are paid out from theearnings made in the aviation business (airport facility fee, landing fee,rent receivable, etc.). Earnings gained from operating Tan Son Nhat
Airport remain in the black to the tune of the total maintenanceMid-Term Review

expenses for the seven airports, which means that on the fiscal front,
there is no concern with the financial aspect for the operation andmaintenance of the project.

Efficiency(1) Outputs(1) Outputs(1) Outputs
Itemization of

Equipment

Scale/

Itemization of

Equipment

Scale/

work

volumework

volumeInternational

Number of wings

1

International

Number of wings

2

passenger

Total number of

3 floorspassenger

Total number of

4 floors

terminal

floorsterminal

floorsTotal floor area
Related facilities

75,000 ㎡

Total floor area

2 setsRelated facilities

Hand luggage
processing system

1 set

Airport information

display
36 units

X-ray inspection unitsRoad

41,000 ㎡

Roads/ parking

Roads

area

Parking area

34,000 ㎡

area

Parking area

Support vehicle

32,000 ㎡

Utilities

Consulting

Foreigners

services

Vietnamese

Aircraft fuelingfacilities

4 sets2 setsdisplays

Road/ parking

passage
Fuel filler pipeand related
facilities
Power/communication/watersupply/sewage
treatment/solid
waste treatment

Hand luggage
processing system

Airport information
X-ray inspection unit

92,920 ㎡

Support vehicle

53 units
58,630 ㎡

27,115 ㎡

Utilities

passage
Fuel filler pipeand related
facilities
Power/communication/watersupply/sewage
treatment/solid
waste treatment

434 months

Consulting

Foreigners

535 months

975 months

services

Vietnamese

1,236 months

2,400 mAircraft fuelingfacilities<Evaluation of the changes>
11

2 X 1,700 m

Mid-Term Review

At the time of the project was launching, the No. 2 wing was added and
one floor was added between the ground floor and the second floor. As
a result, the floor area increased by 24% over the original plan. In
addition, in order to meet the expected increase in the number ofpassengers using the new terminal, the number of hand luggage
processing systems, inspection equipment, etc was increased. Thesechanges have been made to enable the new terminal to handle many
more passengers without increasing the total cost of the project.
Therefore, they are evaluated as changes to bring positive effects.
<Reasons for the changes>
1) Addition of the wing
· To increase the opportunity for passengers to get on and off aircrafts
directly.
· By constructing a passage connecting international flights anddomestic flights, it will be possible to manage the two in an
integrated manner.
2) Addition of the floor and expansion of the floor area
· To streamline customer management for efficiency by preventing themoving line of arrival passengers and that of departing passengers
from crossing each other.
· To secure sufficient space for check-in counters, offices, passenger
waiting rooms, and technical service rooms.
3) Increase in the number of related facilities· To deal with the surge in the number of passengers and operate theterminal more efficiently.
(2) Project period(2) Project period
March 2002 – December 2006 (57 months)(2) Project period
March 2002 – June 2007 (63 months)
The project period was extended by 6 months from the original plan.
The terminal building has been open since July 2007.
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Mid-Term Review

Results of Special Yen
Loan
Satisfaction
SurveyThe significance of the Special Yen Loan at the time of loan providing is
as follows;
The Vietnamese economy was hit hard by the Asian economic crisis.
While it maintained a growth rate of 8–9% over the several years prior tothe crisis, the high pace of growth began showing signs of a slowdown,with the growth rate dipping to 4.8% in 1999. While the Vietnamese
economy is seen to have strong potential, its economic foundation
continues to be fragile in comparison with other ASEAN member
countries. Given, among other things, the urgent need for infrastructurebuilding and the fear that the slowdown in economic growth will
strengthen the voices of those critical of the government’s Doi Moi(renovation) policy, thereby forcing the government to rollback on its
commitment to make the transition to a market economy, it is essentialthat Japan continues to provide support for Vietnam.
(a) Degree of maturity
Already approved by F/S and EIA(b) Provision of a business environment that is highly effective inboosting the economy and attracting private investment
In Ho Chi Minh City, the center of Vietnam’s economy which has a highpotential for economic growth, the project will provide an extremely
important infrastructure for improving the efficiency of distribution
systems and for its economic activities, and thereby contribute to thegrowth of the Vietnamese economy as a whole.
(c) Reflection of Japan’s know-how and technology, and procurementfrom Japan
The project will put into use the full force of Japan’s know-how andadvanced technologies in the manufacturing of special equipment andinstallations. These include the technique of constructing giant building
13(1) Purpose of adoption
While the Ministry of Finance cites the low interest rate, long
repayment period, and high technology as reasons for adopting theSpecial Yen Loan, the executing agency cites the low interest rate, long
repayment period, securing high-quality project, and adoption ofadvanced technology.
(2) Competition and procurement
All three companies participating in P/Q passed it, and two of thesethree participated in the bidding. Since leading Japanese contractors(both successful and unsuccessful bidders) formed a consortium andparticipated in the bidding, only three P/Q participants actuallyparticipated. Competitive bidding by a large number of companies,
which the Government of Vietnam had expected, was not materialized.
The Ministry of Finance indicated that this lack of participants hurt thecompetition. Commenting on the qualifications required for
subcontracting or assuming the role of eligible source countries, theexecuting agency said: “We often experienced difficulty implementing
the project because of the strict regulations governing the Special Yen
Loan, and because of the restrictions imposed on subcontractors, we
could not select our subcontractors from a large pool of companies.
Thus, we were forced to select from a limited number of candidates.
The regulations governing eligible source countries presented an evengreater difficulty. Even when a piece of equipment was better than the
one proposed by the contractor, or there was a much cheaper substitute,we were forced to stick with the one proposed by the contractor. We
hope to see a broadening of the range of eligible source countries.”
Meanwhile, one of the contractors offered this comment: “Because of
the regulations governing subcontractors, we are not allowed to employ
subcontractors from a third country even if they have better skills thanthose in Vietnam. Instead, we are forced to hire Vietnamese companies

Mid-Term Review

structures, highly reliable electrical installation work, hand luggage
processing system, and flight information system. Additionally,
procurement of materials and equipment and services required inconstruction is expected to exceed 50 percent of the total amount ofJapanese ODA Loan. Thus, the contributions of Japanese companies are
extremely high.

with inferior skills. Also, due to regulations governing countries oforigin, we are prevented from procuring better materials, equipment
and services from third countries. What’s more, as a result of thesuccessful globalization of Japanese companies’ production process,there are now only a limited number of products and equipment that canbe defined as “procured domestically,” which made it difficult toeffectively implement the project.” The same contractor cited thefollowing case as a concrete example of the difficulty he had faced:“Many electrical goods are sold under Japanese brands, but most are
actually made in Southeast Asia, so they deviate from the definition of“Made in Japan.” For instance, when we purchase elevators, we firstprocure their components; then we assemble them locally into end
products. The country of origin is defined by Japan’s tariff law as “thecountry where the final act that confers a new characteristic.” On thebasis of this definition, we argued that since the parts were assembled in
Vietnam, it should be regarded as “Made in Vietnam.” Our argument
was rejected. These sorts of isolated problems have occurred frequently,
and each time, the executing agency, the consultant and JBIC have had
to confer with each other. These procedures required many hours andefforts to resolve.”(3) Competence of primary subcontractors
Under the Special Yen Loan system, primary sub-contracts are bilateraland are tied. Five companies were selected as primary subcontractors tohandle the building of the body. All five were Vietnamese companies.
The executing agency intended to select the consultant and contractors
from companies that are uniformly recognized by the executing agency
as being among Vietnam’s leading companies; however, there werecases where companies that were regarded as excellent withdrew.
Generally speaking, Vietnamese people were weak in terms of
implementing capability. In addition, comments from the contractors

14Mid-Term Review

and consultant confirm that, generally speaking, primary subcontractors
in Vietnam are cash-strapped, which makes it hard to mobilize enoughworkers for the project.
(4) Project cost
A hearing from the consultant, it was found that there was a case where
primary subcontractors in Vietnam had stood the bilateral tie on its headand demanded the contract more costly than usual. In this case, theconsultant explained that the contract amount had become 103% of theestimated price approved by the government. The executing agency
regards this ratio higher than the standard ratio observed in Vietnam.
(5) The executing agency’s evaluation of the contractors
In evaluating the performance of the contractors, the executing agency
rated their performance in terms of five items: 1) Handling of theprocess, 2) Quality of execution, 3) Project management, 4) Quality ofdeliverables, and 5) Technology transfer. On a scale of 1–5, theexecuting agency gave the contractors the second rating “Satisfied for2) and 4), the third rating “Somewhat satisfied” for 1) and 3), and themark “Unable to evaluate, saying that the project has not been
completed” for 5). The executing agency’s evaluation of the project
implemented with the Special Yen loan is high (i.e., satisfied) for
execution of the construction work and deliverables, but not quite as
satisfied for construction and process management.
Lessons Learned andRecommendations[Recommendations]· The new terminal that will be built under this project is expected by 2012 to have enough installed capacity to handle the number of passengers thatwill be using the new terminal. Although the project is still in progress, a survey on the construction of the second airport has already started. In
addition to carefully monitoring the demand trend going forward, while ascertaining the capacity of the existing airport, including the new terminal,
and keeping in mind that it will be some time before the new airport is built, thorough preparation and implementation are recommended with theview to realizing an effective execution period, sharing of airport capacity, and management.
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Mid-Term Review

Indicators set for use at
the time of ex-post
evaluation· Given the difficulty of providing utilities at the same level as originally planned due to reasons best known to the supply side, there is concern thatthe effectiveness of the project may be affected. It is recommended that close coordination and consultation be carried out with each supplier andadvance effective measures to resolve this issue.
· It is important to reduce the load on city traffic and improve accessibility to Tan Son Nhat International Airport by diversifying the accessmeasures. Thus, it is recommended that necessary measures be taken.
· In monitoring and evaluating the effectiveness of the project, taking into account the objective and the actual condition of the site, it isrecommended that, of the contents agreed upon as operation and effect indicators, those adopted as effect indicators be reconsidered in terms of thecontents discussed in the next section.
JBIC and the executing agency agree to monitor the following operation (1) Monitoring
Of the agreed upon monitoring indicators, SAA has continued to monitor
and effect indicators.
the number of international passengers at peak hours and number ofIndicator
Unit
Applicationinternational passenger per annum. However, continuous monitoring has
Passen Annual number ofOperatio Number of international
not been conducted for the number of international passenger duringger/m international passengers atnpassengers at peak months
peak months, the number of foreign passengers per annum, the number
peak months
onthindicator (departure/arrival) (round)of international tourist passengers per annum, and the number of(departure/arrival) (roundbusiness passengers per annum. The number of international passengers,trip) (unit: passenger/m)
the number of domestic passengers, the amount of freight handled, andPassen Annual number of
Number of international
the number of landings, etc. has been continuously monitored asinternational passengers atgerpassengers at peak days
important indicators, and are recorded as shown in the Appendix Table.
(departure/arrival) (round)

Effectindicator

Number of international
passengers per annum(round)Number of foreign
passenger arrivals perannum (one-way)
Number of international
tourist arrivals per annum(one-way)
Number of international
business passenger
arrivals per annum(one-way)

/day

Mil.
pass./year
Mil.
pass./year
Mil.
pass./year
Mil.
pass./year

peak days(departure/arrival) (roundtrip) (unit: passenger/m)
Total number ofinternational passengers
per annum
Total number of arriving
foreign passengers per
annum
Total number of arriving
international tourists per
annum
Total number of arriving
international
businesspassengers per annum

16(2) Problems in monitoring implementation
The number of landings and the number of domestic passengers, which
are basic indicators in airport management, are not included in the agreed
upon indicators. These indicators are affected by factors other than theconstruction of an international passenger terminal. However, it isdesirable that these indicators be continuously monitored as relevant
indicators.

Mid-Term Review

Appendix Table

Actual Performance of Tan Son Nhat International Airport
Unit

2001

2002

ActualComparedwithprevious
year

2003

ActualComparedwithprevious
year

2004

ActualComparedwithprevious
year

2005

ActualComparedwithprevious
year

2006

ActualComparedwithpreviousyear

ActualComparedwithprevious
year

Number of passengers

1000•％

4,499

―

5,319

18.2%

5,062

▲4.8%

6,244

23.4%

7,345

17.6%

8,472

15.3%

International

1000•％

2,657

―

3,199

20.4%

2,898

▲9.4%

3,726

28.6%

4,312

15.7%

4,865

12.8%

Domestic

1000•％

1,841

―

2,120

15.2%

2,164

2.1%

2,517

16.3%

3,033

20.5%

3,608

19.0%

Departure1000•％

1,379

―

1,652

19.8%

1,502

▲9.1%

1,921

27.9%

2,220

15.6%

2,500

12.6%

Arrival1000•％

1,279

―

1,548

21.0%

1,396

▲9.8%

1,805

29.3%

2,092

15.9%

2,365

13.0%

Departure1000•％

913

―

1,037

13.4%

1,062

2.4%

1,232

16.0%

1,488

20.8%

1,776

19.4%

Arrival1000•％

928

―

1,082

16.6%

1,102

1.8%

1,285

16.6%

1,545

20.2%

1,832

18.6%

1000 t•％

102

―

133

30.4%

159

19.5%

184

15.7%

196

6.5%

220

12.2%

International

1000 t•％

68

―

92

35.3%

113

22.8%

130

15.0%

133

2.3%

147

10.5%

Domestic

1000 t•％

34

―

41

20.6%

46

12.2%

54

17.4%

63

16.7%

73

15.9%

Departure1000 t•％

36

―

51

41.7%

64

25.4%

73

14.1%

73

0.0%

81

11.0%

Arrival1000 t•％

32

―

41

28.1%

50

22.0%

57

14.0%

60

5.3%

67

11.7%

Departure1000 t•％

20

―

23

15.0%

25

8.7%

29

16.0%

36

24.1%

42

16.7%

Arrival1000 t•％

15

―

18

20.0%

22

22.2%

25

13.6%

28

12.0%

31

10.7%

Aircraft•％

38,521―

44,58915.8%

44,216▲0.8%

53,62721.3%

59,243

10.5%

63,9898.0%

Aircraft•％

22,262―

25,46914.4%

24,413▲4.1%

30,34024.3%

32,7407.9%

35,360

8.0%

Int.

Dom.

Total amount of cargohandled

Int.

Dom.

Total number ofaircraft *1
International *117Mid-Term Review
Domestic *1

Aircraft•％

16,259―19,12017.6%

19,803

3.5%

23,28717.6%

26,50313.8%

28,6298.0%

Note *1 In recording the number of landings and takeoff, each landing or takeoff is counted as involving 1 separate plane. Therefore, when a plane lands and takes off, the action iscounted as involving two planes.
Source: Southern Airport Authority

18