HANOI, December 5, 2011 (AFP) - Vietnam has begun construction of a second terminal to ease overcrowding at the only airport in the nation's capital, the government said.
Officials held a ceremony at the Noi Bai airport on Sunday to break ground on the four-storey facility which is being funded by more than 75 billion yen ($961 million) in Japanese aid, the Vietnamese government said.
"Terminal 2, expected to be completed by the end of 2014, was designed to handle 10 million passengers per year," it said in a statement released Sunday.
The existing terminal handled some 9.5 million passengers last year, exceeding its capacity of six million, the official English-language Vietnam News reported.
Flag carrier Vietnam Airlines hopes to make the country's two biggest airports -- in Hanoi and Ho Chi Minh City -- gateways to the fast-growing Southeast Asian region.
But analysts say the country needs to spend far more on airport and other key infrastructure in order to compete with aviation hubs like Bangkok or Singapore.
At a World Bank-backed forum last Friday, the American Chamber of Commerce in Vietnam said the country continues to face "deficiencies and delays" in developing key infrastructure including approach roads, bridges, power plants, seaports and light rail.
In addition to the Terminal 2 project, Japan is funding an expressway and bridge link to the airport.