Construction of a second terminal has started at Hanoi Airport to ease overcrowding, the Vietnamese government said.

The four-storey facility is being funded by more than 75 billion yen (741 million) in Japanese aid.

“Terminal 2, expected to be completed by the end of 2014, was designed to handle 10 million passengers per year,” a statement added.

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 infrastructures to compete with aviation hubs like Bangkok or Singapore.

In addition to the Terminal 2 project, Japan is funding an expressway and bridge link to the airport.

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