HCMC – The Ministry of Transport has asked the World Bank (WB) to consider increasing interest-free credit for the Danang-Quang Ngai expressway project to reduce risk of debt distress.
The US$1.5 billion road expressway has been discussed between Deputy Minister of Transport Ngo Thinh Duc and the WB’s task force. This is one of the major road projects in central Vietnam, according to a statement issued by the ministry.
Duc has urged the project management units and developer Vietnam Expressway Investment and Development Corp. (VEC) to complete the environment impact appraisal report on the project in line with the international donors’ requirements.
Duc has also told leaders of VEC, Project Management Unit 85 and Project Management Unit 1 to find a proper financing plan for the project. VEC is tasked with finalizing this plan for submission to the ministry this month. Based on this plan, the ministry will work with relevant agencies and international donors over the funding of the road project.
According to the ministry, the 140-kilometer road project has a low level of financial efficiency. So the ministry has suggested the WB increase the proportion of its International Development Association (IDA) financing for the project to mitigate risk. VEC plans to develop the expressway at a total cost of VND29.2 trillion, with US$576 million equivalent coming from the WB, or 38.4% of the total. JICA will provide US$725 million (48.3%) and the remaining US$200 million, or 13.3%, from Vietnam.
The project consists of a 131.5-kilometer expressway passing through Danang City and Quang Nam and Quang Ngai provinces, and a 8.5-kilometer road connecting to National Highway 1A.
The four-lane expressway is designed for vehicles to travel at a maximum speed of 120 kilometers per hour.
The expressway project is scheduled to get off the ground next year, and will be developed into two phases lasting four years.
* In a related development, the transport ministry sent a document to the Ministry of Planning and Investment to register another expressway, Nghi Son-Bai Vot. The 94.1-kilometer highway linking Nghi Son in Thanh Hoa Province and Bai Vot in Ha Tinh Province is part of the north-south expressway already approved by the Prime Minister.
Under a proposal by consultant Road and Bridge Engineering Consultants JSC, the freeway will have four to six lanes for vehicles to run at 120 kilometers per hour. This project needs a total of some VND20 trillion and is scheduled for building in 2011-2014 period.
Vietnam needs US$16 billion for traffic infrastructure projects a year, but it can manage only half of it on its own. At a recent Consultative Group meeting, international donors said weak infrastructure is one of the biggest barriers to foreign investment in the country.
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