ADB Set To Approve $1.1 Billion Loan For Chinese-Vietnamese Road

December 13, 2007 9:44 p.m. EST

Manila, Philippines (AHN) - The Manila-based Asian Development Bank (ADB) is set to approve a $1.1 billion loan for the China-Vietnam road link. It will be the largest single-project loan the regional bank will lend to finance construction of the 152 mile (244 kilometer) highway.

The new road will link Hanoi in Vietnam with China's Kunming province, where soldiers from both nations traded bullets three decades ago on its borders.

The four-lane roadway, once completed by 2012, will facilitate trade between the China and Vietnam, both enjoying speedy economic growth rates. The ADB is expected to approve on Friday the Vietnam component of the loan amounting to $10 million for the Ho Chi Minh city-Long Thanh-Dau Giay Expressway Technical Assistance Project.

The loan will be used for pre-construction activities such as detailed engineering design, updated resettlement plans for displaced residents, and bidding documents for civil works, goods and consulting services.

Paul Vallely, senior transport specialist of ADB's Vietnam Resident Mission, in a press statement, explained, "The road network both within and around Ho Chi Minh City is becoming heavily congested. As a result, travel speeds are slowing and transport costs are rising. There is an urgent need to provide relief to the city roads."

The highway is actually a section of the Asian Highway program which seeks to build 86,992 miles (140,000 kilometers) of road networks through 27 Asian nations. While the cost is heavy, economic returns to countries linked is higher. Barry Cable, a United Nations transport infrastructure expert in Bangkok, estimated returns at 5 to 10 times higher than the investment.

When completed, it will cut travel time between China and Vietnam to nine hours from the present three days.

Ayumi Konishi, ABD's Vietnam country director, said "Both countries are reaping the fruits of peace and cooperation....In one generation, they have moved from tanks and troops to trade and tourism."