ADB helps Vietnam develop road transport

A US$1 million technical assistance (TA) grant from the Asian Development Bank (ADB) will help increase efficiency in road transport administration and attract investment in Vietnam’s rapidly expanding road transport network.

The grant, sourced from the Japan Fund for Poverty Reduction and funded by the Government of Japan, will provide the Ministry of Transport and its support agencies with guidelines to strengthen institutional and financial arrangements, operation and maintenance, and governance.

The rapid economic growth in Vietnam is estimated to require as much as US$16 billion annually in new infrastructure investments from 2011 to 2020, or 20 percent of the projected gross domestic product (GDP).

Funding for road projects will be improved through the TA. An assessment will be made on how to fund the Vietnam’s North-South Expressway Project, a massive road development project estimated to cost $17.9 billion and covering 1,811 kilometers of expressway stretching from Ha Noi to Can Tho on the eastern side of Vietnam. Possible funding options include public-private partnership (PPP), official development assistance, and government funding. PPP arrangements are more closely assessed in the most southern section of the project, the My Thuan-Can Tho Expressway, which is included in ADB’s indicative assistance pipeline.

“Vietnam needs to attract more investments into the road transport sub-sector. Private sector participation, which is still developing, is crucial for bridging the huge financial gap between infrastructure demand and available budget,” said Masahiro Nishimura, Transport Specialist in ADB’s Southeast Asia Department.

The government will contribute US$150,000 to the total estimated cost of US$1.15 million. The Ministry of Transport is the executing agency for the TA project, which is expected to be completed in August 2011.

In another development, ADB will provide an additional US$40 million to help Vietnam carry out administrative reforms and facilitate simpler and quicker activities of small and medium-sized enterprises. – ADB/VOVNews

Tags: Vietnam transportation