Vietnam's government approves plan for $13.8 bln north-south expressway

By Doan Loan   May 26, 2017 | 03:43 pm GMT+7

The first stretch of the road will connect Hanoi with Hue by 2022.

The Vietnamese government has approved a plan to build a north-south expressway from Hanoi to Ho Chi Minh City at a cost of more than VND312 trillion ($13.8 billion). 

Prime Minister Nguyen Xuan Phuc has given the green light to a proposal by the transport ministry to build the 1,372 kilometer (852 miles) expressway in three phases, the government office said in a statement on Thursday. Some sections of the road have already been completed.

Investment for the first phase will include VND55 trillion from the state budget, which will be used mostly for ground clearance and relocation, while the rest of the funds are expected to come from private sources, the statement said.

While a start date for the project has yet to be finalized, the first phase is scheduled for completion by 2022, while the second and third phases will be finished by 2030, according to the plan.

The expressway is expected to run through 20 cities and provinces, connecting economic centers, industrial zones and seaports, and reducing transport pressure on the north-south national highway.

Vietnam's state budget is strained at present with revenue falling following cuts to import taxes as part of the country's commitments to free trade deals. The government estimated public debt at the end of 2016 at 63.7 percent of the country's gross domestic product.

The World Bank has forecast Vietnam’s public debt will rise to 64.4 percent in 2017 and 64.7 percent in 2018.