Vietnam seeks $300 mln loan from China to fund border expressway

By Anh Minh   May 11, 2017 | 03:23 pm GMT+7
Vietnam seeks $300 mln loan from China to fund border expressway
An expressway in northern Vietnam. Photo by VnExpress

The entire expressway, expected to facilitate cargo transport in the north of the country, would cost around $2 billion.

Vietnam's Cao Bang Province on the border with China is seeking government approval to borrow $300 million from its northern neighbor to build an expressway.

The provincial government and the transport ministry have submitted a proposal to the government asking for investment to build the 144-kilometer (90-mile) expressway linking Tra Linh Border Gate in the Cao Bang with Dong Dang Border Gate in Lang Son Province.

It asked the government to assign either the ministry or itself as the main investor and start negotiations with China to borrow $300 million for the project, which would cost more than VND47.5 trillion ($2.1 billion).

In a meeting with Cao Bang leaders in February 2017, Prime Minister Nguyen Xuan Phuc gave ministries the go-ahead to look at how to use Chinese credit. 

Cao Bang authorities said the expressway will play an important role in the country’s socio-economic development, and should be completed by 2030.

The road will facilitate cargo transport from Guangxi to Hanoi and the northern port city of Hai Phong, from where it can connect with other Southeast Asian countries. Dong Dang, the final terminal of the planned expressway, is three and a half hours drive from Hanoi and four and a half hours from Hai Phong.

The Vietnamese government last year also considered borrowing $300 million from China to build a 96-kilometer expressway in the border province of Quang Ninh, but the provincial government later expressed concerns that Chinese loans usually come with conditions that can delay projects.

An elevated railway project in Hanoi, the first in the capital, has also experienced prolonged delays related to the disbursement of Chinese loans. Construction kicked off in October 2011 and was originally scheduled for completion in 2013, but hurdles have stalled the commercial launch until at least next year.

Vietnam's transport officials last week cited a source from the China Railway 6th Bureau Group, the main contractor, as saying the project had been delayed because China Eximbank had failed to transfer $250.6 million of the loan signed between the two countries.