Vietnam wary of China’s offer to loan $300 million for major road project

By Toan Dao   July 25, 2016 | 04:30 pm PT
Vietnam wary of China’s offer to loan $300 million for major road project
Vietnam's Hanoi-Hai Phong Expressway. Photo by VnExpress/Giang Huy
Vietnam seems to have enough of notorious Chinese deals that come with strings attached.

Vietnamese ministries are carefully evaluating an offer from China that promises to provide more than $300 million to finance a road project in the northern province of Quang Ninh, Voice of Vietnam reported on Monday.

Vietnam plans to construct a 96km expressway connecting Mong Cai City to Van Don Island District in the province. Mong Cai borders China’s Guangxi Province.

China, via the state-owned Export-Import Bank of China, has offered to lend Vietnam $304.6 million or nearly 80 percent of the total investment of $382 million to implement the project, Voice of Vietnam said.

Vietnam’s Ministry of Transport supports securing the loan from China, saying it is an urgent and important project. It also wants to be given the authority to override Quang Ninh's provincial government and approve the expressway project.

Meanwhile, the Ministry of Finance said the country should consider China’s proposal carefully. It said normally China will demand the borrower use their contractors, technology and machinery as part of the terms of the loan. 

“It is crucial to continue to negotiate with the Chinese side to clarify the conditions of the loan and ask for better terms than the latest offers,” the Ministry of Planning and Investment said in a statement, adding that the deal should not include conditions that involve hiring engineering, procurement or construction contractors from China.

Vietnam’s reluctance to accept the loan follows problems with a number of Chinese contractors in Chinese-funded projects here.

China Railway 6th Bureau Group, the principal contractor of the Cat Linh-Ha Dong skytrain in Hanoi, for example, has come under fire for dragging its feet on the project, missing the 2015 deadline. 

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