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ADB grants US$234 million loan for transport system

Update: February, 11/2015 - 17:12
An image of Metro line project in Ha Noi. – Photo

HA NOI (VNS) – The Asian Development Bank (ADB) and the Vietnamese government on February 9 signed two loan agreements totalling nearly US$234 million to help deliver a sustainable urban transport system here.

The signed agreements also include a $230 million policy loan for the Improving Competitiveness Programme, which will support the Economic Management Competitive Credit Programme — a joint development partner budget support program aligned to the national reform priorities of the government. The program will support government reforms in six policy areas, including the financial sector, fiscal policy, public sector administration and accountability, and state enterprise management, as well as public investment management and the business environment.

The second agreement is for a $4.2 million loan for the Strengthening Sustainable Urban Transport for Ha Noi Metro Line 3 Project, which has a total investment of $58.95 million. The project will support the effectiveness and sustainability of another ADB-financed project, the Ha Noi Metro Rail System Project (Line 3: Nhon-Ha Noi Station Section), by improving access to stations and enhancing connectivity between the line and other modes of public and private transport. The project will also strengthen urban transport policies and regulations.

Since it is at an early stage of urban transport development, Ha Noi often faces severe congestion during peak hours caused by heavy usage of motorcycles and increasing numbers of cars on the road. The project will support the Ha Noi urban transport master plan's objectives of increasing the use of public transport, reducing dependency on private vehicles, promoting inclusive low-carbon transport and reducing greenhouse gas emissions and environmental pollution. Along with the ADB's $4.2 million loan, the Clean Technology Fund will provide a $49 million loan, administered by ADB, to support the sustainable transport benefits of the metro line 3 investment.

The World Economic Forum's Global Competitiveness Index for 2013-2014 shows that Viet Nam is losing ground, with its ranking set at 70 out of 148 countries, one place below its ranking in the 2006-2007 survey. It also ranked second-lowest among the member countries of the Association of Southeast Asian Nations. – VNS

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