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Vietnam borrows additional $30.6mn from S.Korea for expy project in southern Vietnam

Vietnam borrows additional $30.6mn from S.Korea for expy project in southern Vietnam

Saturday, July 22, 2023, 08:32 GMT+7
Vietnam borrows additional $30.6mn from S.Korea for expy project in southern Vietnam
The My An-Cao Lanh expressway project is part of a road linking the southeast and southwest of Vietnam without passing through Ho Chi Minh City. Photo: My Thuan Project Management Board

The Vietnamese Ministry of Transport has borrowed an official development assistance (ODA) loan worth US$30.6 million from South Korea’s Economic Development Cooperation Fund (EDCF) for the first phase of the My An-Cao Lanh expressway project in the Mekong Delta province of Dong Thap.

The ministry said it had written to Eunho Hwang, head of the operating board of EDCF, funded by the Export-Import Bank of Korea (Keximbank), asking for the loan as the project saw cost overruns of over VND1.4 trillion ($57.55 million).

The 26.56-kilometer expressway will start at N2 Road in My An Town, Thap Muoi District, Dong Thap Province and end at the An Binh Intersection in Cao Lanh City, Dong Thap.

The Vietnamese prime minister approved the first phase of the expressway project and its $206 million price tag on December 27, 2021.

Of the total capital needed, some $158.8 million would be borrowed from the EDCF as an ODA loan.

In January 2022, the Ministry of Planning and Investment sent a digital dispatch to the South Korean Embassy in Vietnam suggesting that the South Korean government provide the ODA loan for the My An-Cao Lanh Expressway.

The My Thuan Project Management Board later produced a feasibility report for the project based on a consultation from South Korea’s Jinwoo Engineering Co. Ltd., according to the Ministry of Transport.

According to the feasibility report, the estimated investment for the project rose by $57.55 million, with loans borrowed from EDCF rising by $30.62 million.

The Ministry of Transport attributed the cost overruns to an increase in the cost of site clearance, construction, and project management between the release of the project’s prefeasibility report in October 2020 and the release of the project’s feasibility report in October 2022.

The ministry said it had asked the prime minister to approve adjustments to the investment plan for the project.

In particular, ODA loans borrowed from the EDCF would be increased to $189.42 million and used to make payments for construction and equipment costs.

The ministry asked Keximbank to clarify its ability to offer a $189.42-million ODA loan for the My An-Cao Lanh expressway project.

The expressway, once completed, will allow commuters to travel at a maximum speed of 100 kilometers per hour. It will feature six lanes measuring 32.25 meters wide.

In the first phase, the road will feature four lanes with a width of 17 meters and have a designed speed of 80 kilometers per hour.

Construction of the project is expected to last five years, according to the ODA loan agreement with the EDCF.

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Thanh Ha - Tuan Phung / Tuoi Tre News

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