Japanese ODA flows into transport projects

The transport sector has received the largest share of Japan’s official development assistance (ODA) loans to Vietnam over the past more than 20 years. 

Illustrative image. – File photo

Statistics for the 1992-2012 period show that ODA funds to Vietnam totalled 2.1 trillion JPY, with the transport sector receiving 43 percent, followed by environment and health with 15 percent, mining with 3 percent, and agriculture-forestry-fishery with 2 percent.

Mori Mutsuya, Representative Chief of the Japan International Cooperation Agency (JICA) in Vietnam, said large-scale transport infrastructure projects have contributed to improving local residents’ incomes through boosting economic growth.

Out of all the projects benefitting from Japanese preferential loans, Mori Mutsuya said he was particularly impressed by the construction of the belt road 3 in Hanoi, which was opened in October 2012.

“The project applied modern technology of Japanese firms, helping reduce construction time to 15 months from 30 months. It acts as a good example for other ODA projects in terms of quality and safety management”, he said.

Currently, the Ministry of Transport is focusing on two Japanese ODA-funded projects, namely Nhat Tan Bridge and the new T2 terminal at Noi Bai International Airport.

As a key national infrastructure project, Nhat Tan Bridge will connect downtown Hanoi with other northern localities and shorten travel time to Noi Bai Airport.

Meanwhile, the terminal has a total investment of close to 900 million USD, including 700 million USD from Japan’s ODA. It is expected to cater for 10 million passengers per year after completion in December this year.

Vietnam’s effective use of Japanese ODA for traffic infrastructure projects is considered a precursor for more ODA projects. At present, JICA is evaluating loans for the second phase of the Tien Sa Port upgrade and expansion project in the central city of Da Nang.

Tien Sa Port is forecast to become one of Vietnam’s biggest deep-water seaports. Its second phase requires a total investment of 100-120 million USD.

Nguyen Thanh Van, General Director of the Ministry of Transport’s Project Management Unit 85, which was assigned to prepare the investments, expressed his hope that the project will soon be approved by the ODA donor as the current port is almost overloaded.

In addition to this project, the ministry has put forward three more projects for the priority list getting Japanese ODA during the second phase of the 2014 fiscal year.

It has also completed a list of 29 traffic infrastructure projects worth 470 billion JPY (6 billion USD) that will be submitted for Japanese ODA between 2014 and 2016.

Of those, 15 are large-scale projects, such as the North-South highway sections Trung Luong-My Thuan and Nha Trang-Phan Thiet, the Long Thanh international airport, and the Hanoi-Noi Bai railway.

These projects are considered top priorities as they will have a major socio-economic impact and comply with JICA’s loan provision requirements.

“Since the State budget is limited, Japanese ODA at low interest rates will continue to play a vital role in Vietnam’s transport sector”, Deputy Minister of Transport Nguyen Ngoc Dong said.

To ensure the effective use of ODA, the Transport Ministry pledged to actively work with relevant agencies to improve the transparency of capital management and accelerate the progress of major Japanese ODA-funded projects.

VNA