Korea eyes $1.7bn road project in Vietnam

The eight remaining legs of the 105.5km-long highway yet to be built are expected to offer sizeable investment opportunities.

Deputy Minister of Strategy & Finance Joo Hyung-hwan this week attended a ceremony for the partial opening of the Hanoi-Hai Phong Expressway in Vietnam, an event followed by negotiations on investment opportunities underlying the eight remaining legs of the project yet to be built.

The Hanoi-Hai Phong Expressway forms part of the Pan-Asia Highway Project – also known as the Asian Highway Network Project – connecting Kunming in the Yunnan Province of southern China to Hanoi and Hai Phong.

A total of $1.709 billion is scheduled to be invested in the construction of the 105.5-kilometre-long expressway. Once the project is completed, the length of time taken to travel from Hai Phong, the largest port city in Vietnam, to the capital of the country will be shortened from about four hours to 90 minutes.

The Korean government has already provided $100 million for the seventh leg and $100 million for the 10th leg of the project via the Economic Development Cooperation Fund (EDCF). It is planning to encourage the participation of more Korean builders in Vietnam's infrastructure, where road and railway projects each worth $200 million to $300 million are in the pipeline, according to local Vietnamese press reports.

The Intergovernmental Agreement on the Asian Highway Network, signed in Shanghai, China, in April 2004 and marking the revival of a project initiated by United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in 1992, came into force on 4 July 2005.  The agreement aims to complete 141,000 kilometres of standardised roadways spanning 32 Asian countries with linkages to Europe.  The Asian highway network targets direct travel from Tokyo to Istanbul, seen as facilitating trade and tourism and opening up landlocked countries.

The Intergovernmental Agreement on the Asian Highway Network was the first treaty developed by ESCAP and deposited with the UN Secretary-General.  It sets technical standards for road and route signage and includes mechanisms for amendments or additional routes. Twenty-seven out of the 32 participating member states have signed the agreement.

The ESCAP is working with the Asian Development Bank, the World Bank, the Japan Bank for International Cooperation, the Islamic Development Bank and other partners to help countries identify sources for investment. The expressway has 10 sections. At present, the seventh section, 7.3-kilometre long, is fully open, along with the eighth and ninth and a 500-metre long portion of the 10th. The others are slated to be opened in stages by the end of this year.