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Press Releases

March 28, 2000

Overseas Economic Cooperation Operation

1. Characteristics of the Loans

(1) Background of the Loan

a) Vietnam has been promoting the transition to a market economy under a policy of Doi Moi (renovation) since 1986. Vietnam maintained a high economic growth rate of more than 8% annually, in particular from 1992 to 1997, supported by high-levels of foreign direct investment. Nonetheless, reduced foreign capital inflows from neighboring countries and declines in export growth that accompanied the onslaught of the Asian currency crisis in 1997 caused the GDP growth rate to fall to 5.8% in 1998, and to slow even further to around 5% in 1999.

b) This slowdown in growth has clearly exposed the structural problems in the Vietnamese economy. Because the nation is in the process of transition to a market economy, institutional reforms and human resource development are necessary. Moreover, the socioeconomic infrastructure, such as transportation and electricity, which are severely lacking and growing more and more dilapidated, is the greatest barrier to Vietnam's economic development. Also, economic gaps between regions, such as between urban and rural areas, have been widening in recent years as a result of the transition to a market economy, making local rural development a serious issue.
Because of this, JBIC has been providing loans to support improvements to elements of the socioeconomic infrastructure, including electricity and transportation systems, rural development that helps to bridge the gaps between regions and alleviate poverty, and the creation of the institutions and human resources needed to fully transition to a market economy.

(2) Special Yen (ODA) Loan - JBIC Provided Two Projects as the First Special Yen (ODA) Loan

a) Established in December 1998, Special Yen (ODA) Loans have been offered to Vietnam to provide a more flexible loan than for regular projects. Intended to facilitate the early recovery of the Asian countries that have been affected by the economic crisis, this system's primary aim is to help achieve economic structure reform by promoting projects that help stimulate the economy and create job opportunities, as well as by creating a desirable business environment for private investment and increasing productivity.

b) In this case both of the projects that the Special Yen (ODA) Loan will be applied to the Binh Bridge Construction Project and the Hai Phong Port Rehabilitation Project (II) were planned to be constructed in the city of Hai Phong. The city of Hai Phong has Hai Phong Port, the largest international port in northern Vietnam boasting the nation's second largest cargo handling capacity. As the third largest city in Vietnam, Hai Phong is the portal to the sea for the northern Red River region that includes Hanoi. The Hai Phong Port Rehabilitation Project (II) aims to upgrade the port so that it can handle container ships and other large vessels that carry larger cargo quantities. The Binh Bridge Construction Project will build a bridge over the Cam River that runs through Hai Phong, thereby replacing existing ferry service, improving transportation within the city, and helping to improve transportation and distribution efficiency in the city as well as in the northern region of the country. Both projects will help improve transportation in the northern region, and are urgently needed and timely projects that are to be carried out quickly in order to aid the economic recovery of the Vietnamese economy.

(3) ODA Loan Package (Project) in FY 1999 - Six Projects in Transportation Sector Totaling 60 Billion Yen

a) ODA loan package (project) in FY1999 will support the traditionally important sector of transportation by providing loans for trunk roads, city roads, and bridge repairs. ODA loans will also be used to install wireless equipment and develop human resources as a means of preventing shipping accidents, and to refurbish broadcasting equipment used to transmit information and to spread technologies and education all over the country. All of these plans have been given top priority by the government of Vietnam.

b) The Saigon East-West Highway Construction Project (I) is intended to improve the transportation infrastructure of Ho Chi Minh City, Vietnam's largest city and the heart of its economy. This is the first time ODA loan is being provided for a project in that city.

(4) JBIC is the Largest Donor to Vietnam in FY 1999

2. Project Descriptions

(1) Special Yen (ODA) Loan

i) Binh Bridge Construction Project
Hai Phong is the third largest city in Vietnam following Ho Chi Minh City and Hanoi, and is central to the distribution and transportation system of northern Vietnam by virtue of its port, which serves as an international gateway to the north. The city has grown up around the southern Cam River which flows through it, but the northern region, for which the city's development plans include the construction of a new downtown area by 2010, is currently divided by the Cam River, and transportation developments to reinforce the ferry river crossing systems have been late in coming. Ferry transportation volumes have been increasing annually, and the system is approaching the limits of its capacity. For example, waiting times as long as one hour are not uncommon at the Binh ferry near Hai Phong Port, and traffic congestion is thus worsening.

This project will construct a new 1,300m bridge across the Cam River and will improve related facilities such as access roads. The construction of this bridge is expected to improve traffic conditions in Hai Phong and to contribute to development in the city and the surrounding areas.

The proceeds of the loan will be used for the civil works of the bridge construction, and for procuring materials and consulting services (detailed designs, bid evalutations, construction supervision).

The executing agency is the Hai Phong People's Committee, (Address:18 Hong Dieu, Hai Phong, Vietnam, Tel: 8431-842329, Fax: 8431-842368).

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ii) Hai Phong Port Rehabilitation Project (II)
Hai Phong Port is the largest international port in northern Vietnam, and has the nation's the second largest cargo handling capacity next to Saigon Port in the south. Given that it is connected to Hanoi via National Highway No. 5, also improved with an JBIC's ODA loan, this port is center of the distribution and transport system in the northern region. Nonetheless, because the port is located at the mouth of a river, the size of vessels that can enter the port is limited due to alluvial fill blocking the shipping lanes. Today the port's functions are severely limited, as it can only accommodate vessels of a maximum 3,000 DWT. In addition, the facilities at the port are deteriorating, and are getting to the point where they cannot keep up with recent increases in container cargo volumes. Because the delay in refurbishing this port, one of the central nodes in the northern distribution system, has gradually come to be a bottleneck in the economic development of northern Vietnam, urgent improvements are needed.

This project will improve the port's cargo handling capacity and make it possible to meet the rising cargo demands that have resulted from the nation's economic growth. It will achieve this by constructing port facilities that can accommodate container ships and by making improvements that will allow larger vessels to enter the shipping lanes, currently the greatest obstacle to capacity increases. Hai Phong Port Rehabilitation Project (I) which aimed to expand the port's facilities was provided in ODA loan package in FY1993. As the second phase of that project, this project aims to revitalize the economy by increasing the efficiency of the distribution system in the northern region and by improving the investment environment.

The proceeds of the loan will be used for civil works and for procuring materials and consulting services (detailed designs, bid evaluations, construction supervision).

The executing agency is the Ministry of Transport (Hai Phong Port Project Management Unit), No.4 Hoang Dieu Street, Hai Phong City, Vietnam, Tel: 84-31-859845, Fax: 84-31-823679.

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(2) Annual Project Loan

1) National Highway No. 10 Improvement Project (II)
Most of the road network in northern Vietnam was built before 1954, and in the south there are few roads that were built after 1970. Consequently, national highways and local roads alike are in a state of disrepair, and are facing further deterioration. Also, because the nation is highly dependent on its roads for transporting cargo and passengers and because its traffic volumes have been increasing in recent years, the state of the existing roads continues to worsen.

Starting at Bi Cho along National Highway No. 18, National Highway No. 10 is a 150km highway in northern Vietnam that passes through Quang Ninh Province, Hai Phong, the city where Vietnam's international Hai Phong Port is located, and the Red River delta region, and extends to the Nin Binh, a major city in the southern part of the Red River delta. It is an important road in terms of planning the agricultural and industrial development of the entire northern region. However, because it is in very poor condition and has surface defects and deteriorated bridge piers, it is plagued with frequent traffic flow problems and has many sections that lack enough breadth and shoulder area for vehicles and pedestrians. Traffic in some areas is especially congested because the rivers and port have to be crossed by ferry.

This project will improve the existing roads and rebuild bridge piers, thereby improving access to markets in the northern coastal regions which, cut off by tributaries of the Red River, have experienced relatively slow development. In addition, it aims to help develop the whole region downstream of the Red River delta and to raise incomes there. This is the second loan for the National Highway No. 10 Improvement Project, for which the first loan was funded by an ODA loan in FY 1997.

The proceeds of the loan will be used for civil works for constructing roads and bridge piers, and for procuring materials and other resources.

The executing agency is the Ministry of Transport, 80 Tran Hung Dao, Hanoi, Vietnam, Tel: 844-8254012, Fax: 844-8267291.

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2) National Highway No. 18 Improvement Project (II)
Most of the road network in northern Vietnam was built before 1954, and even in the south there are few roads that were built after 1970. Consequently, national highways and local roads alike are in a state of disrepair, and are facing further deterioration. Also, because the nation is highly dependent on its roads for transporting cargo and passengers and because its traffic volumes have been increasing in recent years, the state of the existing roads continues to worsen.

Starting at Hanoi Port in the nation's capital, National Highway No. 18 is a 320km highway in northern Vietnam that cuts across the northern part of the Red River delta, passes through the city of Ha Long in Quang Ninh Province, a popular tourist destination that is home to picturesque Ha Long Bay, and ends at the Chinese border in Bac Lang. It is an important road in terms of planning the agricultural and industrial development of the entire northern region. However, it is in very poor condition and has road surface defects and deteriorated bridge piers. Traffic in some areas is especially congested because the rivers and port have to be crossed by ferry.

This project will upgrade major sections of this highway between Noi Bai and Chi Linh (about 70km) and between Bieu Nghi and Qua Ong (about 65km) by improving the existing roads and replacing and constructing new bridge piers. By ensuring an efficient road network in northern Vietnam and contributing to smoother distribution flows, this project aims to promote development plans in the northern region, including the coastal portions of this highway where various industries have long flourished. This is the second loan for the National Highway No. 18 Improvement Project, for which the first loan was funded by a FY 1997 ODA loan.

The proceeds of the loan will be used for civil works for constructing roads and bridge piers, and for procuring materials and other resources.

The executing agency is the Ministry of Transport, 80 Tran Hung Dao, Hanoi, Vietnam, Tel: 844-8254012, Fax: 844-8267291.

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3) Red River Bridge Construction Project (I)
There are currently only 3 bridges across the Red River that runs through Hanoi, the capital of Vietnam, and these are unable to keep up with increased traffic volumes into Hanoi from the south and from Hai Phong in the north via National Routes No. 1 and No. 5. Because many industrial complexes are either being developed or are under construction in the areas surrounding Hanoi, traffic volumes into and out of Hanoi are only going to rise, thus raising concerns that traffic congestion is going to worsen even more due to the insufficiency of current bridge capacities. Also, because there are no city bypass highways, traffic converges in the city center, aggravating in-city traffic conditions.

To eliminate this traffic bottleneck in Hanoi, the need for a new bridge across the Red River and for the construction of city bypass roads urgently needs to be addressed.

This project, including the construction of a new bridge across the Red River in Hanoi, will improve the southern portion of the Hanoi City Ring Road No. 3 that encircles downtown Hanoi. By building a road that serves as a bypass connecting National Highways No. 1 and 5 without passing through downtown Hanoi, this project aims to eliminate the traffic bottleneck in the city, alleviate traffic congestion in the city center, improve the distribution system, and contribute to the efficiency of the distribution system in the northern region.

A feasibility study (F/S) on this project was conducted by JICA in 1998, and detailed designs (D/D) are being implemented by JICA as well.

The proceeds of the loan will be used for civil works and for procuring materials and consulting services (assistance with bid evaluations, construction supervision).

The executing agency is the Ministry of Transport, 80 Tran Hung Dao, Hanoi, Vietnam, Tel: 844-8254012, Fax: 844-8267291.

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4) Vietnam Television Center Project
In addition to economic, social, and cultural differences between southern and northern Vietnam and the existence of a small number of ethnic minorities living in the mountain areas which make up about 10% of the population, movements of people and the inflow of information from foreign countries has been limited in recent years. While Vietnam boasts a high literacy rate of 90%, there are concerns that levels of education and knowledge are declining, and that there is a shortage of the human resources needed for a market economy to function. Also, while the market economy has been growing and social changes have drastically happened in recent years, increase of problems involving narcotics, AIDS, and moral decline has occurred.

Thus, since television broadcasts can offer necessary and timely information on education, technology, the state of the nation and the world, and government projects to all the citizens, including the ethnic minorities inhabiting the outlying areas and mountainous regions, improvements to those broadcasts are recognized as being the most effective and efficient means of contributing to human resource development and reinforcing educative activities. It is of great importance that the Vietnamese government work to make quantitative and qualitative improvements to television broadcasts by providing technological assistance to the construction of a television broadcasting center and the creation of television programs.

This project will build a broadcasting center (studios, program creation and broadcasting facilities and equipment) to expand the television broadcasting hours in Vietnam and to increase program creation capabilities. In addition to meeting the informational needs of the Vietnamese, this project aims to raise the levels of education and knowledge by spreading the latest technological and scientific information and providing equal opportunity access to instruction and education in the fields of health and medicine. JBIC has already provided a loan for the first step in this project in fiscal 1997, the procurement of engineering services involving the detailed design of the broadcasting center.

The proceeds of the loan will be used for civil works for constructing the television center, and for procuring materials and consulting services (assistance with bidding, construction supervision, etc.).

The executing agency is Vietnam Television, 43 Nguyen Chi Thanh Street, Ba Dinh District, Hanoi, Vietnam, Tel: 844-8316946, Fax: 844-8344559.

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5) Coastal Communication System Project in Southern Vietnam
Because Vietnam's coastline stretches 3,200km from north to south, it plays a major role in the maritime transportation arm of the nation's distribution system. Also, because Vietnam occupies a strategic position in East Asia's maritime transportation network, maintaining the safety of vessels that travel along its coast is a matter of great importance.

In the past, the search-and-rescue system for maritime shipping has been based on a system of mutual aid between vessels. A distressed vessel would send a distress signal or warning and the vessel that received that signal would undertake search and rescue efforts. However, amendments made to the International Convention for the Safety of Life at Sea (SOLAS) in 1988 introduced the use of a new rescue communications system known as GMDSS.* The International Maritime Organization has required all parties to the SOLAS treaty including Vietnam to introduce the GMDSS system, but because Vietnam has not sufficient equipment for receiving emergency signals. As a party to the convention treaty, Vietnam therefore devised a plan for upgrading its coastal wireless communications centers such that the GMDSS system could be introduced. That plan was approved in1996.

This project will upgrade the communications equipment (wireless and satellite communications equipment) of coastal communications centers south of Da Nang so that the GMDSS system can be adopted. These upgrades will make it possible for safety information to be provided to vessels along the entire coast of Vietnam and for distressed vessels to make contact with nearby vessels and land-based rescue centers. By improving the safety of maritime vessel travel, the project aims to help make maritime transportation more efficient.

In FY 1996 ODA funds were provided for a Coastal Communication System Project in Northern Vietnam which targeted northern coastal areas.

The proceeds of the loan will be used for purchasing and installing equipment, and for consulting services. The executing agency is the Ministry of Transport (Vietnam National Maritime Bureau), 7A Lang Ha Str. Ba Dinh Dist., Hanoi, Vietnam, Tel: 84-4-8561372, Fax: 84-4-8350729.

Global Maritime Distress and Safety System ( GMDSS )

  • * GMDSS (Global Maritime Distress and Safety System) uses the latest satellite and digital communications technologies to provide travel safety information to vessels traveling along the coast. It makes it possible for vessels in distress, no matter where they are on the world's seas, to quickly and accurately send a distress call to land-based search-and-rescue centers and to nearby vessels.(back)

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6) Saigon East-West Highway Construction Project (I)

Ho Chi Minh City is Vietnam's largest city with a population of 5.1 million. It is the industrial, commercial, and financial center of the nation, and recent repid economic development and population increases there have been accompanied by the disorderly expansion of the downtown areas and the rapid development of motorization. The ensuing aggravation of urban problems such as overcrowding, chronic traffic congestion, related environmental damage such as air and noise pollution, and an increase in traffic accidents is making it urgently necessary to improve the transportation infrastructure based on an urban development plan that includes such measures as widening and repairing main downtown thoroughfares and building new roads.

By constructing a Saigon tunnel beneath the Saigon River and constructing trunk roads, this project will improve the east-west traffic in the city which is divided by the Saigon River, and will contribute to the urban development of the late-developing eastern shore of that river. Also, enhancing the infrastructure of residential migration destinations will promote the smooth relocation of the people needed for this project, and will help improve the city's urban and living environments.

Special Assistance for Project Formation (SAPROF) study was carried out for this project from January to September 1999 for formulating the project plan as well as resettlement and compensation plans.

The proceeds of the loan will be used for civil engineering pertaining to the infrastructural improvement of residential migration destinations, and for procuring materials and consulting services.

The executing agency is the People's Committee of Ho Chi Minh City, 86 Le Thanh Ton, District 1, Ho Chi Minh City, Vietnam Tel/Fax: 84-8-9320517.

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