Ho Chi Minh City Ramps Up Infrastructure Spending

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HCMC – Ho Chi Minh City (HCMC) has announced that it will require VND17 trillion (US$799 million) for transportation infrastructure development in 2014.

However, according to recent budget reports released by the city, HCMC can only cover a little over VND7 trillion (US$330 million) in funding. The rest of the money will come from official development assistance (ODA) funding (VND2.3 trillion, approximately US$108 million) and from the Asian Development Bank (US$1.2 billion).

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Deputy Director of the Department of Transport, Mr. Bui Xuan Cuong, has stated that the goals for infrastructure development in 2014 include the completion of “urgent” transport projects, such as the building of six new bridges, dredging the Soai Rap river, expanding Ring Road No. 2 and upgrading Highway No. 1.

The city has already succeeded in completing three of the six planned bridges and a fourth will be finished next month. Both the Hau Giang Bridge and Bong Bridge projects were inaugurated last Saturday June 8, 2014 by the HCMC Department of Transport. The Hau Giang Bridge crosses Tan Hoa Lo Gom Canal in District 6, while the Bong Bridge crosses the Nhieu Loc Thi Nghe Canal in District 1. Both bridges are located on major thoroughfares linking the city center to outlying districts.

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The revamped Le Van Sy Bridge was opened to traffic on April 30, 2014 and the Kieu Bridge is scheduled to be completed next month. These four new bridges are constructed to replace the old ones, which were over 50 years old.

The respective costs of these bridges are:

  • Bong Bridge: VND30 billion;
  • Hau Giang Bridge: VND128 billion;
  • Kieu Bridge: VND115 billion;
  • Le Van Sy Bridge: VND100 billion.

Additionally, the city is striving to complete key projects, such as Provincial Road 10B to Long An Province, a section of Tan Son Nhat – Binh Loi – outer ring road, Pham Van Bach Street, an upgrade of Nguyen Thi Thap Street, as well as many subprojects including Thanh Da embankments.

The remaining section of the Tan Son Nhat – Binh Loi – outer ring road project will be in place by the end of 2014, the first five kilometers opened to traffic last September. According to the Department of Transport, the completed road will account for around 40 percent of traffic between HCMC and neighboring Binh Duong Province and help to ease traffic congestion along certain routes in the city. South Korea’s GS Engineering & Construction Corporation started working on this US$340 million project in 2008.

According to the government, the biggest difficulty continues to be capital mobilization for all of the projects – if funds are not generated in time, the work at many of the projects will fall behind schedule.

In order to deal with this potential problem, the HCMC People’s Committee has issued a written document requesting the advance of more than VND100 billion from the state budget for major projects. The Committee has also submitted a written proposal to the Ministry of Planning and Investment seeking US$1.2 billion in funding from the Asian Development Bank (ADB) for the fiscal year 2015-2017.

There are also plans to turn Hiep Phuoc Port area in District 9 into a national seaport center that will be able to be more competitive regionally. HCMC will also take measures to turn the Hiep Phuoc Industrial Park into a port-based special economic zone.

Several important traffic routes around the Hiep Phuoc Port areas are already finished, and HCMC will focus on construction of metro routes, belt roads and highways to meet cargo transport demand from and to the port. The target is 200 to 250 million tons per year of goods transferred via Hiep Phuoc Port by 2020.

Another important project is the dredging of the Soai Rap River, which is now in its final phase. Since May of this year, large vessels weighing up to 30,000 to 54,000 tons are already able to use the river to enter the Saigon Premier Container Terminal (SPCT) in Nha Be District. This project will help reduce the distance from the East Vietnam Sea to HCMC by about 30 kilometers. Expectations are that the remaining work will be completed in June 2014 so that larger vessels weighing up to 60,000 tons can freely travel to SPCT. The project has a total investment of nearly VND2.8 trillion, with Belgium’s ODA loans accounting for over 2 trillion VND and the city’s budget covering the remainder.

Nguyen Le Chon Tam, deputy general director of SPCT, said that operators of a 50,000 deadweight tonnage (DWT) vessel would be able to save over US$500,000 a year if its vessel entered the terminal via the Soai Rap River, which is much wider and allows for navigation at night.

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