Transport leads ODA disbursement
Transport leads ODA disbursement
Sizable transport infrastructure projects in Vietnam have been doing sterling work in terms of official development assistance fund disbursement in the year to date.
After the bidding package A22 under the Ben Luc- Long Thanh expressway project was given to a consortium consisting of Japan’s Samwhan Corporation and Vietnam’s Van Cuong Construction United last week, the project’s developer Vietnam Expressway Corporation (VEC) is in a strong position to fulfill its official development assistance (ODA) capital disbursement target this year. The 57 kilometre long, four-lane motorway costing $1.6 billion began construction in July this year after nearly two years of preparations.
In addition to this package, if donor appraisal work is accelerated, VEC could be in a position to assign at least three bidding packages on construction under the project to contractors before the end of 2014.
“With favourable factors including cleared land, good capital arrangements, and carefully selected contractors, there is a high possibility for this crucial road, which connects southern, western, and eastern regions, to be finalised before the end of 2017,” said VEC general director Mai Tuan Anh.
According to the Ministry of Transport’s (MoT) assessments, after the mammoth $1.47 billion Noi Bai-Lao Cai motorway was recently opened to traffic, most of the Ho Chi Minh-Long Thanh-Dau Giay route were also put into use, ensuring progress targets at the other sizable Danang-Quang Ngai road project. The developer VEC has proven to be a strong engine of growth, accounting for more than 33 per cent of ODA capital disbursement volume within the transport sector.
Apart from these highway projects, construction at other important infrastructure projects such as the Terminal 2 of the Noi Bai International Airport, Nhat Tan Bridge, and Nhat Tan-Noi Bai route are being intensified in order to reach finalisation stages before the end of this year, for the official launch date of January 6, 2015.
Some ODA funded projects which were causing concern for donors have seen remarkable progress, such as the northern delta region’s transport system, the Mekong Delta’s transport infrastructure development, Hanoi’s Cat Linh-Ha Dong sky train line, and the Hanoi-Haiphong motorway. This progress is the result of drastic measures being implemented, such as the replacement of underperforming contractors.
“With enormous capital volumes, once completed, these highway and urban rail line projects will have huge knock-on effects on countrywide economic development,” said Minister of Transport Dinh La Thang.
This partly explains the speedy pace of capital disbursement in the transport sector, despite the usual slackening of towards the year’s end. The MoT achieved an ODA disbursement volume 12 times higher than the proposed level (VND30 trillion or $1.4 billion against VND2.46 trillion or $117 million).
According to the government assessment report at the Vietnam Development Partnership Forum last week, the pace of ODA disbursement in transport, energy, urban development, agriculture and rural development is much better than in other areas.
Specifically, of 39 ODA projects currently in development, 18 projects are viewed as having good disbursement, nine projects have been appraised as fairly good and only eight were viewed as doing a bad job in capital disbursement.
Project performance, however, would have been better if the chronic shortcomings were more effectively tackled, such as the shortage of counterpart capital.
