The Vietnamese government and the Asian Development Bank (ADB) signed in Hanoi Tuesday a loan agreement for 60 million U.S. dollars to help upgrade a rail route between capital Hanoi and northern Lao Cai province bordering China.
The 285-km route, built around 1910, needs rehabilitation, including replacement of worn tracks, construction of new bridges and extension of stations, to meet the increasing demand for railway transport between the two localities as well as between Vietnam's northern Hai Phong port city and China's southern Yunnan province.
"The improvements are required to cope with rapidly increasing trade between Vietnam and China, and to enable international trade from China to be shipped via the container port at Hai Phong," Peter Broch, ADB team leader for the rail project, said at the agreement signing ceremony.
The rail route is an important part of the Greater Mekong Sub- region transport network and an integral part of the Singapore- China's Kunming link, which could be completed by about 2015, he said.
The state-owned Vietnam Railway Corporation is the executing agency for the project with investment of 160 million dollars, which is due for completion in 2012.
Also on Tuesday, ADB and the government inked an agreement for a loan of 20 million dollars for the second phase of a two-part project in Vietnam to foster a business climate more conducive to the growth of small- and medium-sized enterprises.