VN to reserve ODA to develop infrastructure

News - Under a Prime Minister’s decision, Vietnam will reserve Official Development Assistance (ODA) funds and concessional loans for the development of infrastructure in the 2011-2015 period.

Under Decision 106 of the Prime Minister, the total amount of ODA funds and concessional loans pledged by donors in this period will be around US$32-34 billion while the figure for disbursed capital is $14-16 billion with 50 percent carried over from projects in the 2006-2010 period.

The average amount of disbursed ODA funds and concessional loans is estimated to reach about $2.8-3.2 billion a year. The disbursement pledges in this period are very important for socio-economic development.

Under the scheme, these loans will be mainly spent on infrastructure projects such as expressways or roads in major economic areas.

Currently, most parts of the North-South Expressway are ODA-funded projects, in which two major projects are the VND8.97-trillion ($431.5 million) Cau Gie-Ninh Binh Expressway and the $1.18-trillion HCMC-Long Thanh-Dau Giay Expressway which will be completed this June and late next year respectively.

The Danang-Quang Ngai Expressway worth $1.4 billion and the Ben Luc-Long Thanh Expressway worth US$1.68 billion are also in need of capital.

Some other projects to get ODA funds include Trung Luong-My Thuan-Can Tho, Ninh Binh-Thanh Hoa and Thanh Hoa-Ha Tinh expressways.

In addition to infrastructure projects, ODA funds and concessional loans will be spent on major public projects which are unlikely to attract private investors or commercial loans. These loans will also be used to encourage private investments in infrastructure transport projects under many different forms such as public-private partnership.

Regarding the capital demand for transport projects in the 2011-2015 period, Deputy Minister of Transport Truong Tan Vien said the transport sector would need at least VND483 trillion ($23.2 billion) for its projects in the next five years.

If enough capital is allocated, the ministry will build and expand 6,000 kilometers of roads and 44.6 kilometers of bridges, and build 150 kilometers of railways, he said.

According to the scheme, the total ODA pledged reached over $31.76 billion in the 2006-2010 period, or 15 percent higher than planned. The disbursed ODA amount was $13.86 billion with transport, telecom and water supply accounting for the highest rate of 36 percent.