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Vietnam states loans will not exceed 30% of $67 bln cost of rail project

Vietnam will rely largely on state funding to construct a highspeed rail link between its capital and business hub of Ho Chi Minh City at a cost of more than $67 billion, the transport minister said on Wednesday.

Expected to be approved by the National Assembly at the end of this month, the 1,541 km (958-mile) line will be the country's. largest infrastructure project, going functional from 2035.

Loans will not surpass 30% of the total approximated expense,. Nguyen Van Thang told the parliament in Hanoi, adding that the. government had actually not decided whether to take domestic or foreign. loans for the project.

If ODA (main advancement aid) that bears low interest. rates and has no binding conditions, then it's good, Thang. stated. Otherwise, we'll take domestic loans.

Last month the ministry said Vietnam would fund the railway. entirely on its own, a goal some professionals stated may be. unrealistic.

On Wednesday, Thang stated the federal government would arrange $5.6. billion a year over the 12-year building and construction period of the. railway, which will primarily bring travelers, however have an alternative. for cargo after 2050.

Freight transport will be managed mainly by the systems of. waterways, roadways and the existing rail line, he said.

(source: Reuters)