The Asian Development Bank (ADB) and Vietnam Thursday signed an agreement for the ADB to provide Vietnam with a technical assistance loan of 6 million U.S. dollars for building up a plan for constructing a highway linking the capital of Hanoi and northern Lao Cai province.

The 260-km planned highway, part of a transport corridor connecting Kunming city of China's Yunnan province to Vietnam's northern Hai Phong city, will link Vietnam's poor and remote northwest region to northern economic centers, and link Yunnan with the two Vietnamese cities, helping promote trade ties between the two countries, ADB acting country director William Costin said at the signing ceremony here Thursday.

"The future highway would reduce travel time between Hanoi and Lao Cai from at least eight hours at present to about three hours, " he noted.

The total cost for the planned highway is estimated at around 620 million dollars, of which ADB and other donors would fund around 430 million dollars. The technical assistance will provide the resources to undertake necessary studies and prepare the investment project.

The total cost of the technical assistance is estimated at about 8 million dollars, of which the Vietnamese government will contribute 2 million dollars. The Vietnamese Transport Ministry is the executing agency for the technical assistance, which is due for completion after two years around March 2008.

The 400-km expressway from Kunming to the border with Vietnam is due for completion in 2008. However, the existing highway on the Vietnam side from the border at Lao Cai to Hanoi is narrow with several low capacity bridges, reducing its potential to meet the projected growth in traffic, according to the ADB Vietnam.

Source: Xinhuas.