Dec 14, 2007, 5:55 GMT
Hanoi - The Asian Development Bank announced Friday it had approved a loan of 1.1 billion dollars, its largest ever, to build a superhighway between Hanoi and the town of Lao Cai on the Chinese border.
The highway, to be completed by 2012, will cut travel time for trucks between Hanoi and the southwestern Chinese city of Kunming from three days to less than one, the bank said.
'Traffic along the Ha Noi-Lao Cai corridor is already reaching saturation levels in many areas,' said John Cooney, director of the infrastructure division in ADB's Southeast Asia department. 'Without this new highway, trade and growth would be suppressed.'
The ultimate goal is to link Kunming to its closest port, the Vietnamese city of Haiphong. 'Haiphong is the most direct link,' explained Paul Vallely, head of infrastructure at the ADB's Hanoi office. 'There is a port in Beihai, in Guangxi province, but the route is a bit convoluted.'
China and Vietnam are Asia's two fastest-growing economies, with a trade relationship that rose to over 11 billion dollars in the first 11 months of 2007.
Trade between Lao Cai and the neighboring Chinese town of Hekou increased from 351 million dollars in 2004 to an estimated 700 million dollars this year. That represented some 1 million tons of cargo.
The highway is expected to increase opportunities for freight cargo, as well as for tourist traffic to Vietnam's mountainous northwest and to China's Yunnan province.
Much of the rationale behind the Lao Cai to Hanoi highway lies in trade that is not yet happening, due to inadequate infrastructure, or that cannot be measured because it bypasses formal customs procedures.
At the bridge linking Lao Cai to Hekou, much of the traffic currently consists of people wheeling bicycles or hand carts loaded down with boxes full of consumer electronics.
'At many of these border posts right now, trade is minimal,' said Vallely. 'When you stand there looking at it, there's a hell of a lot going on, but it doesn't appear in the formal statistics.'
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