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Press Release

$225 million credit signed to improve road network in Vietnam

Hanoi, May 27, 2004 --The World Bank's Country Director for Vietnam, Mr. Klaus Rohland, and the State Bank of Vietnam Governor, H.E. Le Duc Thuy, today signed an agreement for a credit of US$225 million for the Road Network Improvement Project to assist the Ministry of Transport improve the quality of the national road network in Vietnam. The programmatic project will help maintain and upgrade around 600 km of national roads, as well as medium and heavy maintenance for around 1100 km and hence reduce transport costs and travel times on national roads throughout the country and increase access to markets and jobs for the people in Vietnam.

State Bank of Vietnam Governor Le Duc Thuy said in his remarks at the signing ceremony: "This project once more shows the interest and committment of the World Bank in Vietnam's economic growth and poverty reduction. It responses partly to the need of the transport sector for increasing and ensuring stable funding resources for the upgrading and maintaining roads, as well as strengthening roads management capacity to enhance efficiency in road maintenance."

“Over the last decade, a concerted effort by the Government has been made, with support of the donor community, to reestablish the country’s road transport infrastructure. Success has been achieved in many areas, yet more needs to be done,” said Mr. Klaus Rohland, Director of the World Bank in Vietnam. “In order to facilitate the growing demand for road transport in Vietnam, upgrading roads alone will not be enough. Maintaining roads more effectively is also needed to ensure previous investments are not lost.

“As growth accelerated, road transport has emerged as the dominate transport mode which is largely socialized causing increasing pressure for further road investment and upgrading. The Government’s vision is to address poverty through continued high growth will require a highly efficient and well-managed road sector,” said Mr. Nguyen Viet Tien, Vice Minister of Transport. “The project will help ensuring that the benefits of growth are equitably distributed and sustainable through enhancing mobility and accessibility in the poor and difficult areas."

The Road Network Improvement project addresses the transport sector need to increase and ensure stable and steady funds for road maintenance, strengthen capacity for road maintenance management, and improve the efficiency of road maintenance delivery. The project also encourages the private sector involvement in the road sector.

The project has three components: Network Preservation Program, Network Improvement Program and Road Sector Management and Institutional Building Program.

The Network Preservation Program will support periodic repair of about 1,100 km of national roads in three annual programs in conjunction with Vietnam Road Administration’s medium and heavy repair program. It also includes a pilot program for the use of performance-oriented maintenance contracts. The first annual program will include roads in Thanh Hoa, Dong Nai, Nghe An, Ninh Binh, Ninh Thuan, Hai Duong, Khanh Hoa and Dak Lak.

The Network Improvement Program will finance three annual works programs to rehabilitate and widen about 600 km of national roads in the north of Vietnam, including short bridges. The first annual program will include about 125 km of national roads in Thai Nguyen, Bac Giang, Thanh Hoa, and Nghe An provinces.

The Road Sector Management and Institutional Building Program will assist the Ministry of Transport in strengthening institutional capacity for road sector management and finance by providing technical assistance, equipment, and training.

This is the fourth national highway project in Vietnam to receive development finance from the World Bank.

Basic facts

Project name: Road Network Improvement Project

Total cost: approximately US$305 million

World Bank contribution: approximately US$225 million

Duration: 2004-2008

Implementing agency: Ministry of Transport

Contact: Mr. Nguyen Viet Tien, Vice-Minister
80 Tran Hung Dao street, Hanoi, Vietnam

Telephone: (84-4) 8223608 Fax: (84-4423291)

Vietnam Road Administration
Contact: Mr. Thieu Dang Khoa, Chairman

106 Thai Thinh, Dong Da, Hanoi, Vietnam
Telephone: (84-4) 8571446 Fax: (84-4) 8571440
E-mail: vroada@fpt.vn

Projects Management Unit No. 18 Contact: Mr. Bui Tien Dzung, Director General

So 1 Duong 19-8, Mai Dich, Cau Giay, Hanoi, Vietnam

Telephone: (84-4) 7680062 Fax: (84-4) 7680073
E-mail: pidlpmu18@fpt.vn

Project components: The project consists of three components.

· Network Preservation Program ($122.6 million)

· Network Improvement Program ($170.2 million)

· Road Sector Management and Institutional Building Program ($11.7 million)

For more information on the World Bank in Vietnam, please visit our Web site at www.worldbank.org.vn

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