Japan deepens infrastructure activity

On October 11, just one week before Japanese newly-elected Prime Minister Suga Yoshihide paid an official visit to Vietnam, the Mai Dich-South Thang Long section of Hanoi’s Ring Road No.3, funded by the Japan International Cooperation Agency’s (JICA) official development assistance (ODA), opened to traffic after over two years of construction.

The project aims to construct a high-standard inner-city expressway in the western section, connecting the Mai Dich intersection and the South Thang Long intersection of Ring Road No.3 which runs along the outskirts of the capital city. The 5.4-km section has 4.8km of viaduct.

JICA and the Vietnamese government signed a loan agreement worth ¥20.6 billion ($195.48 million) in 2013 to implement the project.

JICA has a long history of cooperation for the development of Ring Road No.3 in Hanoi. Japanese ODA loans were provided for the Red River Bridge construction project, Hanoi’s city ring road No.3, and the new National Highway No.3, as well as the Regional Road Network scheme.

In 2007, Thanh Tri Bridge connecting to Ring Road No.3 was completed. After that, the northern and southern approaching roads of the bridge opened to traffic respectively in 2009 and 2010. Subsequently, in 2012, a 9km-section connecting the intersection of National Highway No.32 with the northern side of Linh Dam Lake, which is the southwestern section of Ring Road No.3, opened to traffic. In 2014, the section connecting Hanoi and the northern city of Thai Nguyen was also completed.

In 2020, with the opening of the Mai Dich-South Thang Long section, the development of the ring road that can bypass the city centre is completed, helping to reduce traffic congestion for the city centre and to promote logistical efficiency, thus contributing to local economic development.

Under the COVID-19 situation, the Vietnamese government’s policy chose to continue implementing public works while ensuring safety precautions for workers. The continuance of all JICA’s ODA-loan projects, including this one, have sustained employment, thus contributing to support the economy.

Moreover, infrastructure development is also very important for improving the domestic investment environment and attracting foreign direct investment (FDI).

“Vietnam still faces bottlenecks in basic infrastructure. JICA will continue to support Vietnam’s socioeconomic development by implementing transportation infrastructure projects, under the policy of the Japanese government of ‘Partnership for Quality Infrastructure’,” said Shimizu Akira, chief representative of the JICA Vietnam Office.

A big boost

After landing in Hanoi’s Noi Bai International Airport in the afternoon of October 18, Japan’s PM Yoshihide will begin his official visit to Vietnam on Monday and Tuesday. It is expected that the Japanese leader will hold bilateral talks with his counterpart Nguyen Xuan Phuc, while meeting with Party General Secretary, State President Nguyen Phu Trong, and National Assembly Chairwoman Nguyen Thi Kim Ngan. He may also meet with some major Japanese firms with operations in Vietnam.

It is also likely that this visit will see both nations commit to further boost cooperation in many sectors, including infrastructure development, with Japan vowing to extend more support to Vietnam.

“Infrastructure development will continue being a sector of cooperation in the bilateral ties between Vietnam and Japan,” said a senior official from Vietnam’s Ministry of Foreign Affairs.

Infrastructure in Vietnam refers to many sectors, like telecommunications, power, transport, water and sanitation, rural and urban roads, railways, bridges, and seaports.

The Asian Development Bank estimated that Vietnam would need at least $16.7 billion per year on average for the 2015-2025 period to finance its infrastructure development needs. The World Bank forecast up to $25 billion a year, much higher than the average level in 2011-2015.

At a recent meeting between the government and localities, PM Phuc stated that the government will boost the construction of many major infrastructure projects such as the North-South Expressway, Long Thanh International Airport, many highways nationwide, and facilities in the power, water, traffic, and urban development sectors.

“Private investors will be enabled to participate in these projects. This is aimed to boost economic growth and facilitate the attraction of more investment,” he said.

A few months ago, Japan’s Tokyo Metro inked an MoU with Ho Chi Minh City’s Urban Railway Management Unit and Ho Chi Minh City Urban Railway Company No.1, which operates the city’s first metro line between the landmark Ben Thanh Market in District 1 and Suoi Tien Park in District 9.

The deal is aimed to support Vietnam to smoothly operate the city’s urban metro line No.1, scheduled to become operational in 2021. The Japanese side will provide technical assistance and human resources training. Metro line No.1 is 19.7km long and costs VND43.76 trillion ($1.9 billion), using metro carriages manufactured by Japan’s Hitachi Company. Last week, the carriages arrived in Ho Chi Minh City. The metro line boasts 14 stations beginning from Long Binh depot to Ben Thanh area.

Expand public investment

Akira of the JICA Vietnam Office said that accompanying the Vietnamese government’s order to accelerate public investment during the pandemic, JICA “will continue deploying Japanese ODA projects which create employment for Vietnamese engineers and workers, and contribute to national economic recovery.”

“For example, about 2,000 workers are joining the metro line No.1,” he said. “New projects have been inked. Vietnam is lacking basic infrastructure works in many sectors for future development, while high-quality infrastructure development is very important for attracting FDI.” So far, the total Japanese ODA for Vietnam in infrastructure development has mounted to about ¥1.14 trillion ($10.8 billion).

“Many people are vulnerable to the negative impacts of COVID-19. So JICA has also been implementing infrastructure projects in both urban and rural areas which will help reduce the poor-rich gap,” Akira said. “For example, we are deploying a project to upgrade the national road network for the second time, with 98 bridges reconstructed. Though being small, the bridges have facilitated easier travelling and improving locals’ livelihood. We will continue cooperating with the Vietnamese government in carrying out new projects in Vietnam.”

During this visit to Vietnam, PM Yoshihide will also discuss ways with the country’s leaders to boost trade and investment ties. Vietnam has become a priority destination for direct investment under Japan’s Partnership for Quality Infrastructure Initiative.