ADB approves loans of over $1.1 bln for city subway

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The Asian Development Bank has approved loans of more than US$1.1 billion to help build two subways in Ho Chi Minh City, the bank said Tuesday.

 

The bank will lend $540 million to the city's second metro line that will run 11.3 kilometers from the city center to Tan Son Nhat International Airport.

 

It will include 9.3 kilometers underground and 2 kilometers on the ground surface. Total investment for this project is estimated at $1.4 billion.

 

Earlier this month, the European Investment Bank signed an agreement to lend 150 million euros ($201.4 million) to the city's second metro line which is expected to start running in 2018.

 

KfW Bankengrupe has also approved a loan of $313 million for the project, and the Vietnamese government will pay the rest.

 

The ADB will also provide a $636 million loan to the city's third metro line worth $1.6 billion.

 

This line runs 57 kilometers to the south of the city, connecting the provinces of Long An and Dong Nai.

 

The line aims to reduce the traffic flow in the city's downtown area and ease cargo transport between its major ports.

 

The Japanese government is expected to support the third line with $635 million and the Vietnamese government will raise the remaining amount.

 

Work on the city's first metro line began in August at a cost of $1.25 billion, using development assistance from three foreign banks plus domestic funds.

 

The route is slated to start working in 2016.

 

Once all the subways are put in use, the time for travelling from the east to the west of the city will be cut by 80 percent and traffic accidents will be reduced by ten percent, ADB estimates.

 

The bank said infrastructure in HCMC has reached saturation point even as its population increases from the current nine million to estimated 14 million in 2015.

 

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