The Japan Bank for International Cooperation would provide $904.7 million and the municipal government $186.6 million, the city people's committee said in a statement.

Construction of the 19.7 km (12 mile) track linking Vietnam's largest city and the neighboring province of Binh Duong, known as the Ben Thanh – Suoi Tien route, was expected to start later this year or early in 2008 and finish in 2013, city transport officials said.

The statement did not say which companies would build the subway and supply rolling stock and equipment.

The route will start near Ben Thanh market, a popular tourist spot in the center of the city of 8 million people, run underground for 2.6 km past the Opera House, and then cross the Saigon River on an elevated track.

Japan’s Sumitomo Corp recently expressed interest in supplying equipment and building the system under a build-transfer form.

Other offers

Besides the Ben Thanh – Suoi Tien route, the city is also working with Germany's Siemens AG to lobby for a soft loan from the German government for two more subway routes running a total length of 20 km.

China Shanghai Corporation for Foreign Economic and Technological Cooperation (Sfeco) recently did a pre-feasibility study for a 12 km fourth route between Go Vap district and district 4.

It would hand in the final feasibility report by next February.

It had also pledged to help obtain official development assistance funds from the Chinese government.

The city’s transport development master plan to 2020 envisages developing three monorail lines with a total length of 37 km and six subway routes with a total length of 107 km.

Reported by M.Vong – Compiled by Dong Ha