Ho Chi Minh City effectively uses ODA funding

The East-West Avenue

Transport infrastructure projects are often financed by the state budget, ODA and private investment resources. However, the funding for the city’s infrastructure development from the state budget has just accounted for about five percent of the country’s total, although the city annually contributes about 20 percent of the gross domestic product (GDP) and 30 percent of the state budget. So, finding financial resources for local infrastructure development, especially ODA funding, has been one of the city’s targets.

ODA left an impression in the 1990s through the improvement of the Nhieu Loc-Thi Nghe Canal basin. In the early 1990s, Ho Chi Minh City’s authorities were determined to clear the slums along the Nhieu Loc-Thi Nghe Canal, which had formed during the 1970s. The fetid canal with thousands of shanty homes was dramatically changed thanks to the project, which received US$200 million in funding from the World Bank for the first phase and is currently under negotiation for an additional US$450 million funding for the second phase.

The second phase of the Tau Hu-Ben Nghe Canal and Doi-Te Canal water improvement project is also being implemented, with a total funding of VND11.28 trillion in ODA loan from the Japanese government and reciprocal city funding. This project will help reduce flooding along these canals.

The East-West Avenue project which has a total initial investment of nearly VND10 trillion, including VND6.39 trillion as ODA loan from the Japan Bank for International Cooperation and the city, has contributed greatly to reducing traffic congestion in urban districts. It is estimated that 40,000 cars and 10,000 motorcycles use the Thu Thiem Tunnel and thousands of motorcycles and cars travel the Vo Van Kiet Road.

The ODA-funded Soai Rap River dredging project has been inaugurated and put into use, which has a total investment of nearly VND2.8 trillion, including US$76 million (equivalent to about VND1.65 trillion) as ODA loan from Belgium and city funds. In the first phase of the project, 54km of the Soai Rap River was dredged at a depth of 9.5m and 160m in width.

The US$146 million Tan Hoa-Lo Gom Canal project to rehabilitate 7.4km of canal and construct 12km of road and 10 bridges, with a total investment of more than US$146 million, including nearly US$129 million as ODA loan funded by the World Bank, has helped improve District 6, District 11, as well as Tan Binh and Tan Phu districts in terms of transport and environment over nearly 19sq.km of the Tan Hoa-Lo Gom Basin.

The city has learnt more experiences from the implementation of these ODA projects, which is regarded as valuable for future ODA project implementation.

By Do Ngoc