MANILA, PHILIPPINES - The Republic of Korea, Australia and Asian Development Bank (ADB) are providing $165.5 million in loans and grants to Cambodia and Viet Nam to rehabilitate transport infrastructure to promote cross-border trade and support economic development in the Greater Mekong Subregion.
ADB will provide a $7 million loan to Cambodia and a $75 million loan to Viet Nam to help fund the Greater Mekong Subregion Southern Coastal Corridor Project. The Republic of Korea will extend a $50 million loan to Viet Nam through the Economic Development Cooperation Fund, which provides official development assistance to developing countries. Australia will extend grants of $8 million to Cambodia and $25.5 million to Viet Nam.
Cambodia will provide $3.7 million and Viet Nam will contribute $58.2 million to complete funding for the project.
"Cooperation in the transport sector has been given a high priority in the Greater Mekong Subregion because the poor state of transport infrastructure is a major constraint to economic growth, trade and other forms of cooperation," said Paul Vallely, senior transport specialist of ADB's Southeast Asia Department.
The Greater Mekong Subregion is composed of countries sharing the Mekong River - Cambodia, People's Republic of China, Lao People's Democratic Republic, Myanmar, Thailand and Viet Nam.
The Southern Coastal Corridor runs for 924 kilometers along the Gulf of Thailand coast from Bangkok through Cambodia and ends at Nam Cam in the south of Viet Nam. The project specifically involves the rehabilitation of 15 kilometers of national road in Cambodia that links to the border of Viet Nam and the improvement of 96.1 kilometers of national highway in Viet Nam, which includes the construction of two bridges across the Cai Be and Cai Lon rivers. New cross-border facilities will also be developed.
The Cambodian section of the project is expected to be completed in June 2012 and the Viet Nam section in December 2014.
While sections of the corridor in Thailand and Cambodia are in good condition, the highway is not complete in Cambodia and much of the section in Viet Nam requires major rehabilitation and improvements.
The project should result in reduced travel times and lower vehicle operating costs along the corridor, which would encourage economic activities, provide employment opportunities and improve access to social services.
The corridor is one of 10 high priority subregional road projects identified to facilitate cross-border trade and support economic development in the Greater Mekong Subregion countries.
The principal mode of transport for goods and people in the Greater Mekong Subregion is by road. The road network in both Cambodia and Viet Nam has developed significantly over the past 10 years, with support from the ADB and other development partners, enabling more efficient movement of goods and people between regions and provinces. However, while much has been achieved in terms of rehabilitation and reconstruction of the road transport system, much still needs to be done. The poor transport connections restrict access to job opportunities, markets, schools and health facilities.