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Viet Nam’s Expressway to Everywhere

Project Result / Case Study | 27 August 2015

From the roadside cafes to the upscale resorts, a journey down Viet Nam’s longest highway illustrates the widespread impact of a single new road.

A trip down Viet Nam’s longest expressway, the Noi Bai-Lao Cai highway, which opened in September 2014, tells the story of how much impact one road can have on a country’s economic fortunes. This brand new toll road links the capital Ha Noi to the Chinese border at Lao Cai, 244 km to the northwest, slashing the journey time from seven hours to just three.

North to the border

Leaving the suburbs of Ha Noi behind, a comfortable cruise on 100 km on pristine tarmac and the road takes travelers to Yen Bai, the first major city north of the capital and halfway to the border. It’s mid-morning at the Ninh Cong restaurant on the city’s outskirts and already multiple groups of travelers sit cross legged around steaming hot pots of pork and vegetables. The eatery’s makeshift car park is full, so young boys scurry around directing drivers to park elsewhere.

Owner Nguyen Tien Cong said business had been brisk in 2015, above the clatter of plates and din of early lunchtime conversation. “We’re not even close to the new road, but since last year I can say that business has increased by around 20%. “There are so many more people coming by car and bus now.”

The highway itself, including power, communications and toll booths, was eight years in the making, with the Asian Development Bank (ADB) contributing financing of over $1 billion. As the number of Vietnamese able to afford a car and the hunger for Chinese goods increases, it seems the new road couldn’t have been opened soon enough.

Do Minh Thuan of Yen Bai Province Department of Transport said the number of vehicles using the expressway has leapt by more than 100% to more than 19,000 a day compared with a year ago. “This is remarkable when you think the road has only been open a few months,” he said.

The department has also noted a 60% reduction in road-related accidents in the first half of 2015 compared to the same period in 2014. “The main hospital in Yen Bai is now less busy,” Mr. Thuan laughed.

Trade highway

Back in the car and the border with People’s Republic of China approaches 135 km later at the town of Lao Cai. The road’s impact on trade and travel across the frontier is obvious. New hotels, cafes, and shops heaving with goods from across the border, have sprung up in the town.

Companies in Lao Cai have been quick to capitalize on the potential that the new road offers. Beside a row of factory fresh luxury buses, Le Dinh Dung, a director of Ha Son Transport Travel, explains how he’s just invested in ten new vehicles to take advantage of huge demand from travellers on the Ha Noi to Lao Cai route now there’s a proper highway.

"Of course we are growing bigger. I now employ 140 people and we have not stopped hiring."

Le Dinh Dung, director of Ha Son Transport Travel

“Of course we are growing bigger,” he says, as he shows off the facilities at his ambitious new bus terminal. “I now employ 140 people and we have not stopped hiring,” he added, pointing to a building under construction next to the terminal that will soon be a hotel.

The last stop on the road is the border gate, where long lines of vehicles wait to cross. Most drivers appear relaxed and smiling. New computerized facilities at the border mean delays are uncommon. By March 2015 Lao Cai Department of Transport was seeing a rise in cross border traffic to PRC of at least 15% per month and at least a 30% increase in cars and trucks entering Viet Nam from PRC.

“The road is a vital conduit for trade between Viet Nam and the PRC and is already supporting economic growth and employment in the northern areas of Viet Nam,” said Yasushi Tanaka, Principal Transport Specialist in ADB’s Southeast Asia Department.

Boost to tourism

A key part of that economic growth is in tourism. The road is part of the range of modern facilities being provided for the rising number of visitors to the breathtaking mountains of this part of Viet Nam. The highway means access to coveted hill resorts such as Sapa, close to the Chinese border, is now considerably easier.

Picturesque Sapa’s main square is buzzing with visitors, many from Kunming, provincial capital of neighboring Yunnan province in PRC. Between frequent phone calls, Tran Viet Cuong, director of a leading Sapa travel company, said business was clearly on the up. “I’m having problems recruiting enough English- and Chinese-speaking tour guides to keep up with demand,” he said. ”Now we have a great road to Ha Noi and a great road to Kunming in China where seven million people live, so suddenly we have so many new tourists coming from both cities.”