Japan will provide about ¥500 billion in financial assistance to help Vietnam undertake two major infrastructure projects seen as key to promoting economic growth in the Southeast Asian nation, the Nikkei reported.
Tokyo will tap its official development assistance funds as well as solicit investment capital from private companies. Japan’s first public-private aid deal for Vietnam comes in the wake of a summit last October in which the governments stressed the importance of mutual cooperation.
The aid will be used toward the construction of Lach Huyen Port in the north and the development of Long Thanh International Airport in the south. Vietnam wants to turn the northern port into a regional shipping hub on a par with Singapore and Bangkok.
Itochu Corp. , Nippon Yusen KK and Mitsui O.S.K. Lines Ltd. will form a joint venture with Vietnam National Shipping Lines (Vinalines) to build the port by 2015. The Japan International Cooperation Agency (JICA) will begin drawing up a detailed construction plan later this month.
Under the public-private partnership, government yen loans will be supplemented with lending from the three firms, which will then be given the right to operate port facilities for an extended period so that they can recoup their investments.
Construction of the port will cost an estimated ¥140 billion, with 120 billion to be covered by yen loans and the remainder shouldered by the Japanese firms.
Long Thanh International Airport is expected to become one of the largest in Southeast Asia, with an annual capacity of 100 million passengers, mostly on international routes, and 5 million metric tons of cargo.
Mitsubishi Corp., Taisei Corp., Japan Airport Consultants Inc. and Narita International Airport Corp. will use JICA funds to conduct a feasibility study later this month, with an eye toward compiling a report within a year. The airport is expected to open around 2016. Building the key facilities, including runways, a control tower and passenger terminals, is expected to cost well over ¥300 billion.
The transport infrastructure is seen as essential to enabling Vietnam to achieve its goal of raising its annual economic growth to about 8% in the near future, up a full percentage point from the current level, and become an industrialized country by 2020.