China Eximbank provides RMB 550 million concessional loan for Vinh-Ho Chi Minh City Railway Signal Modernization Project

On October 31, 2005, China Eximbank and the Vietnam Ministry of Finance signed an RMB 550 million concessional loan agreement for the Vinh-Ho Chi Minh City Railway Signal Modernization Project. According to the Vietnam Ministry of Planning and Investment, the loan's borrowing terms included a 3% interest rate and 15-year repayment period, but the grace period is unknown. The borrower was expected to use the proceeds of the loan to finance an RMB 507 million commercial (EPC) contract between China Railway Sixth Group, Co., Ltd. and Vietnam Railway Corporation (VNR), which was signed on September 27, 2006. The project involved the laying of 1,150 km of fiber optic cable and a 1,577 km specialized coaxial cable between Vinh City and Ho Chi Minh City (along a stretch of the North - South Railway, which is also known as the Đường sắt Bắc Nam). It also involved the installation of electric switchboard, video conferencing, and PC systems at 54 railway stations. The project officially commenced on December 26, 2008. Implementation was subsequently delayed by 7 years due to problems with the EPC contractor, China Railway Sixth Group, Co., Ltd.. As of 2014, work resumed on the project. Then, on December 31, 2019, a Vietnam State Audit was released and it noted that, at the time of the audit, the project was completed, but there were problems with the Vinh City-Ho Chi Minh City signaling system not aligning with other railway signaling systems in the area.

Additional details

1. This project is also known as the Thong Nhat railway signal system for the Hanoi-Dong Dang line Project, the Vinh City-Ho Chi Minh City line Project, the Modernizing Railway Signaling System from Vinh-Ho Chi Minh City Section Project, the Railway signal information modernization of Vinh - Saigon railway Project, and Phase I of the Thong Nhat railway line Project. 2. The Vietnamese project title is Xe lửa VN, hệ thống tín hiệu từ Vinh vào TPHCM or dự án Hiện đại hóa thông tin tín hiệu đường sắt đoạn Vinh – TP.HCM, tuyến đường sắt Bắc – Nam or dựng Dự án Hiện đại hóa thông tin tín hiệu đường sắt đoạn Vinh – TP HCM, tuyến Bắc – Nam VN or Dự án Hiện đại hoá hệ thống thông tin tín hiệu đường sắt đoạn Vinh - thành phố Hồ Chí Minh vào. 3. The Chinese project title is 铁路线荣市至胡志明市段通信信号现代化改造项目 or 建的越南铁路通信信号现代化项目 or 越南荣市—西贡铁路通号现代化项目. 4. The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 5. This China Eximbank loan is not a duplicate of Project #34474. Both capture 2005 concessional loans over RMB 500 million for railway signal projects in Vietnam, but these are actually two separate loans for two distinct projects (see "Aiding Transparency," p. 7). 6. The borrowing terms of the loan are derived from the source titled "Assessing China's Impact on Poverty in the Greater Mekong Subregion." Even though the table on page 199 says the loan is just "50 million yuan", this is probably a type of "550 million yuan." AidData has not identified any evidence for another 50 million RMB loan for this project.

Number of official sources

9

Number of total sources

22