Travel cost reduced, access to market to be improved for 5 million people in 32 provinces in Vietnam

March 9, 2012

Additional financing of US$ 97 million for a rural transport project also aim to create off-farm economic opportunities and social services for poor rural communities.

Hanoi, March 9, 2012 - The State Bank of Vietnam and the World Bank today signs the Additional Financing for the Third Rural Transport Project, to i) increasing the number of communities connected to new and improved all weather roads access; ii) improving the rural road conditions through better management and maintenance of the network ; and (iii) improving the institutional effectiveness to plan, implement and maintain improvements in the rural transport.

To date, the Third Rural Transport Project has rehabilitated an approximately 2,100 km of roads, and  completed the maintenance of approximately 13,000 kms of district roads and bridges. The improved transport system is expected to benefit up to 5 million people in all 32 participating provinces in central and north Vietnam, including 14 provinces in the mountainous areas.

The Additional Financing of US$ 97 million comes from the International Development Association, the World Bank’s funding resource for low income countries.
As a result of the heavy investments in road network development, Vietnam’s road network has expanded rapidly, from 225,000 km in 1999 to 256,000 km in 2009. This network now includes 196,404 km of rural roads and serves around 75 percent of the entire national population and 90 percent of the nation’s poor who live in rural areas.  Vietnam’s rural road network, although narrow and with limited capacity is properly distributed considering demand and terrain. 

Despite achievements in expanding the rural roads network, the general quality of the rural roads in Vietnam is poor. The overall network is only about 30% paved with the significant share of district and commune roads that remain gravel or unpaved. Moreover, the allocated budget for maintenance only meets 25% of the need. As a result the rural network has been deteriorating quickly due to lack of timely rehabilitation and maintenance. The rural road maintenance budget in Vietnam is low and maintenance being neglected due to shortage of funds. In addition, due to significant growth in personal and heavy vehicles, pavement load demands are increasing while budgets are still focused on new construction rather than maintenance.