Completed Development AidData Chinese Aid

China Eximbank provides RMB 530 million concessional loan for Hanoi-Dong Dang, Hanoi-Thai Nguyen, and Hanoi-Lao Cai Railway Signal Modernization Project (Linked to Record ID#85379)

¥22.1K RMB

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Vietnam Ministry of Finance
Country	Viet Nam
Start Date	Oct 31, 2005
End Date	Mar 31, 2032
Duration	9,648 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`34474`

Grant Description

China Eximbank provides RMB 530 million concessional loan for Hanoi-Dong Dang, Hanoi-Thai Nguyen, and Hanoi-Lao Cai Railway Signal Modernization Project In 2003, Vietnamese Deputy Minister of Planning and Investment and the Chinese Ambassador to Vietnam signed a preferential loan framework agreement regarding the Hanoi-Dong Dang, Hanoi-Thai Nguyen, and Hanoi-Lao Cai Railway Signal Modernization Project.

Then, on October 31, 2005, China Eximbank and the Vietnam Ministry of Finance signed an RMB 530 million concessional loan agreement for this railway project.

📋 Loan / Grant Terms

💹 Interest Rate3%

🔁 Repayment Period15 years

The borrower used the loan proceeds to finance two separate EPC contracts: (1) ZTE Corporation and Vietnam Railway Corporation (VNR) signed on November 2, 2005 (VNR-ST-03) and (2) Vietnam’s Railway Management Board and China State Railway Group Company, Ltd. signed on September 25, 2006 (VNR-ST-04).

Then, on October 13, 2013, China Eximbank and the Government of Vietnam signed a supplemental RMB 300 million government concessional loan (GCL) agreement for the Hanoi-Dong Dang, Hanoi-Thai Nguyen, and Hanoi-Lao Cai Railway Signal Modernization Project (see Record ID#85379). Some sources refer to the second GCL as supporting a second phase of the project.

However, it is unclear if the loan proceeds were used to finance a different scope of work or simply address cost overruns under the original EPC contracts (since the original EPC contracts from 2005 and 2006 — VNR-ST-03 and VNR-ST-04 — were revised on October 28, 2013).

This project involved the modernization of railway signals and information systems along the Hanoi-Lao Cai, Hanoi-Dong Dang, and Hanoi-Thai Nguyen railway routes and at Hanoi center (hub). On March 24, 2011, the project officially commenced and it was expected to reach completion by June 30, 2013.

However, implementation was delayed by over 6-years due to issues with the general EPC contractor (ZTE Corporation) and its subcontractor: China Railway Signal & Communication Shanghai Engineering Bureau Group Co., Ltd. (上海工程局集团国际公). As of 2014, work resumed on the project.

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 railway signaling system not aligning with other railway signaling systems in the area.

📋 Staff Comments

This project is also known as Phase 1 of the Hanoi-Dong Dang, Hanoi-Thai Nguyen, and Hanoi-Lao Cai Railway Signal Modernization Project, the Hanoi-Dong Dang, Hanoi-Thai Nguyen, Hanoi-Lao Cai, and Hanoi Hub Railway Signal Modernization Project, and the Three Lines and One Hub Project.
The Vietnamese project title is Mỏ Đồng Lào Cai or dựng Dự án Hiện đại hóa thông tin tín hiệu đường sắt “3 tuyến đầu mối” (Hà Nội – Thái Nguyên; Hà Nội - Đồng Đăng; Hà Nội – Lào Cai).
The Chinese project title is 河内—老街及河内枢纽通讯信号现代化改造工程项目 or 三线一枢”项目 or 对越北铁路项目 or 南北方铁路三线一纽通信信号现代化改造项目.
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.
This China Eximbank loan is not a duplicate of Project #34683. 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).

📚 Sources & References

Viet Nam
China strive for a target of 15 billion USD in trade value
Work starts on modernising northern railway signals
投资35.000亿越盾实施越南北方铁路信号现代化改造项目
越南北方铁路“三线一枢”工程正式开工
中兴通讯参与越南铁路信号现代化建设
中国公司承建越南铁路通信改造工程开工
Vietnam
China strive for $15 bln trade value
Assessing China's Impact on Poverty in the Great Mekong Subregion
Impact of China's Rise on the Mekong Region - Yose Santasombat
投资35.000亿越盾实施越南北方铁路信号现代化改造项目
中国公司承建越南铁路通信改造工程开工
投资35.000亿越盾现代化越南北方铁路信号通信设备
Tiếng thở dài tại 3 dự án tín hiệu đường sắt, 3 dự án tín hiệu đường sắt: Lụt tiến độ nhiều năm, đội vốn hàng nghìn tỷ đồng
Việt Nam mượn của Trung Quốc bao nhiêu?, 14 văn kiện hợp tác Việt Nam - Trung Quốc
Aiding Transparency: What We Can Learn About China ExIm Bank’s Concessional Loans
孙国祥大使出席“三线一枢”项目开工典礼
越南‘三线一枢’咨询监理在越南的担当与收获
中国公司承建越南铁路通信改造工程开工
越北铁路项目部收到表扬信
Dự án “Hiện đại hóa hệ thống thông tin tín hiệu đường sắt các tuyến: Hà Nội-Lào Cai; Hà Nội-Đồng Đăng; Hà Nội-Thái Nguyên và khu đầu mối Hà Nội, giai đoạn 1”:
Hơn 3.500 tỷ đồng hiện đại hóa tín hiệu đường sắt, Điều chỉnh giá hợp đồng xây dựng đối với Đường sắt Việt Nam, giải quyết vướng mắc trong quá trình thực hiện đầu tư tại hai dự án hiện đại hóa thông tin tín hiệu đường sắt
Living next to the giant: The political economy of Vietnam’s relations with China under Doi Moi
China Overseas Development Finance Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.