China Eximbank provides supplemental RMB 300 million government concessional loan for Hanoi-Dong Dang, Hanoi-Thai Nguyen, and Hanoi-Lao Cai Railway Signal Modernization Project (Linked to Record ID#34474)

China Eximbank provides supplemental RMB 300 million government 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 (see Record ID#34474).

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 Vietnam Ministry of Finance 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. The borrowing terms are unknown. Some sources refer to this second GCL as supporting phase two 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.

The 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.