rime Minister Nguyen Tan Dung on Tuesday issued an official document which recommends that the State President approve the ADB loan agreement for the construction of Metro Line 2 in HCM City.

Earlier, the prime minister had authorised the Governor of the State Bank of Viet Nam to sign the loan agreement with a representative of ADB in Viet Nam.

In the agreement, ADB pledged to fund US$40 million in the first phase of the project and the other US$500 million during the 2011-2012 period.

The route broke ground in August last year at Tham Luong Depot. The US$1.3 billion project, which connects Ben Thanh Market and Tham Luong Depot, is also financed by Germany's largest bank-Kreditanstalt Fuer Wiederaufbau and the European Investment Bank.

As planned, the city will put the 19-km route of the first phase of metro 2 into operation by 2016.

The HCM City People's Committee is responsible for implementing the project between 2011 and 2016.

The city government plans to build a $7.5 billion metropolitan rail system with a combined length of 109 kilometres. It will have six lines by 2020, with 84 per cent of the funds expected to be from overseas lenders.

Vietnam news