Plans for a four-lane highway from Hanoi to Kunming (shown here) appear to be moving apace now that the Asian Development Bank has agreed to a loan that will underwrite the Vietnamese side of the project.

The aim is the highway will be completed by 2012 which will give a direct route between northern Vietnam and southern China reducing the journey time from three days to nine hours.

Goods made in China’s Yunnan Province will gain quick access to the Vietnamese seaport of Haiphong, and Vietnamese exporters will be given the opportunity to reach untapped markets in China.

Ayumi Konishi, the Asian Development Bank’s country director in Vietnam, said, ‘Both countries are reaping the fruits of peace and cooperation, In one generation, they have moved from tanks and troops to trade and tourism.’

That neat bit of alliteration at the end does sound like the work of a good PR person.

This is the bank’s biggest single-project loan — $1.1 billion — to finance the 244-kilometer stretch of the highway from Hanoi to Lao Cai on the border with China. The Vietnamese government is contributing $100 million to the low-interest loan, to be paid off over 32 years.

The construction will add a section to the ambitious Asian Highway program under which 27 Asian countries have agreed to build a 140,000-kilometer network of roads that meet minimum uniform standards.

Improved transport connections could entice more investors into Vietnam, where lower wages than in parts of China give workers a competitive edge.

The Vietnamese government has placed a high priority of the development of its northern provinces. The four provinces the highway traverses — Vinh Phuc, Phu Tho, Yen Bai and Lao Cai — have poverty rates as high as 34%, compared with a national average of 20%. The construction of the highway is expected to cut poverty rates significantly.The highway will be a toll road that is expected to generate enough revenue to pay off the loans within a decade after it opens, the ADB said.