The Asian Development Bank said Tuesday (March 29) it had approved a US$293 million loan to help build a metro rail line in traffic-clogged Hanoi, following a similar agreement to fund a Ho Chi Minh City line.

The two cities face major congestion problems, with foreign business leaders repeatedly saying that the country must improve its transportation and other infrastructure in order to secure future growth and investment.

"If Hanoi doesn’t develop quality, high-volume public transportation systems the city will slowly grind to a standstill over the next decade," Robert Valkovic, an Asian Development Bank (ADB) transport specialist, said in a statement. "The metro is essential to Hanoi’s future."

Most of Hanoi’s six million residents get around on motorbikes but the Manila-based ADB says an increasing number are switching to cars in the fast-growing economy.

The rapid-transit link, the capital’s first, is expected to be finished by 2015, stretching 12.5 kilometers (eight miles) and carrying more than 150,000 people daily.

It will connect the city’s main railway station in crowded, older Hoan Kiem District with the Tu Liem neighborhood being developed as a modern business center in the city’s west.

The $1 billion project is also being funded by France and the European Union.

HCMC, Vietnam’s major metropolis in the south, is also developing a $1.4 billion metro to ease its traffic problems, with the ADB providing $540 million in loans.