The city is the capital of the northern province of Nam Dinh, which neighbours Hanoi.

A project document from the World Bank, which is funding the upgrade, said it is a part of the Northern Delta Transport Development Project, "which aims at enhancing the efficiency, environmental sustainability and safety of transport infrastructure and services through the alleviation of physical and institutional bottlenecks in two major waterway corridors in the Northern Delta Region."

Speaking at the ground breaking ceremony, Deputy Prime Minister Hoang Trung Hai said the project was of great significance in ensuring regional socio-economic development.

He asked the investor and contractors to use the World Bank loan efficiently and implement the project on time.

Deputy Prime Minister Hoang Trung Hai speaking at the ground breaking ceremony

Hai also asked the Ministry of Transport to co-ordinate closely with relevant agencies in tackling problems that come up during the project's implementation.

The Lach Giang Estuary upgrade is also the main part of the US$110 million National Waterway Corridor 3 (Hanoi – Lach Giang) improvement project.

It is expected to facilitate better exploitation of the regional waterway system and improve connectivity of the national waterway network.