The 5.44-kilometer bridge, set to open in February 2017, will link Haiphong City to Lach Huyen Port, which is being built on Cat Hai Island, the Ministry of Transport said over the weekend.

A new highway is being built from Haiphong City to bustling Hanoi, 110 kilometers to the west, which will speed up cargo being moved by trucks between the new port and Vietnam's capital city.

"The bridge, along with the port, will contribute to the socioeconomic development of not only Haiphong City, but also of the whole northern region of Vietnam," Prime Minister Nguyen Tan Dung said in a statement posted on the government website.

The handling capacity of all seaports in northern Vietnam is below 100 million tons of cargo a year, but demand is expected to increase to between 146 million to 176 million tons a year by 2020, the ministry said.

Lach Huyen Port is expected to handle 35 million-to-50 million tons of cargo a year by 2020.

The Lach Huyen Port, set to open in 2016, will be able to handle large cargo ships that can go directly from Vietnam to Europe and the U.S., making the country's exports more competitive.

The port also can serve as a transit point for exports from Laos, a neighbor to the west, and southern China, to the north of Haiphong City.

Cargo ships from Vietnam usually must travel via Singapore, Kaohsiung and Hong Kong. The reason is that most of the seaports in Vietnam are small and unable to accommodate larger vessels that can cross oceans. As a result, small cargo ships carry goods between Vietnam and the ports that can handle larger ships.

The current port in Haiphong City can accommodate vessels of up to only 20,000 deadweight tons. Lach Huyen Port will be able to accommodate ships of up to 100,000 deadweight tons.

The cost to build the bridge and its approaching roads is estimated at roughly $564 million, of which $478 million is being funded by Japan in the form of low-interest loans, the ministry said. A consortium of Japan's Sumitomo Mitsui Construction, Vietnam's Truong Son Construction Corp. and Civil Engineering Construction Corp. No. 4, won a contract to build the bridge and its approaching roads.

Japan has been one of the largest providers of official development aid, including grants and low-interest rates, to Vietnam over the past decade. Most of the loans go to infrastructure projects, and Japanese companies often have been awarded construction contracts.

According to the transport ministry, Vietnam has completed 18 key transport infrastructure projects using $2.34 billion in grants and soft loans from Japan since the early 1990s.

By Vu Trong Khanh & Nguyen Pham Muoi - The Wall Street Journal - February 17, 2014