The Korea Times reported that the project would be financed through a public private partnership (PPP), with Korean construction firms Lotte Engineering & Construction and Saman forming part of the consortium.

The agreement confirms an MoU signed between the two parties in January last year, which envisaged a $US 3bn tram and metro system in the tourist city.

Seoul Metro and Da Nang City will conduct preliminary feasibility studies for the project and use the results to draw up specific network plans and public-private operation models.

“With a PPP, and the participation from Korean construction firms that are a part of the project's consortium, we will try our best to realise Da Nang's first urban railway system,” says Seoul Metro CEO, Mr Kim Tae-ho. “We hope this signing ceremony can become the foundation for the project.”

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