HCM City metro line falls behind schedule
The first metro project in Ho Chi Minh City may not be completed in 2020 as scheduled due to funding problems.
At the meeting, the deputy head of the HCM City Urban Railway Management Board Hoang Nhu Cuong said VND5trn had been promised for construction of Metro Line 1 but in the end, the city people's committee had to give VND1trn (USD44m) in advance to pay contractors.
The contractors have completed VND2trn (USD88m) worth of work but only VND220bn have been paid due to complications in legal procedures as the total investment still hasn't even been approved by the National Assembly. According to Cuong, they may not be able to complete the metro line in 2020 as scheduled.
"Even the passers-by can see that the progress is becoming slower and slower. This is very dangerous. If one contractor drops out then we'll have to start the whole process of finding a new contractor. This problem has been going on for over a year. We hope the National Assembly will approve of the project," he said.
Vu Hoai Nam, head of the State Treasury said that VND1trn had been allocated for the project but it was supposed to be spent on equipment and other machinery. "We can't use this funding for other purposes," he said.
HCM City’s metro lines are facing various issues with procedures, disbursement, and cost overrun. The city has to pay in advance with their own budget multiple times as the government are slow with the disbursement.
Metro Line 1 gained city approval in 2007 with VND17.40trn (USD766.4m) investment. Approval by the National Assembly was not needed at that time. In 2011, it became a key national project and investment increased to VND47.30trn (USD2.08bn) so it needed the NA approval. After the prime minister allowed HCM City to continue, they signed three loans agreement worth VND31.20trn, of which VND12trn has been disbursed.
The Metro Line 1 is behind schedule
At the meeting, the deputy head of the HCM City Urban Railway Management Board Hoang Nhu Cuong said VND5trn had been promised for construction of Metro Line 1 but in the end, the city people's committee had to give VND1trn (USD44m) in advance to pay contractors.
The contractors have completed VND2trn (USD88m) worth of work but only VND220bn have been paid due to complications in legal procedures as the total investment still hasn't even been approved by the National Assembly. According to Cuong, they may not be able to complete the metro line in 2020 as scheduled.
"Even the passers-by can see that the progress is becoming slower and slower. This is very dangerous. If one contractor drops out then we'll have to start the whole process of finding a new contractor. This problem has been going on for over a year. We hope the National Assembly will approve of the project," he said.
Vu Hoai Nam, head of the State Treasury said that VND1trn had been allocated for the project but it was supposed to be spent on equipment and other machinery. "We can't use this funding for other purposes," he said.
HCM City’s metro lines are facing various issues with procedures, disbursement, and cost overrun. The city has to pay in advance with their own budget multiple times as the government are slow with the disbursement.
Metro Line 1 gained city approval in 2007 with VND17.40trn (USD766.4m) investment. Approval by the National Assembly was not needed at that time. In 2011, it became a key national project and investment increased to VND47.30trn (USD2.08bn) so it needed the NA approval. After the prime minister allowed HCM City to continue, they signed three loans agreement worth VND31.20trn, of which VND12trn has been disbursed.
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