An elevated section of HCM City’s Ben Thanh – Suoi Tien metro line runs along Hanoi Highway. (Photo: VNA)HCM City (VNA) – Ho Chi Minh City’s authorities have proposed increasingcapitalisation for the city’s first two metro lines as the projects continue toface a capital shortage.
The municipal People’sCommittee has sent a report to the Government on the details of cost overruns.
The metro line No 1 from Ben Thanh in District 1 to Suoi TienTheme Park in District 9 was approved by the city in April 2007 with aninvestment of 17.4 trillion VND (766.4 million USD). At that time, approval bythe National Assembly (NA) was not needed.
After investment costs were re-calculated by consulting agencies, costsincreased to more than 47.300 trillion VND (2.08 billion USD).
The city’s administration attributed the surging costs to pricechanges of materials, minimum wage hikes in the 2006-2009 period, and thedepreciation of the Vietnamese dong and Japanese yen, amongothers.
The PM agreed with the city’s administration to approve theproject adjustments in August 2011. With investments reaching more than 47.3trillion VND, the NA then had to approve the amount.
As proposed by the city’s administration, the PM assigns an agencyto report to the NA on investment adjustments and assists the city in advancingcapital to continue work on metro line No 1.
According to the municipal People’s Committee, the city has signedthree loan agreements worth 31.208 trillion VND, of which 11.929 trillion VNDhas been disbursed.
The project has implemented four bidding packages and hascompleted around 48 percent of the work.
As for metro line No 2, which connects Ben Thanh with Tham Luongin District 12, the municipal People’s Committee approved a design by a localconsulting firm in 2010 with a total investment of 1.37 billion USD.
In 2012, the IC, a consortium from Germany chosen as theinternational consulting firm two years later, revised the detailed design ofthe project with a total investment of 2.1 billion USD.
In 2015, the city government petitioned the PM to adjust theinvestment cost of the metro line No 2 project.
The city’s administration has asked the PM to approve theproject’s investment and implementation adjustments and allow the city toassess and approve project adjustments.
According to the Ministry of Transport, the Ministry of Planningand Investment and the State Bank of Vietnam, metro line No 2 can be approvedby the city authority but comments from the PM are needed beforeimplementation.
Accordingto the Ministry of Construction and Ministry of Finance, the project needs tobe reported to the PM before it is submitted to the NA for approval.-VNA
VNA
