Deputy Minister of TransportNguyen Hong Truong just inked a document proposing the State Audit ofVietnam (SAV) carry out a review of an aerial urban railway betweenHanoi’s Cat Linh and Ha Dong areas in December 2013, according toVietnam Investment Review.
The auditing agency hasbeen asked to get involved due to delays of the sky train project andreports that show a considerably higher construction cost thanpreviously estimated.
The key transport project gotapproval from the prime minister as anengineering-procurement-construction (EPC) contract. The project’s keybidding package (package 1) involves design, equipment supply, materialsand construction and was granted to China’s Railway 6th Bureau GroupCompany.
Apart from technical infrastructure, theChinese contractor would also provide 13 trains, each consisting of fourcarriages with a carrying capacity of around 300 passengers per time.
The launching ceremony took place in October 2011 andlocal developer granted the EPC contract, valued at 350 million USD, tothe Chinese side back in May 2009. The document stipulated thatconstruction must not exceed 48 months except for delays caused byuncontrollable factors.
In the four years since, the project timeline has been revised several times, now with a deadline of June 2015.
According to Ministry of Transport (MoT) appraisals, total completedwork by the end of November 2013 was 2.230 trillion VND (106 millionUSD), 28 percent of the project’s total value.
Aswell as construction, it is important to have a business established toconduct management and operations right from the outset, though as ofyet there is no such business, making it difficult to source manpower toeventually work on the train’s operations.
“SAV wasasked to step in to ensure investment procedures are followed and thecontract is adhered to, as well as to ensure there are no lossessustained by the state,” said Truong.
A lack ofexperience and the poor capacity of the developer and Project ManagementUnit overseeing the EPC contract were blamed for the project’s poorperformance.
Head of the Railway Project ManagementUnit Tran Van Luc said that despite its position as a major railwaycontract in China, China Railway 6th Bureau Group has little experiencewith international EPC contracts.
“Consequently,although the EPC agreement rules that the contractor must take charge ofdesign, equipment, and execution, our management unit has had to takepart in nearly every phase of the project,” Luc added.
“The contract and associated consulting unit are too dependent on instructions from the developer.”
According to a source from the MoT, current regulations on managementand execution of EPC contracts lack more specific regulations on theresponsibilities of parties in terms of progress and investment.
Site clearance has been a major problem with the project. At current,there is still an issue with clearing 3km of the 13km main line and 800metres of the 1.5km approach line whereas site clearance was slated tobe finished by February 2010.
“It is hoped the SAVwill identify the problems and help revive progress of this importantproject,” said a source from the MoT.
The Hanoi urban railway line project’s Cat Linh-Ha Dong route is being developed by the Vietnam Railway Administration.
Total investment capital - 8.770 trillion VND (552 million USD), ofwhich 419 million USD is sourced through Chinese loans.
The project envisions building a 13km long aerial tram line with amaximum velocity of 80km per hour per (average speed: 35km/hour).Estimated transport capacity is 28,000 passengers/hour/one direction,with 12 train stations.-VNA
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