Contractor for Hanoi metro demands compensation for land handover delay

The Daelim Industrial Co. Ltd., which is contracted to build the line's elevated section, wants compensation on the grounds that the site for the construction was handed over to it a year and a half later than promised in the contract, Le Trung Hieu, vice chairman of the Hanoi Metropolitan Railway Management Board (MRB), said.

The MRB has not agreed and instead offered to pay $6.6 million to cover the additional expenses caused by the extended construction time, he said.

"The MRB and the consultants have reviewed and negotiated many times with the contractor regarding this issue, and have yet to make the payments as current regulations do not have a detailed guideline for calculating costs incurred when adjusting a contract's duration."

Hieu blamed the delay in handover on the facts that urban railway construction is new in Vietnam and so related procedures and regulations are incomplete.

The sites were in multiple districts and wards, and local authorities and residents failed to reach agreement in some places. There were also instances of land owners refusing to accept the compensation offered and demanding more, causing the process to be delayed, he explained.

Policies related to land, planning and land compensation changed frequently, causing the MRB to face numerous difficulties, he added.

The Nhon-Hanoi Railway Station route, the second metro line after Cat Linh-Ha Dong, runs 12.5 kilometers from Nhon in the western district of Nam Tu Liem through Kim Ma Street to the city railway station in the downtown area.

It will run 8.5 kilometers on elevated tracks and the remaining four kilometers underground.

Construction was 63 percent complete as of last month, with the elevated section being 76 percent complete.

The second metro line for the capital city carries a total investment of VND33 trillion ($1.42 billion), sourced mainly from official development assistance (ODA).