HCMC requests government to advance funds for metro project

By Huu Cong   March 8, 2019 | 06:18 am PT
HCMC requests government to advance funds for metro project
Only 62 percent of the Ben Thanh - Suoi Tien metro line was completed by the end of last year, against the targeted 65 percent. Photo by VnExpress/Quynh Tran
HCMC has asked the PM for an advance of $92 million to pay for work done on its first metro line.

HCMC Chairman Nguyen Thanh Phong has informed Prime Minister Nguyen Xuan Phuc that the city needs over VND2.15 trillion ($91.78 million) to pay dues relating to construction of its first metro line, including payment for work already done by Japanese contractor Sumitomo Corporation.

He has explained the request saying the city has previously made advance payments for the project from its own budget, but new regulations require further payments to come from the central government.

If the central government cannot provide the money, Phong has proposed that the central government permits the city to make advance payments from its own budget as it has done thus far.

The chairman pledged that the city will repay the money to the government when it receives funds from the Ministry of Planning and Investment.

The metro project is being built using official development assistance (ODA) from Japan, and the Planning and Investment Ministry is in charge of disbursing the funds.

HCMC’s request was made after the Management Authority for Urban Railways (MAUR), which is managing the project, asked the city Tuesday for a VND39 billion ($1.67 million) advance payment to pay staff salaries.

In November last year, Japanese Ambassador to Vietnam, Umeda Kunio, had said that unpaid bills for contractor Sumitomo Corporation had climbed to $100 million.

The first metro line, Ben Thanh – Suoi Tien, runs 20 kilometers (12.43 miles) through the districts of 1, 2, 9, Binh Thanh, and Thu Duc of HCMC, and Di An District in the neighboring province of Binh Duong.

Work started in August 2012 and the project was expected to be finished in 2017 but financing and staffing challenges have caused repeated delays.

Only 62 percent was completed by the end of last year against a target of 65 percent. HCMC plans to complete 80 percent of the project this year and put it on trial run next year.

The project’s demand to sanction an increase in cost from VND17.4 trillion ($747.6 million) to VND47.3 trillion ($2 billion) was approved in January.

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