Vietnam secures additional $251 million from China for notorious urban railway project

By Anh Minh   September 14, 2016 | 10:39 am GMT+7
Vietnam secures additional $251 million from China for notorious urban railway project
Part of the Cat Linh-Ha Dong urban railway project in Hanoi. Photo by VnExpress/Ba Do

The Vietnamese Prime Minister  is putting pressure on the Chinese contractor to get the job done.

Vietnam has signed a framework agreement to borrow $250.62 million from China to partly offset the additional capital needed for the delayed Cat Linh-Ha Dong urban railway project in Hanoi.

The deal was inked on Monday during Vietnamese Prime Minister Nguyen Xuan Phuc's first visit to China, which began on September 10 and is expected to wrap up on September 15.

Following the signing, Phuc met with Ma Jiangqian, General Director of China Railway Sixth Group Co. Ltd, the main contractor for the railway project, in Beijing on Tuesday.

The premier asked the contractor to quickly address existing problems to ensure the project's progress.

Construction kicked off in October 2011 and had been originally scheduled for completion in 2013, but several hurdles, including a lack of cooperation from the Chinese contractor, have stalled the project for years.

Phuc said the slow pace of construction has had a negative impact on traffic in Hanoi, and triggered public dissatisfaction. Given the fact that a number of accidents have happened on the project, the Vietnamese premier told the Chinese company to ensure safety on site.

In November 2011, rolls of steel fell from a construction site, killing one person and injuring two others, prompting Vietnam’s Transport Ministry to suspend construction for a safety review.

In response, Ma submitted proposals to help push the project's progress and pledged to complete the basic construction work by the end of this year. He also said the company will strive to begin trial runs in July 2017 and begin commercial operations in September next year.

Vietnam signed a framework agreement to secure official development assistance (ODA) from China for the railway project in 2008.

The project was originally estimated to cost $552 million, $419 million of which would come from Chinese ODA. But in early 2014, the project developer, the Vietnam Railway Authority, proposed adjusting the total investment to $868 million due to delays and spiraling costs.

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