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Hanoi metro contractor demands $115 mln compensation for project delays

By Vo Hai   October 29, 2021 | 08:48 am PT
Hanoi metro contractor demands $115 mln compensation for project delays
The trains for the Hanoi’s second metro route in Nhon depot. Photo by VnExpress/Giang Huy
Hyundai E&C-Ghella (HGU), main contractor for Hanoi’s second metro route, has stopped construction of its underground section, demanding $114.7 million in compensation for losses caused by repeated delays.

The demand was confirmed Friday by the Hanoi Metropolitan Railway Management Board (MRB).

Citing losses caused by delays in site clearance as well as the city’s approval of compensation policy for affected households, HGU has asked MRB for $114.7 million in compensation. It has also said that will not be able to continue the current work and will seek international arbitration if the payment is not made.

In fact, work had already been suspended in June since site clearance was not complete.

Le Trung Hieu, deputy head of MRB, said they were discussing the issue with the contractor to reach an accurate assessment of the actual damage caused.

MRB officials have admitted that the project was lagging far behind schedule. The project was supposed to be completed in 2018 originally, but changed later to December 2022.

City authorities are considering setting up a committee to handle complaints and solve issues of concern for contractors.

This is not the first time that the construction of the metro has been affected by the delay in handing over a clear site to the contractor.

In July 2020, Dealim Korea Co., Ltd., the constructor of the elevated section requested an additional VND400 billion VND ($19 million). The contractor had said that the clear site was handed to them 1.5 years later agreed to in the contract, leading to a two-year extension of construction process. In that case, the MRB and the Hanoi People's Committee had negotiated a payment of $6.6 million.

The Nhon–Hanoi Railway Station route runs 12.5 kilometers from Nhon in the western district of Nam Tu Liem, via Kim Ma Street to the Hanoi Railway Station downtown. The route runs 8.5 kilometers on elevated tracks and the remaining four kilometers underground with four stations. Work on the project began in 2010.

 
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