HCMC's 2nd metro construction delayed as consultant quits

By Gia Minh June 7, 2022 | 03:24 am PT

Residents in HCMC's Tan Binh District have their houses demolished to give space for the metro line No.2 in 2020. Photo by VnExpress/Huu Khoa

Construction of HCMC's Metro Line No. 2 has been rescheduled to 2025 instead of starting this year as the city needs to find a new consultant.

The project's investor, the Ho Chi Minh City Management Authority for Urban Railways (MAUR), is working on bidding procedures to choose a consultant for the line after the former one quit, the city administration reported to the Ministry of Planning and Investment on Monday.

The former consultant, a consortium of three German companies and a Swiss and Vietnamese firm, ended the independent consultant (IC) agreement contract with the MAUR in March after both sides failed to agree on an appendix for renewal.

As expected, it would take around 12-18 months for the MAUR to find a new consultant while the investor can only invite bids to find construction contractors in 2024 for work to start in 2025 and complete in 2030.

The previous plan said work on the second metro, the Ben Thanh – Tham Luong line that will run 11 kilometers between districts 1 and 12, will start within this year.

That plan had the former consultant provide engineering, design and supervision services. Its fee of 44 million euros ($52.4 million) came out of a non-refundable grant provided by German state-owned development bank KfW.

The former consultant began work in January 2012 but stopped in October 2018 after a dispute over fees for service packages not included in the first IC agreement.

However, MAUR had failed to resume the IC agreement, without providing a specific reason.

It said last year the consultancy had demanded nearly 29 percent, or 12.6 million euros, more than the original sum agreed in 2012.

The two sides held several rounds of negotiations but failed to reach an agreement.

In March last year the city administration "severely criticized" MAUR for failing to renew the IC contract in time for work to proceed.

Such delays have affected the progress of the project, its quality, and the city's prestige, it said.

Line No. 2, approved in 2010, had an original price tag of $1.3 billion, which ballooned to $2.1 billion by the end of 2019 on rising material and construction costs.

Asian Development Bank and European Investment Bank are also funding the project, at nearly VND37 trillion, with the government providing the rest.

The line is one of eight planned in the city with a combined length of 220 kilometers and a cost of nearly $25 billion.

The first is more than 90 percent complete.