HCMC to replace second metro line consultant

By Gia Minh   June 5, 2021 | 09:00 am GMT+7
HCMC to replace second metro line consultant
Houses on Cach Mang Thang Tam Street are cleared to give space for the metro line No.2, November 2020. Photo by VnExpress/Gia Minh.
HCMC has decided to end cooperation with the primary consultant for metro line No. 2 after failing to reach agreement on renewing an independent consultant contract.

After more than a year of negotiations, the concerned parties – the HCMC Management Authority for Urban Railways (MAUR) and a consortium of three German companies, one Swiss company and a Vietnamese company – could not agree on an appendix to renew an Independent Consultant (IC) Agreement contract.

The Ben Thanh – Tham Luong Metro Line, the second metro line of the city that will run 11 kilometers between districts 1 and 12, had the consortium providing engineering, design and supervision services.

The services, costing nearly 44 million euros ($52.4 million), were funded by a non-refundable grant provided by German state-owned development bank KfW.

The consultant’s services commenced in January 2012, but stopped in October 2018 after disputes broke out over fees for service packages not originally included in the first IC Agreement.

The MAUR had failed to resume the IC agreement since.

The consultancy price tag for the metro line has risen by nearly 29 percent following years of delays, jumping an additional 12.6 million euros ($15.5 million) from the original sum agreed in 2012, the MAUR announced early this year.

The consultancy was demanding extra payment for making adjustments in the design, the investor said.

Now, after failing to reach an agreement after more than a year of negotiations, both sides have decided to end their cooperation.

In March, the HCMC administration had "severely criticized" the MAUR for failing to renew the IC contract in time for the project to proceed.

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

Now the MAUR will organize a tender to find a new consultant to cover the rest of the work on the metro line.

Approved 10 years ago, HCMC's metro line No.2 had an original price tag of $1.3 billion, which had then ballooned to $2.1 billion by the end of 2019 over rising material and construction costs.

Three international development banks, ADB, KfW and EIB, are funding the project with nearly VND37 trillion ($1.6 billion), and Vietnam is to contribute the remaining sum as counterpart funds.

The route is one of eight metro lines planned in the city with a combined length of 220 kilometers and a price tag of nearly $25 billion.

Disagreements over compensation have repeatedly delayed land acquisition, causing the project to be rescheduled several times.

 
 
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