Japanese contractor claims $156M for delays to HCMC 1st metro route

By Gia Minh   June 3, 2024 | 11:17 pm PT
Japanese contractor claims $156M for delays to HCMC 1st metro route
A metro train at Long Binh Depot in HCMC's Thu Duc City, May 2024. Photo by VnExpress/Quynh Tran
The Japanese contractor who built HCMC's metro line No.1 has demanded nearly VND4 trillion (US$156.6 million) in compensation for losses incurred due to delays in the project.

Japanese firm Hitachi is the main contractor of the Ben Thanh – Suoi Tien line.

Due to various reasons which caused several delays adding up to 4,124 days, the contractor has sought additional costs for them.

But the line's consultant, NJPT, a consortium led by Japan's Nippon Koei, said Hitachi is entitled to compensation only for 2,161 days.

Under the agreement, delays caused due to the fault of the investor, in this case the city, and due to no fault of the contractor are entitled to compensation.

Hitachi disagreed with the consultant’s verdict and has filed a suit against NJPT at the Vietnam International Arbitration Center, HCMC’s Management Authority for Urban Railways (MAUR), which manages the metro, said in a report it sent to the city on Monday.

Hitachi has assessed its losses at 23.72 billion yen (VND4 trillion).

MAUR said in its report that Hitachi "lacks legal basis" to claim such an amount.

MAUR said the claim by Hitachi does not reflect the delays it caused and must be reassessed.

The project still faces complications related to the training of operational staff and testing processes, and Hitachi should be responsible for some of those complications, it said.

It said the city should petition the government to seek the intervention of Japanese authorities to resolve the issue.

Work on the 19.7-km metro line between HCMC and Thu Duc City began 12 years ago and is more than 98% complete.

It has cost over VND43.7 trillion from official development loans from Japan and government funding.

The delays have been blamed on several factors like paperwork complications, design changes, land clearance problems, and the Covid pandemic.

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