Vietnam approves increased funding for Saigon’s long-delayed metro lines

By Huu Cong   January 4, 2019 | 07:46 pm PT
Vietnam approves increased funding for Saigon’s long-delayed metro lines
Part of the half-finished first metro line of Ho Chi Minh City. Photo by VnExpress/Huu Khoa
The central government has approved an upward revision in the cost of Ho Chi Minh City’s first and second subway lines.

The cost of the first one from Ben Thanh to Suoi Tien, running 20 kilometers (12 miles) through Districts 1, 2, 9, Binh Thanh, and Thu Duc and the neighboring Binh Duong Province, has been revised from VND17.4 trillion ($747.6 million) to VND47.3 trillion ($2 billion), officials said at a meeting on Friday.

The second route, from Ben Thanh to Tham Luong, also around 20 km, will now cost VND47.89 trillion ($2 billion), up from the earlier VND26.12 trillion ($1.13 billion).

Approved by the city back in 2007, the first metro line was to be built using official development assistance (ODA) from Japan, but the investment cost went up afterwards, leading to delays.

In 2009, consultants recalculated the investment and the revised cost pushed the project into the category needing approval from the legislative National Assembly (NA).

Without approval for the total investment sum and funds from the central government, the city had to fork out its own funds to the tune of VND3.3 trillion ($141.82 million) on four occasions to pay contractors and workers.

The prolonged state of indebtedness prompted Japanese Ambassador Umeda Kunio to send a letter to the government, ministries and the HCMC People’s Committee late last year, requesting payment of $100 million to a Japanese contractor or else the construction could be stopped.

Nguyen Thien Nhan, secretary of the city's Party unit, said the latest funding approval "means a lot for the city" and that "there're not any obstacles left for disbursing capital for the project."

The city will push the progress of the first metro line so that it could meet the deadline of completion by 2020, he said Friday.

Work started on the first metro line in August 2012, and so far, 60 percent of the project has been completed.

The city on Friday also appointed Bui Xuan Cuong, director of its transport department, to be the project's chief manager, after his predecessor Le Nguyen Minh Quang handed his resignation, as has at least two other executives of the project's management board.

For the second metro line, the city had already put it on hold for months due to the lack of funding that affected its site clearance process.

Work on the line was supposed to start in 2014 for completion in 2018, but the time to start work has been moved to 2020 while the deadline for completion has been rescheduled to 2024.

HCMC, home to 13 million people including migrants, has been struggling to deal with worsening traffic congestion for years.

The number of personal vehicles has been booming with 7.6 million motorbikes and 700,000 cars on the roads, while public transport is woefully underdeveloped.

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