Saigon’s first metro line will not open on schedule

Created 19 October 2018
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A paucity of funds will prevent Ho Chi Minh City from completing its first metro line by 2020 as scheduled.
Saigon’s first metro line will not open on schedule

The HCMC Urban Railways Management Authority said it needs the city to spare its own budget so that it can pay contractors for the parts they have finished.

“The city now has to provide around VND1 trillion ($42.85 million) for the project to be continued,” said Hoang Nhu Cuong, deputy director of the HCMC Management Authority for Urban Railways at a municipal meeting on Wednesday.

He said the part contractors have finished has cost up to VND2 trillion, but the city has paid them only VND220 billion, because it has to obtain the National Assembly’s approval to access government funding.

Construction of the metro system in the city is considered a key national project and requires the NA’s approval before the government makes any financial decision. While that approval is pending, there is no point conducting capital assessment and investment disbursement surveys, the Ministry of Planning and Investment said earlier this year.

According to the railway management unit, given this progress, the first metro line of HCMC cannot be finished by the current deadline.

It estimated that the total costs for building the first metro line this year is VND5 trillion, and if the main investor, HCMC, fails to pay contractors on time, it would be “very dangerous,” Cuong said.

“If just one contractor quits, we will have to spend time and effort organizing another bidding process to find another contractor,” he added, noting that the city has worked several times with the central government on this issue, but is yet to resolve it.

Work started in August 2012 to build the first metro line that runs 20 kilometers (12.43 miles) through five HCMC districts of 1, 2, 9, Binh Thanh and Thu Duc and Di An District in the neighboring province of Binh Duong.

It will run underground from Ben Thanh Market for 2.6 km past the Opera House and Ba Son Shipyard, and then cross the Saigon River on an elevated track that passes through District 2 on the way to Suoi Tien Park and the terminus at Long Binh in District 9.

So far, more than half of the project has been completed.

Work on this line has been delayed several times, all due to funding problems.

In 2007, the city approved the line and estimated that it would cost around VND17.4 trillion. Then, the project did not belong to the category that needs to be reviewed by the NA.

But later consultants of the project recalculated the investment in 2009 at VND47.3 trillion.

In 2011, the Prime Minister agreed that HCMC can revise the expenditure estimate, but at such a high cost, the project fell into the category that needs approval from the NA.

In order to allow the project to go this far, HCMC has had to use its own budget four times to make advance payments to contractors.

The city has already put on hold work on its second metro line. The Ben Thanh-Tham Luong line will run nearly 20 kilometers (12 miles) between District 1 and District 12. The line was initially scheduled to go into operation in 2018, but so far it has remained on paper.

The estimated cost of the line has also ballooned from $1.3 billion to more than $2.1 billion, and the city also needs to wait for the NA to approve this.

Ho Chi Minh City, the country’s biggest city with a population of 13 million, 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.

Source: VNE

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