JavaScript is off. Please enable to view full site.

Supervision, consultancy costs jump $7.8 million due to slow construction of Hanoi metro line

Supervision, consultancy costs jump $7.8 million due to slow construction of Hanoi metro line

Tuesday, September 14, 2021, 10:02 GMT+7
Supervision, consultancy costs jump $7.8 million due to slow construction of Hanoi metro line
Two trains are pictured during a test run along the Cat Linh - Ha Dong urban railway in Hanoi. Photo: Pham Tuan / Tuoi Tre

The prolonged implementation of Hanoi’s first metro line has caused the cost of its supervision and consultancy contract to shoot up by US$7.8 million.

The Ministry of Transport mentioned the figure in a document recently sent to the Ministry of Finance to report on the current progress of the Cat Linh - Ha Dong urban railway project in the capital city.

As the engineering, procurement, and construction (EPC) contract of the metro section was not completed as scheduled, the costs of supervision and consultancy soared by a hefty $7.835 million, the transport ministry stated.

Vietnam’s corresponding capital left for the project is currently not sufficient to pay for the cost overrun, while the agreement on additional loans, signed by the Vietnamese Ministry of Finance and the Export-Import Bank of China, still has about $26.4 million.

In late April, Vietnam’s transport ministry asked the bank to amend an article of the additional loan agreement so the supervising and consulting contract could be among items financed by the deal.

However, the request was not approved by the Chinese lender.

According to experts, it is quite common for the cost of auxiliary contracts to increase due to sluggish implementation of a project with foreign lending.

In such a case, the cost overrun can be settled with the remaining capital of the foreign loan agreement, backup fund, or corresponding capital.

If the corresponding capital is insufficient, the local budget is usually allocated to pay for the difference.

The experts added that amending a foreign loan agreement can be a very long process.

Stretching 13 kilometers, the Cat Linh - Ha Dong urban railway runs from Cat Linh Station in downtown Dong Da District to Yen Nghia Station in Ha Dong District.

The project saw its investment cost ballooning to VND18 trillion ($868 million) from the initial estimate of VND8.7 trillion ($552.8 million).

Work on the railway began in October 2011 and was initially scheduled for completion in 2013.

However, several hurdles, including problems in China’s official development assistance (ODA) loan disbursement that were only resolved in December 2017, have stalled it for years.

The line has been awarded a safety certificate by the French consulting consortium Apave-Certifier-Tricc but it has yet to begin commercial operation so far.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!

Tuoi Tre News

More

Read more

;

Photos

VIDEOS

Vietnam’s Mekong Delta celebrates spring with ‘hat boi’ performances

The art form is so popular that it attracts people from all ages in the Mekong Delta

Vietnamese youngster travels back in time with clay miniatures

Each work is a scene caught by Dung and kept in his memories through his journeys across Vietnam

Experience summer sand-boarding in Mui Ne

Sand-boarding, a popular activity amongst local children in the coastal tourism town of Mui Ne in south-central Vietnam, is attracting hundreds of tourists to the Red Sand Dunes

Latest news