The municipal People’s Committee has sent a report to the Government on the details of cost overruns.
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An elevated section of HCM City’s Ben Thanh – Suoi Tien metro line runs along Hanoi Highway. |
The metro line No 1 from Ben Thanh in District 1 to Suoi Tien Theme Park in District 9 was approved by the city in April 2007 with an investment of VND 17.4 trillion (USD 766.4 million). At that time, approval by the National Assembly (NA) was not needed.
After investment costs were re-calculated by consulting agencies, costs increased to more than VND 47.300 trillion (USD 2.08 billion).
The city’s administration attributed the surging costs to price changes of materials, minimum wage hikes in the 2006-2009 period, and the depreciation of the Vietnamese dong and Japanese yen, among others.
The PM agreed with the city’s administration to approve the project adjustments in August 2011. With investments reaching more than VND 47.3 trillion, the NA then had to approve the amount.
As proposed by the city’s administration, the PM assigns an agency to report to the NA on investment adjustments and assists the city in advancing capital to continue work on metro line No 1.
According to the municipal People’s Committee, the city has signed three loan agreements worth 31.208 trillion VND, of which VND 11.929 trillion has been disbursed.
The project has implemented four bidding packages and has completed around 48 percent of the work.
As for metro line No 2, which connects Ben Thanh with Tham Luong in District 12, the municipal People’s Committee approved a design by a local consulting firm in 2010 with a total investment of USD 1.37 billion.
In 2012, the IC, a consortium from Germany chosen as the international consulting firm two years later, revised the detailed design of the project with a total investment of USD 2.1 billion.
In 2015, the city government petitioned the PM to adjust the investment cost of the metro line No 2 project.
The city’s administration has asked the PM to approve the project’s investment and implementation adjustments and allow the city to assess and approve project adjustments.
According to the Ministry of Transport, the Ministry of Planning and Investment and the State Bank of Vietnam, metro line No 2 can be approved by the city authority but comments from the PM are needed before implementation.
According to the Ministry of Construction and Ministry of Finance, the project needs to be reported to the PM before it is submitted to the NA for approval.
Source: VNA