A site is cleared to make room for the second metro line in HCM City. The consultancy cost for the project has increased 12.6 million euros – Photo: VNA

The Ministry of Planning and Investment has asked the HCMC government to state reasons for the tardiness in the signing of an agreement with the consulting firm of the project, Implementation Consultant (IC). The involvement of IC in the project is a requirement to extend the loan contract with German development bank KfW to the end of 2026, ask for additional loans and hold tenders for the main packages.

The HCMC government has yet to sign an appendix with IC since it stopped work at the project in October 2018. With this appendix, the increased cost is nearly 3.7 million euros, news site VnExpress reported.

Earlier, the Management Authority for Urban Railways (MAUR) of HCMC signed 12 appendices with IC, with six of them leading to a cost hike of nearly nine million euros. Thus, the value of the contract has increased by 12.6 million euros compared with the value of the contract signed eight years ago.

According to MAUR, the signing of the 13 appendices is compulsory during the execution of the project due to adjustments to the boundary and design of the project, workload and bidding documents. The adjustments forced the consultant to update documents and complete procedures for loans for the project.

In 2012, MAUR signed a consultancy contract worth some 44 million euros with IC for the city’s metro line project. The contract would be conducted in two phases.

In the first phase, valued at some 13 million euros, IC would design and support tenders for the main packages. In the second phase, worth more than 31 million euros, it would supervise the construction of the metro line. The capital for the two phases would be sourced from KfW.

IC has completed the design of the tenders and submitted many bidding documents. MAUR has paid IC over 18.5 million, including 10.5 million for the first phase and nearly eight million euros for the second phase.

In late November last year, the HCMC government assigned an agency to inspect the increased cost. Meanwhile, MAUR has worked with IC to address issues with regard to the project but the process has been delayed due to Covid-19. It expects to sign the appendix with IC next month.

The second metro line project in HCMC had its investment revised up to US$2.1 billion in late 2019 from the initial US$1.3 billion.

The line, linking Ben Thanh Market in District 1 and Tham Luong Depot in District 12, will be more than 11 kilometers long and include nine underground stations, an elevated station and a depot in District 12. Work on the project is expected to start this year and be completed by 2026.  SGT

HCMC’s second metro line project on verge of capital shortage

An agreement to borrow VND12 trillion (US$518.7 million) from the German development bank KfW for HCMC’s second metro line project will expire on December 30 but the city has yet to sign another contract with the consulting firm of the project,