Minister and Chairman of the Government Office Mai Tien Dung, at a press conference in Hanoi on December 3, said that more than VND13.6 trillion (US$584.1 million) had been disbursed for the first metro line project in HCMC, so the debt to Japanese construction and consultancy contractors was not too high, the local media reported.

A section of the first metro line project in HCMC. Minister and Chairman of the Government Office Mai Tien Dung said the debt to Japanese contractors was not too high

Responding to questions on the complaint by Japanese Ambassador to Vietnam Umeda Kunio regarding the deferred payment of hefty sums for Japanese contractors, which could lead to a suspension of the project, Minister Dung said the metro line No. 1 project, which connects Ben Thanh Market in District 1 and Suoi Tien Park in District 9, was approved by the HCMC government in 2007, with a total investment of VND17.4 trillion, sourced from official development assistance (ODA) loans and local reciprocal funds.

The city later hired a consulting firm for the project and consulted ODA loan providers, the relevant ministries and agencies and the Prime Minister on the project.

In 2011, the investment needed for the project was adjusted upward to VND47.3 trillion, making it a project of national importance.

Therefore, the HCMC government reported the project investment adjustment to the Government. The prime minister later assigned the Ministry of Transport and the relevant agencies to consider the city’s proposals related to the project.

On November 5, the Ministry of Transport consulted the relevant ministries and agencies on the project.

Late last month, Ambassador Kunio wrote a letter to HCMC Party Chief Nguyen Thien Nhan saying that the slow payments for the project’s construction and consultancy contractors had amounted to over US$100 million.

He noted that the pressure on contractors had reached its limits, adding that if the problems were not resolved, work on the project could cease later this month.

Therefore, the Japanese side recommended the HCMC authority urgently guide its relevant departments and agencies, particularly the municipal Management Authority for Urban Railways, on ways of dealing with the problems as soon as possible.

The ambassador remarked that the contract for the project’s consulting unit, NJPT, a consortium led by Japan’s Nippon Koei, had expired in April 2017. Though the relevant sides have held many negotiation sessions to extend the contract, it has not yet been amended.

The consortium has had no other choice but to offer its consultancy services without receiving any payments for the past 19 months.

The late payments owed to the NJPT consortium now total up to US$20 million, affecting the payments for other contractors, said Kunio.

SGT