VietNamNet Bridge - Deputy Prime Minister Hoang Trung Hai has asked for clarification of which individuals and organizations are responsible for the increase in the price tag of the Cat Linh-Ha Dong urban railway project.

Earlier, the Ministry of Transportation requested the Prime Minister’s approval for an increase in funding of the project from $552 million to $891 million, an overrun of $339 million.

According to the Railway Project Management Unit, during the process of implementation, a number of new items were added to this project and others were adjusted. The clearance process ran slowly, prolonging implementation, which also contributed to the increased cost.

Prime elements of the project include construction of a 13km elevated railway, 1.7km of rail from and to the depot, 13 trains (each with four carriages and a capacity of about 1,200 passengers), 12 elevated stations, and a 9-story building in the 23-hectare depot.

Implementation of the main package of the project (design, equipment and material supply and installation) is assigned to Railway Corporation No. 6 of China, in the form of EPC (engineering, procurement and construction).

Changes to the original plan include the extension of the two-story stations to three stories, intended to reduce the area of site clearance, and pedestrian overpasses at the stations. These adjustments actually reduced the site clearance costs by $43 million, but the overall effect was to add a total cost of $84 million to the project, due to inflation and changes in scale.

The depot in Ha Dong District has soft ground at a depth of 2m to 3m, but the consultant previously did not have any plan to deal with this matter. The design consultant now proposes to treat the weak soil at a cost of $13 million. Slow clearance along with the slow relocation of technical facilities also contributed to the increase in costs, by $88 million.

Many other items have also been adjusted, with a total increase of more than $10 million.

Fluctuations in the prices of raw material prices account for $95 million of the overrun total, according to the Railway Project Management Unit.   

After asking for the government’s approval for the funding increase, Deputy Minister of Transport Nguyen Hong Truong asked the State Audit Agency to review the project in order to prevent misstatements that may cause damage to the State budget.

The project has a total investment of more than $552 million (the price in 2008), including China’s ODA of $419 million, $169 million of credit and $133 million of Vietnam's reciprocal capital. The project was scheduled for implementation from August 2008 to November 2013.

After the adjustment, the Ministry of Transport plans to put the Cat Linh-Ha Dong route into trial operation in January 2015 and official operation in June 2015.

Chi Trung