The HCMC Management Authority for Urban Railways (MAUR) has asked the HCMC government for an additional advance of VND1,173 billion to pay the contractors of the Metro Line No. 1 project in October and November, otherwise the crucial project may grind to a halt.

An elevated section of the Metro Line No.1 is complete. However, the project is now at risk of delay due to slower-than-expected capital disbursement 

The city needs VND5,442 billion this year alone to finance the construction of Metro Line No.1 linking Ben Thanh Market in District 1 and Suoi Tien Park in District 9, but the amount allocated by the Government is only VND2,119 billion, heard a meeting on the implementation of metro line projects last Friday.

The Government had earlier agreed to allocate VND20,930 billion from the medium-term public investment plan for the city in 2016-2020 for the project. However, only VND7,500 billion has been disbursed, meeting 39% of the plan.

On August 29, the Prime Minister issued Decision No.1292 on the third State budget allocation plan in 2017, but capital disbursement for the Metro Line No. 1 project has still got stuck.

To ensure smooth construction work, MAUR has asked the municipal government to advance VND1,173 billion from the city’s budget for the contractors, of which VND600 billion must be paid in October and VND573 billion in November. Otherwise, the contractors will scale down or even stop construction work.

This is the third time MAUR has asked for advance payments for the project.

Head of MAUR Le Nguyen Minh Quang said the city has to pay the contractors VND500-600 billion a month. Some contractors said they would suspend the project due to late payments.

According to Quang, advance payments from the city’s budget are just a temporary solution. If slow disbursement continues, the project would be at risk of suspension or fall behind schedule.

At a meeting of the National Assembly Standing Committee on October 12, Minister of Planning and Investment Nguyen Chi Dung said the Metro Line No.1 project was initially approved at an estimated investment of VND17 trillion. The cost was then revised to over VND47 trillion. The extra investment of VND30 trillion must be approved by the National Assembly.

However, the plan has not gone before the National Assembly, since the Ministry of Planning and Investment, the Ministry of Finance and the HCMC government have not arrived at an agreement on the proportion of funds to be allocated from the central State budget.

SGT