HCMC has cut unnecessary costs to lower the investment capital for its first metro line by VND3.4 trillion (US$146.5 million) to VND43.6 trillion.
Workers at an underground section of the first metro line project in HCMC. The investment required for the project has been reduced by VND3.4 trillion
On the sidelines of a conference on traffic safety on November 13, HCMC Vice Chairman Vo Van Hoan said the municipal government would submit the plan on investment reduction to the municipal People’s Council so that the council can issue a resolution to allocate the reciprocal capital for the project at its meeting at the end of this year.
Hoan stated that the total investment has been greatly reduced, but this will not affect the quality of the project. The project is 75% complete, so all major variables have been identified and there are few chances of additional costs arising.
In principle, the Government will disburse the capital as soon as the city adjusts the investment for the project. However, the process is complicated, so the city expects to receive the capital by March or April next year.
The city plans to advance VND1.7 trillion from its budget to pay investors, contractors and laborers, Hoan reported.
The 20-kilometer metro line No.1 connects Ben Thanh Market in District 1 and Suoi Tien Park in District 9 and passes through districts 1, 2, 9, Binh Thanh and Thu Duc in HCMC and part of Di An District in neighboring Binh Duong Province. It has 2.6 kilometers of underground tracks and over 17 kilometers of elevated tracks along Hanoi Highway.
The city will complete the construction of the remaining items, receive cars and train human resources to put the project into operation in 2021.
The city has made three advances totaling VND5 trillion for the project. SGT
In a report sent to the NA, the Government pointed out that the volatile exchange rate between the Vietnamese dong and the Japanese yen is one of the main reasons for cost overruns in HCMC’s Metro Line No.1 project.
The Ministry of Transport plans to develop 16 new metro line projects in HCMC and Hanoi, though the existing five projects are facing cost overruns and slow execution.