HCMC asks for untying knot in capital for metro line No.1

SGGP
The Management Authority for Urban Railway of Ho Chi Minh City (MAUR) has been simultaneously implementing the metro construction projects No.1 (Ben Thanh - Suoi Tien) and No.2 (Ben Thanh - Tham Luong). Of which, metro project No.1 is currently facing difficulties in the capital due to obstacles in administrative procedures. Recently, the People's Committee of HCMC has sent an urgent document to the Ministry of Planning and Investment (MPI) and the Ministry of Finance (MoF) to request support.
HCMC asks for untying knot in capital for metro line No.1 ảnh 1 An Phu Station on metro line No.1 in Thu Duc City is being completed. (Photo: SGGP)
Cannot extend loan agreement VN11-P7

The ODA loan of metro line No.1 is more than 185.1 billion Japanese yen, equivalent to more than VND38.26 trillion. The allocated ODA capital is more than 70.8 billion Japanese yen, equivalent to more than VND14.33 trillion. The on-lending capital is more than 114.3 billion Japanese yen, equivalent to more than VND23.93 trillion. The representative of MAUR said that the cumulative disbursement of ODA capital allocated from the central budget for the project by January 31 this year is more than VND10 trillion.

The ODA capital of more than VND4 trillion allocated from the central budget that has not been disbursed under two signed loan agreements includes the loan agreement VN11-P7 with nearly 8.65 billion Japanese yen and the loan agreement VN15-P5 with roughly 9.17 billion Japanese yen. However, due to the sluggishness in determining the remaining ODA capital allocated from the central budget of the project, HCMC could not timely disburse the ODA capital allocated from the loan agreement VN11-P7, whose disbursement expired on November 22, 2020.

Deputy Prime Minister Pham Binh Minh chaired a meeting to resolve this problem at the end of April. He directed that based on the approval of the adjustment of investment decision for metro project No.1 of the HCMC People's Committee, the MPI should lead and coordinate with the People's Committee and the MoF to supplement the medium-term public investment plan for the 2016-2020 period and the 2021 budget estimate for the project upon the direction of the Prime Minister.

The rest would be put into the medium-term public investment plan for the 2021-2025 period and the estimate from 2021 onwards following the Law on Public Investment and relevant laws. Deputy Prime Minister Pham Binh Minh also directed the HCMC People's Committee to coordinate with the MoF to discuss with the Japanese side about the possibility of extending the loan agreement VN11-P7.

MAUR issued Official Letter No.1019/BQLDSDT-QLDA1 to the Japan International Cooperation Agency (JICA) in Vietnam on April 28. After that, JICA announced that the disbursement deadline of the Loan Agreement VN11-P7 had ended on November 22, 2020. Thus, the extension of the loan agreement VN11-P7 for the project was impossible.

Considering capital reallocation

Due to the above reasons, in the document sent to the MPI and the MoF, the People's Committee of HCMC requested the MPI to allow the city to disburse ODA capital allocated from the central budget in 2021 under the loan agreement VN15-P5. The disbursement of the loan agreement VN15-P5 expires on June 9, 2026.

To ensure that HCMC would use all the ODA capital allocated from the central budget for the project, the municipal People's Committee proposed the MoF to consider reallocating the allocated and on-lending ODA capital of the loan agreement VN15-P5 as a basis for it to register additional medium-term capital plans for the 2021-2025 period and annual capital plans from the ODA capital allocated from the central budget.

According to MAUR, the metro line project No.1 has been completed 87.27 percent of the total project volume. Specifically, the underground package CP1a from Ben Thanh Market Station to Opera House Station has achieved 93 percent construction volume. The underground package CP1b from Opera House Station to Ba Son Station has exceeded 98 percent. Package CP2 is nearly 94 percent complete. Package CP3 has reached 73 percent of construction volume. For the metro line project No.2, up to now, districts have issued compensation decisions, achieving 99.67 percent, with 601 out of 603 cases, and the rate of site handover has touched 79.1 percent, with 477 out of 603 cases.

According to MAUR, the complicated development of the Covid-19 pandemic in HCMC has caused many difficulties. Particularly, the unit encounters a shortage of human resources. Costs incurred when subcontractors implement the regulations of ‘one route, two destinations’. Along with that, the contractors have to perform the three-on-site construction, affecting the progress and construction volume of the project. However, MAUR still recommends that the general contractors continue to comply strictly with regulations on pandemic prevention, and at the same time, make efforts to ensure the operation progress of metro line No.1.

By Quoc Hung – Translated by Gia Bao

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