Capital shortage slows HCM City metro project

Ben Thanh-Suoi Tien metro project

According to Le Nguyen Minh Quang, head of the HCM City urban railway project management board the project needs a total investment of VND5.4 trillion (USD245.4 million) this year, however, to date, the government has only released VND2.1 trillion (USD95.4 million).

“HCM City authorities have informed the government of the problem, but the disbursement of remaining capital for the project this year has not yet been carried out,” Quang added.

Quang said that since September 2016, HCM City advanced the city budget for the project, but, the city can’t do so as it has many issues to be dealt with. If the situation does not improve, the project will face a high risk of being delayed and lag behind schedule.

This has also seriously affected the image of Vietnam among foreign investors. At a recent meeting with HCM City authorities, representatives from contractors raised their concerns about the possibility of payment for the project, Quang noted.

Earlier, HCM City asked the government for the allocation of VND7 trillion (USD318.1 million) for the Ben Thanh-Suoi Tien metro and water quality improvement projects. However, to date just half of this has been approved.

Ben Thanh-Suoi Tien metro project is valued at USD2.49 billion. The project, which is started in August 2012, is nearly 20 kilometres long, connecting HCM City’s District 1 and Binh Duong Province’s Di An District.

Just over a third of the project has been completed, which is scheduled to go into operation in 2020.