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Monday, June 24, 2024

HCMC’s second metro line project on verge of capital shortage

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HCMC – An agreement to borrow VND12 trillion (US$518.7 million) from the German development bank KfW for HCMC’s second metro line project will expire on December 30 but the city has yet to sign another contract with the consulting firm of the project, Implementation Consultant (IC), which is a requirement to extend the loan agreement with KfW.

IC stopped its work at the project in October 2018.

According to the Ministry of Planning and Investment, the involvement of IC in the project is essential to extend the loan contract with KfW to the end of 2026 and ask for supplemental loans. It is also a foundation to begin packages to build the underground section and underground stations as well as clear the site for the project to borrow loans from the Asian Development Bank (ADB) and the European Investment Bank (EIB).

The Ministry of Planning and Investment has asked the HCMC government to report the project’s progress and reasons for a slowness in the signing of an agreement with IC. The city must also submit a plan on the project’s execution to the ministry before December 30, news site Vnexpress reported.

In late August, ADB, KfW and EIB asked the city to speed up the signing of an agreement with IC.

The Management Authority for Urban Railways (MAUR) of HCMC has worked with IC to address issues at the project but the process has been delayed due to Covid-19. It expects to sign an agreement with IC next month.

The second metro line project in HCMC had its investment revised up to US$2.1 billion in late 2019 from the initial US$1.3 billion. Of the total, nearly VND37,500 billion would be borrowed from ADB, KfW and EIB, while the remainder would be sourced from Vietnam’s reciprocal capital.

The line, linking Ben Thanh Market in District 1 and Tham Luong Depot in District 12, will be more than 11 kilometers long and include nine underground stations, an elevated station and a depot in District 12. Work on the project is expected to start next year.

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