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Chinese contractor seeks further delay to Hanoi's first urban railway

Released at: 15:29, 11/12/2017

Chinese contractor seeks further delay to Hanoi's first urban railway

Photo from news.zing.vn

Test runs and official opening put back nearly a year under contractor's latest proposal.

by Quang Huy

The main contractor of Hanoi’s first urban railway line, running from Cat Linh to Ha Dong, has suggested pushing back the project’s deadline to late 2018, according to the Ministry of Transport.

“This is only the Chinese contractor’s estimate, not an official rescheduling,” Deputy Minister of Transport Mr. Nguyen Ngoc Dong said. “The transport ministry has tasked the project’s management board with reviewing its progress and will report to the Prime Minister in January.”

Under the contractor’s new schedule, the project will have test runs in early September 2018 and be put into operation in November. This would result in an eleven-month delay compared to the previously proposed schedule, which would have seen test runs in October this year and a fully operational line by mid-2018.

Construction of the capital’s first urban railway line was to be conducted from 2008 to 2013 at a cost of some $552 million, with $419 million in loans from China. Ground wasn’t broken until 2011.

Costs were then projected to run to $868 million by 2016, with an additional $250 million to be pumped in by Chinese lenders. The final disbursement is due next March, but complicated procedures applied by China’s Eximbank have hindered the Chinese consortium headed by China Railways Sixth Group.

The Chinese main contractor claimed delayed disbursement of $250 million in official development assistance (ODA) from China is still the cause of the delay. China Railways Sixth Group still owes Vietnamese contractors over VND600 billion ($26.5 million), despite already taking over $65 million from its own working capital to pay them.

Other reasons for the delay include the limited management ability of the inexperienced main contractor resulting in the late and unscientific design, construction, establishment of project payment acceptance and completion documents.

In October, the project’s General Manager, Mr. Tang Hong, said he had reported to the Chinese embassy to urge disbursement and has worked with the Ministry of Transport to speed up the project.

According to Deputy Minister Dong, Vietnam has resolved all disbursement issues on its side but the necessary procedures on China’s side have yet to be completed.

Ninety-five per cent of construction is done, while 60 per cent of imported equipment has arrived in Vietnam and 40 per cent of equipment has been installed. The contractors are expected to install the project’s signal and electronic systems and finish construction of stations in the coming months.

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