HCMC faces shortage of funds for Ben Thanh-Suoi Tien metro line

SGGP
Ho Chi Minh City now is owing the contractor of the first metro line Ben Thanh-Suoi Tien VND1,339 billion (US$59 million) because the central Government has yet to arrange funds for the project, reported HCMC Urban Railway Management Board yesterday.

An above the ground stretch of Ben Thanh-Suoi Tien metro line along Hanoi Highway (Photo: SGGP)

An above the ground stretch of Ben Thanh-Suoi Tien metro line along Hanoi Highway (Photo: SGGP)

At a socio-economic review meeting chaired by chairman of the city People’s Committee Nguyen Thanh Phong, head of the board Le Nguyen Minh Quang said that the city had urged the contractor to speed up the project’s progress and the contractor accepted the requirement but required on schedule payment in return.

The city has proposed relevant ministries and agencies to solve capital issue for the project for many times but they have taken no action.
The Ministry of Finance asked the State Treasury to stop disbursement for the project last September because payment amount had exceeded official development assistance (ODA) funds of the year.
Before Tet holidays, HCMC advanced about VND900 billion ($39.59 million) for the contractor to pay workers’ wage.
This year, the project needs over VND5.4 trillion ($238 million) however the central budget has agreed to spend only VND2.1 trillion, which is only sufficient to pay the old debt and the city’s advance.
The city’s target should suggest the Government not to apply disbursement under capital application in terms, but apply installment payment mechanism in line with the project’s progress.
While sponsors said they could advance a sum of money for the project, the city has been stuck in a vicious circle and unable to make payment on schedule, said Mr. Quang.
In a document sent to the Ministry of Planning and Investment, the city People’s committee proposed VND7 trillion ($308 million) for the first metro line and the second phase of the water environment improvement project. Still, the ministry has scheduled to spend half of the amount.

By VAN ANH – Translated by Hai Mien

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