Chinese contractor’s money issues put Hanoi metro line on the ice

illustration photo - source: vnexpress.net

At the March 2 meeting with Vietnamese authorities on the progress of Cat Linh-Hadong metro line, the representative of China Railway 6th Bureau Group (China Railway) said that Cat Linh, La Thanh, Thai Ha, Lang, Thanh Xuan 3 stations and the one at Hadong coach station are between nine and 22 days behind schedule. Other parts of the works are also behind schedule.

According to Deputy Minister of Transport Nguyen Hong Truong, the contractor promised to ensure the technical as well as financial capacity to carry out the project. The representative then claimed that China Railway was asking for a $19 million increase in the initial investment, but the Chinese government has not yet approved it. He said China Railway was trying to mobilise $19 million to pay subcontractors first and wait to be reimbursed later.

According to the Transport Engineering Construction and Quality Management Bureau, as of February 29, the principal contractor owed Vietnamese subcontractors VND554 billion ($25 million).

Trieu Khac Dung, deputy director of the bureau, said that China was tightening money flows to foreign countries and the Cat Linh-Ha Dong project was one of this policy’s casualties. Subcontractors and their machineries are already on site but there is no money to start the work.

Nguyen Hong Truong ended the meeting by asking the Chinese contractor to finish the project by the end of 2016. The Ministry of Transport is going to invite China Railway’s leadership to attend talks in Vietnam.

The Cat Linh-Hadong urban railway line in Hanoi is built using official development assistance (ODA) from China. The main components of the project, engineering, procurement, and construction management, are carried out by China Railway 6th Bureau Group.

The project includes 13 kilometres of over-ground railways and a 1.7 kilometre section at the depot for trains to reverse. The tracks are designed with the maximum speed of 80 kilometres per hour. The line is going to have 13 trains of four carriages each, a total capacity of 1,200 people, with a train arriving every two minutes. There are 12 over-ground stations dotted across Hanoi and a nine-story operation building on the 23-hectare depot area.

The project started in 2011 and was expected to be completed in 2015. There were numerous accidents involving falling steel stakes and a list of other safety issues, causing work to stop for a few months at the work. This abrupt halt, together with the money shortage, caused the Ministry of Transport to extend the deadline to the end of 2016.