Long-delayed Metro Line No.2 may be added $701.78 million?

Metro Line No.2 has been delayed for 10 years (Illustration image)

Approved in November 2008, the project is invested by Hanoi Metropolitan Railway Management Board (MRB) with the total investment capital of VND19.55 trillion ($857.5 million) by the Japan International Cooperation Agency (JICA).

Under the approved plan, the metro line will be 11.5 kilometre long, nearly 9km of which will run underground and 2.6km above the surface. It consists of a 17.5-hectare depot in Xuan Dinh ward, North Tu Liem district, and ten stations, including three elevated and seven underground.

The project was expected to come into operation in 2017, however, the construction has yet to be kick off. The investors have only completed the building of tender packages and the basic design.

In 2015, the Hanoi People’s Committee proposed the Ministry of Planning and Investment (MPI) to adjust the investment capital of the project up to VND51.7 trillion ($2.27 billion), however, because the added capital volume was too extensive, MPI asked the Hanoi People’s Committee to reconsider its proposal. As a result, for its second proposal, the Hanoi People’s Committee only requested to increase the capital to VND35.7 trillion ($1.56 billion).

Accordingly, in April 2017, the Hanoi People’s Committee submitted the adjustments to other agencies for consultation.

The first adjustment involves the basic design of the project. In particular, although the total length of the route remains the same (11.5km), the underground parts increased from 8.5 to 8.9km and the total length of the overhead parts was reduced from 3 to 2.6km.

In addition, to ensure investment efficiency, the total number of trains (each having four carriages) for this line also dropped from 14 to 10. The train frequency will be five minutes.

Due to long delays, the project’s deadline is expected to be extended to 2023.

When the Hanoi authorities submitted the adjustments to other agencies, Hanoi authorities said that they signed an agreement with JICA for the first phase’s loan of ¥14,688 million ($133.3 million), including ¥11,573 million ($105 million) for construction and ¥2.223 million ($20.18 million) for consultancy services, effective from July 2009 to June 2019.

On another hand, in February 2018, Vingroup was permitted to compile investment dossiers, including the expanded phase of the Metro Line No.2 from Tran Hung Dao Street to Thuong Dinh with the length of 5.9km.

Vingroup proposed building the pre-feasibility and feasibility plans financed from their own equity. If Vingroup become the official investors of the project, its expenditure for building investment dossiers will be added to the investment capital of the projects.

However, in case it is not selected to develop the project, it will be ready to hand over all investment dossiers to the Hanoi People’s Committee and the selected investors without asking for recompensation.