HCM CITY (VNS)— HCM City may face a fine of VND2.5 billion (US$44,500) per day paid to a Japanese contractor because of delays in construction of Metro Line No 1 package No. 2 linking Ben Thanh Market in District 1 with Suoi Tien Tourist Park in District 9.
A private company in Di An Town of Binh Duong Province has not handed over nearly 2 ha of its land (on the construction site), officials have said.
On Tuesday, HCM City People's Committee again asked the provincial authorities of Binh Duong to provide help to the Binh Duong-based one-member company Vinh Phat Co. Ltd. to hand over the site to the Japanese contractor by December 31.
In a correspondence to Binh Duong People's Committee, Nguyen Huu Tin, deputy chairman of HCM City People's Committee, said: "The municipal authority of HCM City has big concerns over this issue because the continued delays in the handover of the site in Binh Duong Province's Di An Town have seriously affected the progress [of the implementation of] the project, as well as the rising compensations to the contractor."
Some 1,000 households in HCM City and Binh Duong had been moved for construction of the 19.7km Metro Line No 1 Project, which runs through District 1, Binh Thanh, Districts 2 and 9, Thu Duc District in HCM City and Di An District in Binh Duong Province.
Vinh Phat Co. is the only facility on the site which has not been moved for the construction of the project.
The company's management has not agreed with the compensation of VND125 billion ($5.6 million) for moving away from the site.
According to HCM City People's Committee, in a work tour of the project earlier this year, Deputy Prime Minister Hoang Trung Hai told Binh Duong Province to hand over the site for construction of Metro Line No 1 Project by October 31.
The Management Authority of Urban Railways of HCM City (MAUR), the investor of the project, said the construction site must be handed over to the Japanese contractor in January 2013.
They said the delays in site clearance and site hand-over had caused big losses to the contractor.
The Japanese contractor has asked the investor to pay compensation of VND2.5 billion per day for the delays.
Nguyen Van Loc from the Di An Town authorities, said on Tuesday, the town authority invited the management of the company to the town office to announce the decision on the site hand-over, but the representatives of the company said they were ill.
"Three days after decision was issued, if Vinh Phat does not hand over the site, relevant agencies will require that action be taken," said Loc.
Le Khac Huynh, deputy head of MAUR, said site hand-over must be done by the end of this month.
Lecturer Pham Sanh from the University of Transportation said the petition for compensation of VND2.5 billion per day for the delays in site hand-over from the Japanese contractor was legal, as it had been regulated in the contract signed between MAUR and the Japanese contractor.
Construction of Metro Line No 1 Project was scheduled to be completed in 2018. However, the delays in site clearance and hand-over have affected the progress of the project, which is now re-scheduled to be completed and brought into operation in 2020. — VNS