|The metro construction site in HCM City. – VNA/VNS Photo
HCM CITY (VNS) — The cost of constructing Metro Line 2 in HCM City is expected to exceed the initial estimate by more than US$700 million, the head of the metro project said yesterday.
The figure was released during a meeting, chaired by Deputy Prime Minister Hoang Trung Hai, on the pace of construction of the metro network in the city.
The Government had initially approved building the 20km-long Metro Line 2, running from Ben Thanh to Tham Luong, at a cost of some $1.3 billion.
However, the cost was later adjusted due to factors such as inflation, unexpected financial pressures and additional construction, including links to metro lines 3b, 5 and 6. This resulted in the cost soaring to an estimated $2.1 billion, Bui Xuan Cuong, Head of the HCM City Urban Railway Project Management, said.
This is an increase of about 60 per cent compared to the initial estimate.
"Some foreign banks have agreed to provide supplementary funds of more than $720 million," Cuong said.
The cost adjustment needs to be approved by the National Assembly (NA), but Deputy Minister of Transport Nguyen Ngoc Dong is worried that waiting for the upcoming session of the NA would prove even more costly.
"The NA only holds its sessions twice a year, and the investment cost increases five to seven per cent with each year of waiting," Dong said.
To save time, he suggested that the Government seek permission to submit the cost adjustment plan to the National Assembly's Standing Committee, which meets every month, for its approval.
Deputy Prime Minister Hoang Trung Hai admitted that there was a likelihood of the Metro Line 2 project being delayed by no less than three more years if conventional procedures are followed. That would involve completely redoing the project plan, adjusting the investment cost and getting approval from the Government and the NA in the final stage.
To avoid that, Hai has asked the HCM City authorities to prepare a cost adjustment plan to submit to the NA during its next session, in late October. This tactic was used earlier to get approval for cost adjustment in the Metro Line 1 project.
Metro Line 1, running from Ben Thanh to Suoi Tien, is expected to be the first line to be completed, in 2019. It will become operational a year later. — VNS