Investment for Hà Nội urban railway project to increase by US$650m

October 25, 2022 - 09:57
The reason for the increase is that the underground section was increased from 8.5 to 8.9km.
An artist's impression of the C9-Hoàn Kiếm Lake Station of the Nam Thăng Long-Trần Hưng Đạo urban railway project. — Photo courtesy of the Hà Nội People’s Committee

HÀ NỘI — The Hà Nội Metropolitan Railway Management Board (MRB) has proposed to increase the total investment of the Nam Thăng Long-Trần Hưng Đạo urban railway project.

In a letter sent to the Hà Nội People’s Committee, the investment is proposed at VNĐ35.6 trillion (US$1.4 billion), an increase of VNĐ16.124 trillion ($647.7 million) compared to the approved decision.

The reason for the increase was that the underground section was increased to 8.9km.

The total land for the project will be 92.04ha instead of 49.06ha as in the initial decision.

Explaining the changes in the total project investment, MRB Hà Nội said the project was researched and prepared in the 2007-08 period, when the country did not have enough norms and prices applied for urban railway works.

The adjustment is based on the investment rate of similar projects that have been built in Asian countries such as Thailand, Japan, the Philippines and India. Those projects included underground stations and tunnel structures.

Although MRB Hà Nội updated investment rates of the projects and considered the price level in Hà Nội in 2008, due to practical experience shortage, the calculation only considered the average level, not the high safety requirements. It also failed to include costs for organisation and maintenance.

Based on the above proposal, MRB Hà Nội also recommended the completion time of the project would be 2034. The estimated maintenance time is about five years.

The reason is that the general consulting service contract for the project was signed in March 2011 based on the approved schedule. However, the process of reviewing, verifying and appraising the project lasted from 2012 and has not been completed, so the construction and installation bidding packages have not been implemented.

Therefore, MRB Hà Nội believes that it is necessary to adjust the implementation time of the project.

In Decision 2054 issued on November 13, 2008, the Hà Nội People’s Committee approved the Nam Thăng Long-Trần Hưng Đạo urban railway project with a total length of 11.5km, of which 8.5km is underground.

The project was planned to last from 2009-15.

Total investment for the project is VNĐ19.5 trillion ($785 million), of which VNĐ16.4 trillion ($661.9 million) is made up of loans from the Japan International Cooperation Agency (JICA) and VNĐ3 trillion ($123.5 million) from Hà Nội’s budget. — VNS