A train parked at Long Bình Depot in Thủ Đức City. HCM City’s first metro line connects Bến Thành market in downtown District 1 and Long Bình Depot in Thủ Đức City. VNA/VNS Photo

HCM CITY — Việt Nam and Japan have signed a fourth loan agreement for HCM City’s first metro line worth over JPY41 billion (US$288 million).

The funding is provided under the Special Terms for Economic Partnership (STEP), a type of Japanese ODA granted to projects that can benefit from advanced technologies and know-how of Japanese firms.

These projects are required to use Japanese as the main contracts or as the lead of the contractor joint venture, and at least 30 per cent of the materials used need to be from Japan.

Japan’s previous loan agreements for the project were signed in 2007, 2012, and 2016, worth a total of JPY155.3 billion ($1.09 billion).

The city’s metro line No 1 is a 19.7km line that will run between Bến Thành market in downtown District 1 and Long Bình Depot in Thủ Đức City. 

The line is now 97 per cent completed after facing many delays since work started in 2012.

With a total cost of over VNĐ43.7 trillion ($1.85 billion), it will include three underground stations and 11 elevated ones. 

The line is expected to be completed this year and begin commercial operations in 2024.

It is currently confronting obstacles related to financing for its mechanical and electrical components, as well as for its trains.

The loan agreement signing took place during Prime Minister Phạm Minh Chính’s trip to attend the Commemorative Summit for the 50th Year of ASEAN – Japan Friendship and Cooperation in Japan from December 15-18.

Japan remains Việt Nam’s top ODA partner, having pledged a total of $674 million in ODA to Việt Nam this year, the highest amount since 2017.

As of the 2020 fiscal year, Japan had lent Việt Nam a total of JPY2.8 trillion ($27.5 billion) in ODA. — VNS