HCM City seeks another $800m as metro line 2 sees cost overrun

VietNamNet Bridge – HCM City has asked the Government for an additional US$800 million for the metro No 2 line from Ben Thanh to Tham Luong to accommodate design changes and permission to delay completion until 2024.

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Construction of a metro route underway in HCM City. — VNS/VNS Photo


In 2010 the project was approved at a cost of $1.374 billion with basic design by the Transportation Construction and Investment Consultancy Joint Stock Company.

In 2012, after construction began, the investor brought in an international consultancy consortium led by a German firm to make a detailed design.

The latter identified many errors and rectified them.

Further increasing cost was due to the fact that inflation was built into the project only for until 2016, leading to an overrun since it has been delayed.

Earlier the metro No 1 route from Ben Thanh to Suoi Tien saw its cost rise by 87 per cent over the initial estimate to VND47 trillion ($2.1 billion) for exactly the same reason: inexperience of the local company in designing metro systems.

The cost of the first stage of the No 5 line from Bay Hien intersection to Sai Gon Bridge also increased by 87 per cent to euro 1.56 billion ($1.85 billion) after international consultancies entered the scene.

Dr Huynh The Du, lecturer at Fullbright University, told Thanh Nien (Youth) newspaper that the city should review the entire metro project.

Viet Nam should learn from the experience of South Korea and China in building metro systems, he said. In the beginning they relied on international know-how and funding, but later domestic companies took over completely, he said.

“However, Viet Nam now has multiple foreign investors, limited funds and no policies to encourage technology transfer.” 

Source: VNS

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