Jun 02, 2020 / 19:27

Vietnam refuses Chinese contractor’s demand for US$50-million advance payment

The Hanoitimes - A transport ministry official said that Vietnam has so far paid about 80% of the contracted amount and the rest would be paid just before the contractor hands over the project.

Vietnam has refused to pay the Chinese contractor US$50 million the latter wants in advance to perform test run on Hanoi’s first metro line, Kinhtedothi.vn reported.

Deputy Minister of Transport Nguyen Ngoc Dong told reporters on June 2 that Vietnam has been making payments on schedule to the Chinese general contractor of the Cat Linh – Ha Dong railway line in Hanoi, and so the request, made at an online meeting in May, would not be met.

 A train in a test run on the tracks of the Cat Linh – Ha Dong Metro Line in Hanoi. Photo: Giang Huy

"Even in financial woes, the Chinese contractor has to conduct the test run of the line. It is not our responsibility to finance the test run," Dong confirmed.

The deputy minister added that the Vietnamese side has so far paid about 80% of the contracted amount and the rest would be paid just before the contractor hands over the project.

Due to the Covid-19 pandemic, only four senior experts of the Chinese general contractor are present in Vietnam, including the project director Tang Hong and three other experts.

More than 150 Chinese experts needed for the remaining work would come to Vietnam this month and will be quarantined for 14 days, according to the Hanoi Metropolitan Railway Management Board.

Besides, a safety evaluation is mandatory before commercial operation begins. However, the experts from French firm Apave-Certifer-Tricc, who will do the evaluation, have not been able to enter Vietnam.

The metro line’s 20-day test run has therefore been postponed since February, and the Chinese contractor has not set a new date.

The railway is one of the key public transport projects in Hanoi. Since September 2018, its rolling stock of 13 trains has been tested, with the average speed of 35 kilometers per hour.

The railway is 13.5 kilometers long from Cat Linh Station in downtown Dong Da district to Yen Nghia Station in the southwestern Ha Dong district, and uses standard-gauge rail track.

Construction began in October 2011 and was originally scheduled for completion in 2013. But several hurdles, including loan disbursement issues with China that were only resolved in December 2017, stalled it for years.

Project costs have more than doubled from the original VND8.8 trillion (US$553 million) to VND18 trillion (US$868 million), according to state auditors, applying the exchange rate at their respective timings.