Chinese contractor demands extra US$50 million to operate Hanoi’s first metro line

While the completion date of the Cat Linh-Ha Dong urban railway project in Hanoi remains unknown, the general contractor of the project has requested a down payment of US$50 million for the system operation before handing over the project, local media reported.

The Hanoi Metropolitan Railway Management Board (MRB) has reported the issue to the Ministry of Transport, noting that the payment must comply with the regulations of the engineering procurement and construction contract.

The inauguration date of Cat Linh-Ha Dong urban railway is nowhere in sight. Photo: Pham Hung

“The two sides have agreed to review the provisions of the contract within 15 days and hold a meeting to discuss the pending works,” the MRB noted.

The railway line 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 (1,435mm).

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.

Work on the project began in October 2011, and the railway was initially scheduled to be put into commercial operation in 2015.

The railway is basically complete but is yet to be put into operation due to problems related to technical equipment at the depot, the safety assessment of trains, and final settlement of the contract and payment.

In February, over 100 Chinese experts were unable to return to Vietnam due to the Covid-19 pandemic, delaying the trial operation of the railway. However, on April 24, the Vietnamese government agreed to allow the entry of five experts working on the project.

The MRB has asked the Chinese contractor to complete the as-built documents and inspection dossiers for components such as the technical equipment, design of stations and depot.

Regarding the system safety certification, the MRB will work with the French consultancy Apave-Certifier-Tricc (ACT) and the Chinese contractor to complete it in line with the laws in Vietnam.

According to the government, the completion date for the project has not yet been decided and the responsibilities of organizations and individuals for the slow progress have not been made clear; so, funding has not been allocated for the construction supervision package.

To address these obstacles, the MRB suggested that the Ministry of Transport report the issues to the government for guidance, extend the construction supervision package, and organize meetings with the Chinese contractor to discuss capital demand for the trial operation of the railway.