Increased investment in Nhon metro by more than 1,900 billion VND

Accordingly, the completion time is 2027; the total project investment is adjusted to more than 34,826 billion VND, an increase of 1,916 billion VND compared to the decision approved in 2013.

More than 1900 billion dong invested in Hanoi metro line, expected to be completed in 2027, image 1 — Train on Nhon - Hanoi Railway Station urban railway line on trial run. (Photo: VNA)

Of which, construction costs increased from over VND 11,489 billion to over VND 13,800 billion; equipment costs increased from over VND 9,350 billion to over VND 12,554 billion; compensation, support and resettlement costs (including relocation of underground and above-ground works) increased from VND 974 billion to over VND 1,356 billion; construction investment consulting costs were adjusted from nearly VND 1,800 billion to over VND 3,357 billion.

In particular, other expense items were adjusted down from more than VND 3,534 billion to more than VND 2,000 billion; provision expenses decreased from more than VND 5,384 billion to VND 1,328 billion.

The reasons for the increase in the total investment of the project are due to fluctuations in the exchange rate during the payment process for the implemented volume; due to adjustments in the volume of contract work; delays in progress that cause the contract period to be extended and additional costs; additional unforeseen missing work; changes in regimes, policies (reserve rates, taxes) and State regulations related to determining and managing costs (adjusting site clearance costs, insurance, etc.).

Regarding the reason for extending the implementation time, the Hanoi People's Committee pointed out four subjective reasons, including the direction, management and operation of the city's departments and branches are not yet resolute; delays and obstacles in site clearance and relocation of technical infrastructure; the implementation capacity of the investor and the coordination between consultants, investors, departments and branches of the city are still limited; the capacity of Hanoi Construction Corporation (Hancorp) as the contractor implementing the CP05 package - Depot architectural works is limited.

In addition, five objective reasons for the prolonged project implementation time were also mentioned, including difficulties related to the differences between the provisions of the FIDIC contract and current Vietnamese law; regulations on the allocation of Vietnam's ODA capital plan and regulations of the sponsor; difficulties related to standards, norms, unit prices, prices of materials and equipment specialized in urban railways; complicated mechanisms, policies and regulations on site clearance and the impact of the Covid-19 pandemic.

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