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Home English News Ho Chi Minh City seeks $92mn loan from state funds for metro

Ho Chi Minh City seeks $92mn loan from state funds for metro

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The administration of Ho Chi Minh City has sought permission from Prime Minister Nguyen Xuan Phuc to borrow VND2.15 trillion (US$92.9 million) from the central government to pay contractors who are building Metro Line No.1, the first of such system in the southern metropolis.

The payment will help the project run in line with the plan, and it would help to avoid complaints and lawsuits about debts, the municipal chairman Nguyen Thanh Phong said in a petition recently submitted to the premier.


An aerial view of the Metro Line Number 1 project in Ho Chi Minh City.
(Photo: Quang Dinh / Tuoi Tre)

The metro line connects Ben Thanh Market in District 1 and Suoi Tien Theme Park in District 9.

The development of the Ben Thanh - Suoi Tien metro line began in 2007 using official development assistance (ODA) loans from Japan.

It is estimated to cost VND47.3 trillion (US$2 billion), and will be capable of transporting 620,000 passengers per day upon completion, taking pressure away from the city’s crowded public transport system that is overly dependent on buses.

However, since October 2017 the project has not received any budget disbursement due to late approval of an adjusted investment plan.

If Ho Chi Minh City is to receive money from the central government, chairman Phong said the loan would be cleared once the Ministry of Planning and Investment provides fund for the project.

If the government cannot provide the requested money from the central budget, Phong suggested the prime minister should allow the city to use the funds from the municipal budget for the metro.

According to current regulations on advance payments for investment projects, the Metro Line Number 1 project does not meet requirements to get money in advance from the city’s budget, and can only receive funds from the central government’s budget, according to the official Vietnam News Agency.

“Due to the urgency of the project, Ho Chi Minh City hopes to receive approval from the prime minister,” Phong said in his letter.

According to Vietnam’s capital plan for the 2016 -20 period, the metro project in Ho Chi Minh City was expected to receive VND7.5 trillion ($324 million) of the initial total investment capital of VND20.5 trillion ($885.8 million).

In 2016 and 2017, VND2.7 trillion ($116.7 million) was disbursed for the project. However, in 2018, as the total investment was expected to increase, no additional funds could not be provided until the additional investment was approved.

(Tuoi Tre News)

 

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