Cat Linh - Ha Dong project under review after price increase of 300 million USD

Deputy Prime Minister Hoang Trung Hai has requested clarification of the responsibilities of individuals and organizations that caused the Cat Linh - Ha Dong project to inflate its price by 300 million USD.

Deputy Prime Minister Hoang Trung Hai has just issued a document requesting the Ministry of Transport to coordinate with the Ministry of Planning and Investment and relevant agencies to work with Chinese partners to supplement ODA capital for the additional capital of the Cat Linh - Ha Dong railway project.

Deputy Prime Minister Hoang Trung Hai requested the Ministry of Transport and the Hanoi People's Committee to direct the review of causes and clarify the responsibilities of organizations and individuals regarding the limited quality of basic designs leading to adjustments, delays in site clearance, and prolonged construction time, increasing the total investment.

The Cat Linh - Ha Dong urban railway project (Hanoi) includes the following items: construction of 13 km of elevated railway, 1.7 km of access to the depot area, double-track railway with a gauge of 1,435 m, maximum speed of 80 km/h; equipped with 13 trains with 4 carriages, capacity of about 1,200 people, frequency of 2 minutes/trip. The project also includes 12 elevated stations, a 9-storey operating building in the 23-hectare depot area.

The main contract package of the project (design, supply of equipment, materials and construction) is carried out by China Railway 6th Group Co., Ltd. under the form of EPC general contractor.

The Cat Linh - Ha Dong urban railway project is 2 years behind schedule. Photo: Ba Do.

However, according to the Railway Project Management Board - the investor's representative, during the implementation process, there are a number of items that need to be supplemented, arisen and adjusted. The delay in site clearance prolongs the project implementation time and increases costs.

Specifically, the terminal was raised from 2 floors to 3 floors to add a functional room on the 2nd floor, to reduce the amount of land clearance and to allow each terminal to have an additional pedestrian overpass. This adjustment helped reduce the land clearance cost by 43 million USD, but increased the total cost by 84 million USD (the increase due to inflation and scale change).

The metro depot area in Ha Dong district has weak soil at a depth of 2 to 3 meters, but the consulting unit had no solution before. When implementing, the design consultant proposed to treat the soil at a cost of 13 million USD. The slow site clearance work along with the long relocation of technical infrastructure works also increased the cost of these items, so the investor proposed an additional 88 million USD.

Along with many other items that had to be changed such as adjusting the National Highway 6 bypass, ship hull material from climate-resistant steel to stainless steel, training costs, girder casting location and girder installation plan... increased the project cost by more than 10 million USD.

Fluctuations in raw material prices and policies over the years have also been assessed as inaccurate, so the Railway Project Management Board has proposed an additional budget of 95 million USD.

In total, the Ministry of Transport has proposed to the Prime Minister to adjust the investment level of the Cat Linh - Ha Dong metro project from 552 million USD to 891 million USD, an increase of 339 million USD.

After submitting the investment adjustment proposal to the Government, Deputy Minister of Transport Nguyen Hong Truong sent a document inviting the State Audit to conduct an inspection to rectify compliance with investment management regulations; handle problems and prevent major errors that could cause damage to the State.

The project has a total investment of 8,770 billion VND, equivalent to more than 552 million USD (2008 price), of which China's ODA capital is 419 million USD, credit capital is 169 million USD and Vietnam's counterpart capital is 133 million USD, the initial implementation period is expected from August 2008 to November 2013.

After adjusting the schedule, the Ministry of Transport announced the trial run of the Cat Linh - Ha Dong train from January 2015 and official operation from June 2015.

According to Hanoi Moi Online