10:43 | 25/11/2015 Investment
Additional loan agreements have been signed for the Hanoi train station-Nhon urban metro rail project, announced Nguyen Quang Manh, Director of the project's management board at a recent meeting with the Ministry of Transport.
Construction site of the Hanoi train station - Nhon urban metro rail project in Cau Giay district (Photo: VNA)
The project had initially received investment capital of 783 million EUR (733 million USD). However, after several years of construction, this investment capital has been adjusted to more than 1.17 billion EUR (1.09 billion USD), an increase of nearly 400 million EUR (374 million USD).
Therefore, the board has signed the additional loan agreements with sponsors to get more money for the project, Manh said, adding that the concerned ministries are obliged to report the increase in the project's investment capital to the Government.
According to representatives of the sponsors, the slow progress of site clearance might be among the reasons for the situation.
Deputy Minister of Transport Nguyen Hong Truong said site clearance and arrangements for resettlement are very difficult as the urban railway passes most of the city's residential areas. Therefore, sponsors should consider the problem carefully and handle it properly.
Until the adjustment in investment capital is verified, the Nam Thang Long-Tran Hung Dao urban railway has been asked to pause construction.
The project was approved in 2008, and construction began in December 2013, with an estimated investment capital of 19.5 trillion VND (858 million USD). However, the project has yet to be implemented, as it is still awaiting approval for the increase in its investment capital to 51.7 trillion VND (2.2 billion USD) from the Ministry of Planning and Investment.
Manh said the delay in receiving the ministry's approval has prevented the project from finding financial sources. By the end of next year, the loan agreement with JICA, the main sponsor of the project, will expire.
He added the Ministry of Planning and Investment has hired a consulting firm to evaluate the projects and plans to release the official report on the situation next April./.