Slow site clearance raises costs of Ho Chi Minh City’s 2nd metro line
The site clearance work for the second metro line project in Ho Chi Minh City is being conducted at a snail’s pace, resulting in an increase by VND68 billion (US$2.8 million) in costs per year, according to the Ho Chi Minh City Management Authority for Urban Railways (MAUR), the investor of the project.
MAUR has reported the execution of the metro line, connecting Ben Thanh Market in District 1 and Tham Luong Depot in District 12, to the municipal People’s Committee.
In particular, districts where the metro line will pass through have handed over 86.69 percent of the site for the project.
Since early 2021, the progress of the work has slowed down due to obstacles in District 3.
Some households in the district have yet to hand over their land lots as they do not accept the compensation, affecting the compensation and resettlement work.
The slowness raises the costs of the project by VND68 billion ($2.8 million) per year due to loan interest, fees, and price escalation.
Under a decision on the compensation and resettlement for the metro line project, District 3 has some VND268 billion ($11.2 million) left for the increased costs.
If the progress remains slow, the project may face cost overruns.
The second metro line in Ho Chi Minh City was designed to stretch 11.3 kilometers, passing through six districts of 1, 3, 10, 12, Tan Binh, and Tan Phu.
It will include a 9.3-kilometer underground section and two-kilometer elevated section, with 11 stations, upon completion.
The project will require an estimated cost of over VND47.89 trillion ($2 billion), including VND4.1 trillion ($171 million) for site clearance and resettlement, and a total space of more than 251,100 square meters, and affect 603 households.
The metro line construction commenced in 2010 and was expected to be put into commercial operation in 2016.
However, the deadline for the completion of the project was delayed many times before the Ho Chi Minh City People’s Committee proposed extending it further to 2030 in July last year.
An office building and ancillary works at the Tham Luong depot in District 12 have been finished.
By Thanh Ha & Duc Phu – Tien Long – Tuoi Tre News – August 26, 2023