HCMC to fund 2nd metro line with state budget instead of foreign loans

Ho Chi Minh City will proceed with the construction of Metro Line No. 2, spanning over 11 kilometers, using the state budget rather than the previously planned official development assistance (ODA) loans.

The implementation plan for the Ben Thanh – Tham Luong metro line was outlined in a conclusion issued by the Standing Party Committee of the HCMC People’s Committee on Monday.

This will be the city’s second metro project, following Metro Line No. 1 (Ben Thanh – Suoi Tien), which is set to begin passenger service on Dec. 22.

The committee has approved the use of the city’s budget to fund the remaining phases of the project, and plans to include an additional connection between the second metro line and the first line in District 1.

The city government will oversee coordination between the Management Authority for Urban Railways (MAUR), the project manager, and other relevant parties to finalize the implementation plan.

To prepare for the implementation, the HCMC State Financial Investment Company has been tasked with collaborating with the Department of Finance and other relevant agencies to explore appropriate funding options. A report on this plan must be submitted to the HCMC People’s Committee by Nov. 30.

The Ben Thanh – Tham Luong metro project is estimated to cost nearly VND47.9 trillion (US$1.8 billion), covering over 11 kilometers, with more than 9 kilometers underground and the remaining section elevated.

Originally, the project was to be funded through ODA loans from the German Reconstruction Bank (KfW), the European Investment Bank, and the Asian Development Bank.

The committee has not declared the reason for a change in the source of funding, but a recent report from the MAUR indicates that securing financing for the project has been challenging due to changes in the loan conditions from international lenders.

The new metro line will pass through six districts: District 1, District 3, District 10, District 12, Tan Binh, and Tan Phu, connecting the city center to the northwest gateway. The project, approved over a decade ago, has undergone several adjustments and is now expected to be completed by 2030.

By Gia Minh – VnExpress.net – November 25, 2024