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Ho Chi Minh City Metro almost stopped construction

In a letter to the Secretary of the Ho Chi Minh City Party Committee, Ambassador Extraordinary and Plenipotentiary of Japan Umeda Kunio confirmed that the project will be forced to stop construction if the debt of more than 100 million USD is not paid…

“Money has not been given, porridge… still spooning”

According to Ambassador Umeda Kunio, the construction management consulting contract for the metro line 1 project of the NJPT consultant consortium expired in April 2017. However, the consulting contractor was forced to carry out consulting work without pay for the past 19 months.

It is worth mentioning that although the Ho Chi Minh City People’s Committee has established a working group to re-sign the contract under the direction of Deputy Chairman Tran Vinh Tuyen, the above study and review of contract modifications has not made any progress. . To date, the number of late payments by NJPT contractors has reached 20 million VND USDthat affect this contractor’s payments to other contractors.

Meanwhile, the CP2 package built by the Sumitomo – Cienco4 contractor consortium was delayed due to ground clearance issues, so the construction of this contractor consortium exceeded the package completion date under the current contract (January 2018). This responsibility does not lie with the contractor but the Department Finance again gave the opinion that they could not pay the construction costs after the contract completion date according to the contract, so the payment of construction costs starting January 1, 2018 was stopped. In addition, starting in 2018, bid packages must be approved by the Ministry of Transportation for designs. Construction of the auction package is still ongoing, but payments for the volume of work completed have been stopped.

In late June 2018, the Ho Chi Minh City People’s Committee directed the Urban Railway Management Agency (MAUR) to sign a Memorandum of Understanding, an advance of 80% but not yet implemented.

Speaking to PV Tien Phong, a representative of the Shimizu-Meada contractor consortium construction package 1b (please not named) said that to date, the construction volume of package 1b has reached about 70% with two tunnels. install the equipment, but MAUR has not paid the contractor any money. Shinmizu Corporation (Japan) had to make an advance of 80 million USD (over 1,600 billion VND) to maintain the development package.

“People think because the project lacks capital, there is no money to pay contractors, but that’s not the case. The biggest problem is that although the Ho Chi Minh City People’s Committee is willing to make an advance, in 2018 it has advanced VND 1,000 billion, but MAUR only paid VND 220 billion to the contractor. MAUR has money in his pocket but does not pay. The general consultant’s NJPT contract ended. Ho Chi Minh City negotiated the extension 5 times, each time taking 3-4 months but to no avail”, said a representative from the Shimizu-Meada contractor consortium.

More than 100 million USD overdue payment: Ho Chi Minh City Metro almost stopped construction - 1

Package 1b has completed about 70% of the volume, but so far HCMC has not paid contractors

Pressure for contractors

Speaking with PV Tien Phong, Ho Chi Minh City People’s Committee Deputy Chairman Tran Vinh Tuyen said that if he wants to pay for the general consultation contract, he must extend the contract, in particular by signing a contract addendum to extend the time. before the treasury will allow him to pay the contract.

“MAUR at that time was worried that contract renewal would incur a lot of other costs, so he refused to sign, but specifically Mr Le Nguyen Minh Quang did not sign. The contract attachment only extended the time of payment through the treasury and all other content remained unchanged, but Quang also refused to sign. The treasury said that the Financial Auditor had entered work and was allowed to disburse according to the contract attachment. When the contract expires, it must be renewed. It’s just like that, so we have to wait for the new department head to finish it,” said Tuyen.

In a recent letter to City Party Secretary Nguyen Thien Nhan, Japanese Ambassador Umeda Kunio stated: “The pressure on contractors has also reached its limit. If this issue is not resolved by the end of December, I regret that the project will be forced to stop construction.”

According to Ambassador Umeda Kunio, the metro line No 1 project has been implemented with Japan’s ODA loan since 2007. The delay in approving the adjusted investment decision resulted in the project not being allocated by the Vietnamese Government the budget allocation from October 2017 . Meanwhile, the Ho Chi Minh City People’s Committee has committed to prepay the city budget until the central government allocates a budget for the project. However, this has not yet been implemented even though the Ministry of Construction has written an opinion on the possibility of paying construction costs even after the completion date of the contract package.

The Japanese Ambassador asked Ho Chi Minh City to direct relevant parties to speed up procedures so that they immediately resume paying construction costs from January 1, 2019 to contractors. As of the end of October 2018, the amount of late payments for construction contractors and consulting contractors has reached more than 100 million USD.

Untie the knot: Will pay before Tet…

In response to Ambassador Umeda Kunio, Ho Chi Minh City People’s Committee Chairman Nguyen Thanh Phong promised to expedite the process of prepayment of VND 450 billion for the contractor of the metro project No. 1.

In a meeting with the Permanent Deputy Minister of Foreign Affairs of Japan Toshiko Abe on the afternoon of January 18, President Nguyen Thanh Phong acknowledged that the project encountered several problems related to procedures such as contract renewal and the legal status of the joint venture. appraising, approving, completing projects… resulting in delayed payments to Japanese contractors. Pending capital adjustments, the city government will advance capital from the budget to pay for the volume of work carried out by contractors in 2018 and early 2019, around more than 2,000 billion VND.

“The city government will try to pay off debts that have not been repaid before the Lunar New Year (before February 1) and try to speed up payments and resolve unfinished problems to ensure that the interests of contractors are completed as projects by the end of 2020,” said Pak Phong.

Addressing the goodwill of the Chairman of the Ho Chi Minh City People’s Committee, Japan’s Deputy Foreign Minister said that Phong’s commitment to disbursing funds before Tet “is a meaningful New Year’s gift to the Government and other stakeholders.” company Japan”.

Recently, the new head of MAUR Department Bui Xuan Cuong has proposed to the Ho Chi Minh City People’s Committee to advance (phase 1, 2019) VND 2,248 billion of the budget to pay and advance 80% to contractors who have carried out work in 2018. .

Many key MAUR personnel are back at work

After the Ho Chi Minh City People’s Committee dismissed Mr. Le Nguyen Minh Quang from the position of Chairman of the MAUR Committee and appointed Mr. Bui Xuan Cuong, Director of the Department of Transportation as the new Head of the Department, many key personnel who previously applied for leave withdrew their applications and returned to normal work. In particular, Mr. Duong Huu Hoa, Chairman of the MAUR Labor Union, Director of the Project Management Unit 1 MAUR returned to work. Previously, Mr. Hoa resigned from his job on the grounds that he would seek treatment. Mr. Phan Nhat Linh, Head of MAUR’s Contract Planning Department is also working as usual.

According to Huy Thinh (Tien Phong)

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