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The times of increasing capital, delaying the progress of Nhon – Hanoi Railway Station

Nhon urban railway project – Hanoi station had at least 3 times to increase capital and delay the entire operation time due to delay in site clearance and construction.

The pilot urban railway line in Hanoi, the Nhon – Hanoi station section is 12.5 km long, including 8.5 km above ground and 4 km underground, passing through Bac Tu Liem, Nam Tu Liem, Cau Giay districts. Ba Dinh, Dong Da, Hoan Kiem. The project was first approved in 2006 with a total investment of 783 million euros, expected to be completed in 2010. This is the first urban railway to be deployed in Hanoi.





Hanoi starts construction of Nhon - Hanoi Railway Station in 2010. Photo: Tien Dung

Hanoi starts construction of Nhon – Hanoi Railway Station in 2010. Photo: Tien Dung

However, it was not until September 2010, on the 1000th anniversary of Thang Long – Hanoi, that the Nhon railway project – Hanoi station was started by the Hanoi People’s Committee. At that time, the total project investment was adjusted to 1,176 million euros, the completion plan was delayed to 2015. Thus, the total adjusted investment of the project increased by 393 million euros (about 10,000 billion dong). .

After 3 years, the urban railway project that is expected by the people of the capital is still “immovable”. The areas with railways and stations running through have not been started yet, only the central station area, operator, repair … has begun to be built on an area of ​​15 hectares in Nhon. At the end of 2013, the first 4 elevated stations located on National Highway 32 were just started to be built.

The leader of the Hanoi Urban Railway Project Management Board (MRB) explained that the project passed through many monuments, residential areas, underground and floating works that had to be relocated, so the site clearance was complicated. The slow approval of the underground stations also affects the progress. The construction work was slow in the main bidding packages, typically the package No. 1 in the depot area, the investor has repeatedly changed the construction unit due to poor capacity, causing the project to be delayed until the end of the year. 2018.

By the time of completion in 2018, the project had only completed 41% of the work volume. The Hanoi People’s Committee has to adjust the total progress of the project, lasting from December 2018 to the end of 2022.

The project is behind schedule due to both subjective and objective reasons, such as the limited capacity and management experience of the investor for large projects. Contract management with Systra consulting is still inadequate. Annual ODA capital is not allocated enough, leading to delay in payment to contractors and affected construction progress.





The house at 23 Quoc Tu Giam (construction area of ​​underground station S11) was slow to clear, causing the contractor to claim compensation.  Photo: Giang Huy

The house at 23 Quoc Tu Giam (construction area of ​​underground station S11) was slow to clear, causing the contractor to claim compensation. Image: Giang Huy

Most recently, on May 19, MRB said it had submitted to the Hanoi People’s Committee to adjust the investment policy of the Nhon railway project – Hanoi station. Specifically, the elevated railway section will be exploited and operated in 2022, while the whole line will operate in 2027, completing the settlement in 2029. The total proposed project investment is VND 34,530 billion, increased by 4,905 billion VND (202.81 million Euro).

According to the leader of MRB, the adjustment was due to fluctuations in the exchange rate (Euro to Vietnam Dong) during the payment of construction volumes. At the same time, the project needs to adjust the design and technical requirements to match the actual construction and the two-phase operation plan.

Recently, the railway project encountered 5 groups of problems. The first is the prolonged impact of the Covid-19 pandemic, which delays and disrupts production, imports of equipment and mobilizes experts from Europe, leading to prolonged equipment bidding packages and increased costs. The second is the delay in site clearance and technical infrastructure relocation to hand over the clean ground to the construction contractor, typically there are bidding packages that are 5-6 years behind the plan.





The Nhon - Cau Giay elevated section has been tested.  Photo: Ngoc Thanh

The Nhon – Cau Giay elevated section has been tested. Image: Ngoc Thanh

Third, the extension of the contract period and additional costs due to the extension of time lead to disputes with international contractors, causing difficulties for Vietnamese management agencies. The fourth is the problem related to the adjustment of the Systra consulting contract (package contract). Other issues related to regulations and standards on norms, unit prices, prices of materials and equipment specialized in urban railways.

Because of the above problems, up to now, up to 9/10 bidding packages need to sign extension and additional costs due to the extension of time.

The slow progress of handing over the site caused the Nhon – Hanoi railway project to be compensated twice by the contractor. In July 2020, Dealim Korea Co., Ltd., the construction and installation unit of the elevated section (CP1 package) requested more than 400 billion VND (19 million USD). The reason given by the contractor was that the construction site was received a year and a half later than the commitment in the contract, leading to the need to extend the construction period for more than 2 years.

In mid-2021, the joint venture contractor Hyundai – Ghella (HGU) requested compensation of 114.7 million USD due to the delay in handing over the site of S11 – Van Mieu station. HGU proposes to accept the payment, otherwise it will not be able to continue work and proceed with the complaint procedure to international arbitration.

Currently, the progress of the project is over 74% and the upper section is nearly 95%. The elevated section of the project will be completed and put into commercial operation in December.

Mr Duy

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