Domestic private conglomerates want to invest in subway systems
Hanoi’s Mayor Nguyen Duc Chung said three Vietnamese large construction and real estate conglomerates - Vingroup, Xuan Thanh and Lung Lo Groups - have expressed their willingness to invest in the metro system in Hanoi.
Deputy PM Trinh Dinh Dung said it was necessary to call for domestic investment
Under the overall capital city development plan by 2030 with the vision until 2050, Hanoi’s urban railway network will consist of eight routes with the total length of 318 kilometers. Currently, Hanoi is building two of them – the Cat Linh – Ha Dong and Nhon – Hanoi Station.
It will require huge resources to develop the city’s urban rail system. The eight routes as planned are estimated to cost VND890 trillion, or $40 billion, if considering the average cost VND2.2-3 trillion per kilometer.
At a working session with the city’s departments’ leaders on February 4, 2017, Deputy PM Trinh Dinh Dung, when mentioning the solutions to accelerate the implementation of the two projects on Cat Linh – Ha Dong and Nhon – Hanoi Station routes, said it was necessary to call for domestic investment for the projects.
With experience from implementation of the two urban railway projects, Dung wants agencies to work on a mechanism to enhance the mobilization of domestic and foreign resources instead of ODA (official development assistance) capital for other projects.
He emphasized that it is necessary to create most favorable conditions for Vietnamese conglomerates to contribute to the projects’ implementation in order to increase localization, reduce construction costs and promote Vietnamese enterprises’ capacity.
Tri Thuc Tre quoted Hanoi’s Mayor Nguyen Duc Chung as saying that the municipal authorities have received the proposal from three Vietnamese corporations to join the subway projects.
“Hanoi will report the case to the government to consult on the issue,” Chung said.
Deputy PM Dung applauded Hanoi’s idea of mobilizing domestic resources for the other six urban railway routes, saying that it is not easy to seek foreign capital for infrastructure development.
Dung said that it will be less costly to implement the projects with the contribution of Vietnamese corporations. Vietnam needs to buy carriages and equipment from other countries, but it is quite able to build tunnels, set up rails, pillars, foundations and stations.
The implementation of both the Cat Linh – Ha Dong and Nhon – Hanoi Station routes is being carried out by foreign contractors, from South Korea and China. However, both of them are running more slowly than expected, while the required capital has increased from the initially planned rate.
The Cat Linh – Ha Dong subway project kicked off in October 2011 and is expected to become operational in 2016. However, in the latest news, it will only be put for commercial exploitation by early 2018.
The Nhon – Hanoi Station would become operational by 2021, four years later than initially expected.
Kim Chi, VNN