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Saigon Authorities Cut $147m From Metro Line 1’s Cost

Work on the first metro line is 75% complete.

On November 13, the Ho Chi Minh City People’s Committee announced that they have approved the cost adjustment for Saigon’s first two metro lines, VnExpress reports. Under the new budget, the cost for the first line will be reduced by US$147 million. The second metro line's cost will remain the same. 

Vo Van Hoan, deputy chairman of the People’s Committee, said that after examining all the categories and their budget allocation, the committee decided to remove unnecessary elements to lower the cost.

"The total investment capital has been greatly reduced, but this does not affect the quality of the (construction) packages. The project is 75% complete, so all major variables are basically identified and there is very little chance of costs ballooning," he said. Hoan also added that trains for the line are expected to arrive in 2020. An urban railway company for the first line has also been established and the city is conducting staff recruitment and training.

It should be noted that even with this reduction, the current approved cost of the first line, which is now US$1.88 billion, is a massive increase from the US$750 million budget when the project was approved in 2007. 

Documents for the new adjustments have been sent to the People’s Council for approval. After the new adjustments are approved by the council, they will be forwarded to the central committee, who will disburse funds.

Due to the paperwork involved, the money won't arrive until March and April next year. Thus, the People’s Committee will use its own funds to make advance payments to investors, contractors and workers so that work on the first line can continue. This will be the fourth time the city's authorities have had to make advance payments for the project, with the previous advances totaling US$215 million.

[Top photo: Saigon's Metro Line 1, as seen under construction in 2017.]