In order to ensure that work on Saigon's first metro line continues, the city's administration has approved an advance payment of US$51.7 million for the project's contractors.
Tuoi Tre reports that Nguyen Thanh Phong, the municipal chairman, gave the payment the green light since the city is still waiting for official development assistance (ODA) provided by Japan to be released by the central government.
Just last week the Japan International Cooperation Agency (JICA), which coordinates Japanese financial assistance in Vietnam, expressed its frustration at the slow pace of funding disbursement for the long-delayed, over-budget metro line.
Japan has already sent this ODA to Vietnam, but it has not made its way to the contractors working on the project. Rumors regarding construction being put on hold have swirled recently since companies have gone unpaid.
The much-needed payment, Tuoi Tre shares, will finance overdue funds owed to contractors for the months of September and October. The Management Authority of Urban Railways (MAUR), the Vietnamese body tasked with overseeing the metro line, says the city needs US$240 million for metro-related costs for the whole of 2017, yet only US$93 million of this amount has been allocated.
The news source adds that this is the third time Saigon has had to advance money to contractors working on the line, which is not sustainable for the city's budget. The only permanent solution is for the National Assembly to approve the project's total budget, which has ballooned from US$1.4 billion in 2008 to US$2.5 billion.
Once this approval is granted, the ODA currently tied up by red tape can be disbursed to Saigon.
Metro line 1 is still scheduled to begin operations in 2020, but such financial problems may push this date back further.
[Photo via Tuoi Tre]
