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Saigon's Metro Construction May Be Delayed Due to Financial Setbacks

Two of Saigon’s largest infrastructure projects – including the high-profile Metro Line 1 and an environmental facility – might be delayed in the near future due to insufficient funds.

The management board of Saigon’s metro project recently submitted a report on the progress of Line 1, which will connect Ben Thanh Market with District 9, to the Ho Chi Minh City People's Committee, reports Tuoi Tre. According to the report, the total amount of official development assistance funding (ODA) earmarked for metro construction is VND41.8 trillion (roughly US$1.8 billion).

However, the report also noted that since September of last year, contractors for the project haven’t received enough funding from the central government to continue their work. The Ministry of Planning and Investment budgeted VND2.1 trillion (US$92.4 million) of ODA this year for metro construction, while it is estimated that contractors might in fact require as much as VND5.4 trillion (US$237.6 million).

Meanwhile, the second phase of another project, an effort to improve Saigon’s water quality, might require up to VND1.6 trillion (US$70.4 million), while the budget planned by the ministry only allows for VND1.2 trillion (US$52.8 million), according to the news source.

Therefore, since the third quarter of 2016, the city has been using its own money to fund the aforementioned projects. However, the lag in disbursement in the long-term might lead to further delays down the line, as contractors will slow down progress until they receive payment for completed work.

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