Capital disbursement for Cat Linh-Ha Dong railway project must be in line with EPC contract

Hanoi (VNA) – The Ministry of Transport (MoT) will allocate the funding for the Cat Linh-Ha Dong urban railway project to its main contractor, in line with the signed Engineering-Procurement and Construction (EPC) contract, Deputy Minister of Transport Nguyen Ngoc Dong has said.

Dong told the Vietnam News Agency (VNA) that the main contractor asked for 50 million USD for the line’s trial run during recent online meetings with the Railway Management Board.

Documented requests for the payment will also be rejected if they run counter to contract regulations, he stressed.

According to a representative from the Railway Management Board under MoT – the main investor of the Cat Linh-Ha Dong urban railway project – the contractor requires 50 million USD for the test run and seeks the payment ahead of handover.

The amount is included in the total investment and is not extra spending, the representative added.

However, the project investor was of the view that any payment should be in accordance with the EPC contract. The two sides will therefore continue to further study the terms of the contract for 15 days and then meet for further discussion.

More than 14.37 trillion VND (621 million USD), or 81.9 percent of the total investment capital, has been disbursed to date.

According to a Government report to the National Assembly, the project has been basically completed but has not met requirements to be handed over and put into operation.

There remain bottlenecks regarding equipment, technologies, safety assessments, and financial matters.

The Railway Management Board said that due to the COVID-19 pandemic, only four senior experts from the contractor are now in Vietnam. Another 150 staff of the Chinese contractor are scheduled to return to Vietnam in early June.

Despite 99 percent of the workload being completed, the project’s commercial operations have experienced multiple setbacks and been delayed eight times since construction began in 2011.

The 13.5-km-long railway line, from Cat Linh in Ba Dinh district to Ha Dong district of Hanoi, has a total investment capital of approximately 886 million USD after several adjustments, funded by Chinese ODA.

Trains will run at a maximum speed of 80 km/h, with an average speed of 35 km/h, and will set out every two minutes.