|A view of Cat Linh - Ha Dong urban railway section in Hanoi.
Nguyen Chi Dung, Minister of Planning and Investment, made the explanation during a Q&A session chaired by the National Assembly (NA) Standing Committee this week.
Phan Thai Binh, an NA deputy from the central province of Quang Nam, claimed that the execution of five urban railway projects in Hanoi and Ho Chi Minh City (HCMC) funded by official development assistance (ODA) loans has been sluggish while these projects saw an increase of combined VND80 trillion (US$3.44 billion) in their total capital.
Binh raised concerns regarding how best to handle the delayed progress and capital adjustments and questioned whether the relevant ministries take responsibility for these issues or not.
Given this, Dinh Tien Dung, Minister of Finance, said that the ministry had merely made negotiations for signing ODA loans while the approval, adjustments, and capital allocation of these projects has been realized by the Ministry of Planning and Investment.
The much-delayed progress and capital adjustments to the projects are initially attributed to the investors while relevant ministries and sectors also take joint responsibility.
Minister Nguyen Chi Dung noted that the deferred progress had been caused by the fact that the urban railway projects are the first to be executed in Vietnam, elaborating that domestic stakeholders all lacked both experience and capability, thus failing to meet project requirements.
Indeed, ODA serves to attract the world’s cutting-edge technologies and experience in conducting investment projects nationally. Foreign contractors and consulting units are in charge of preparing the projects and relevant procedures, while State management agencies play a part in scrutinizing and approving them.
“We were unable to foresee all the processes of these projects, hence leading to large adjustments made to the total investment capital of these projects,” Nguyen Chi Dung elaborated.
Ben Thanh - Suoi Tien metro line section, the first of its kind in HCMC, saw its total capital increase by VND30 trillion (US$1.29 billion) to VND47 trillion (US$2.02 billion). In addition, the total investment capital of the second metro line has been adjusted from VND26 trillion (US$1.11 billion) to VND47 trillion.
Elsewhere, Cat Linh - Ha Dong urban railway section in Hanoi has undergone additional capital adjustments worth up to VND50 trillion (US$2.15 billion).
Minister Nguyen Chi Dung explained that these capital adjustments were caused by shortcomings in calculating the exact total capital which should have been needed for the projects.
The delayed progress and additional extensions to the projects had resulted in additional costs, he admitted.
Meanwhile, capital adjustments also raise thorny issues regarding the allocation and approval of further capital and the re-lending amount of HCMC and Hanoi.
Preparations to approve capital adjustments on the metro line projects in HCMC are underway. These adjustments would be made in line with instructions by the Ministry of Planning and Investment and the Ministry of Finance. This adjusted capital has been added to the medium-term public investment capital plan, thus enabling the further implementation of such projects in the near future.