|Trains on the Cat Linh-Ha Dong urban railway (Photo: VNA)
The 250 million USD loan is due for repayment despite the fact the project has not been completed.
The outstanding repayment for this year alone is 152.7 billion VND (6.75 million USD).
Under the financial mechanism approved by the Government, the Ministry of Transport was required to allocate reciprocal capital to pay back the loan and expenses while the project was under construction.
Accordingly, the ministry had set aside 400 billion VND (17.2 million USD) from the project’s total investment for the debt repayment. Vietnam has already repaid over 398 billion VND (17.1 million USD) of that figure over the last nine years, leaving only 1.95 billion VND (82,819 USD).
The 6.75 million USD is due to be paid in two instalments on January 21 and July 21.
The project's management board has proposed a payment postponement until the project is completed and handed over.
The board has also suggested the Government restructure the project’s total investment to remove difficulties for borrowers under the loan agreement.
However, the Ministry of Transport said that a postponement would create procedural difficulties.
It would also badly affect the nation's credibility and have negative consequences on the economy, according to the ministry.
On January 21, the Ministry of Transport submitted a plan to use the State budget to cover this year's payment.
The plan is awaiting approval from the Ministry of Finance and the State Treasury.
The Cat Linh-Ha Dong project started in 2008 and has missed its completion deadline several times.
At present, more than 100 Chinese experts and workers of the project who returned home for the traditional Lunar New Year holiday have yet to come back to Vietnam as China had restricted citizens from going abroad due to the coronavirus epidemic.
In a meeting late last month, Deputy Minister of Transport Nguyen Ngoc Dong asked relevant agencies to take measures to resolve the issue.
Meanwhile, the project’s contractors are suggested to resume work after February 8.