Contractors are threatening to walk off the job unless they’re paid on time.
Ho Chi Minh City’s first metro line is likely to be delayed because the city has failed to pay contractors on time, a result of slow investment disbursement from the finance ministry, a city official said.
HCMC now owes contractors VND1,339 billion ($58.9 million) for the first phase of the line, which runs 20 kilometers from Ben Thanh Market in District 1 to Suoi Tien Park in District 9.
“The has city pushed contractors to complete the work as scheduled, but in return they want to be paid on time,” Le Nguyen Minh Quang, director of the HCMC Urban Railway Management Board, said. “The city has asked for funds to be freed up, but higher authorities have not responded.”
Construction of the line started in 2012 and is estimated to cost $2.49 billion by the time it is completed in 2020.
Last September, the finance ministry cut official development assistance (ODA) funding in September, saying ODA disbursement in the first nine months exceeded the amount set for the whole year.
Before the Lunar New Year, which fell in late January, the city had to make an advance payment of VND900 billion ($40 million) so that contractors could pay their workers, Quang said.
It will need more than VND5.4 trillion ($237 million) for the line this year, but the ministry has only allocated VND2.1 billion.
“Investors are unhappy with the situation because they are funding the project but the city isn’t paying them,” said Quang.
Some contractors have suggested delaying construction or even downing tools if payments are not made on time.