It is being said that Vietnam will be borrowing an additional US$250.62 million from China to compensate partly for the further capital needed to complete the Hanoi based urban railway project, Cat Linh-Ha Dong. The decision has come after the prime minister’s approval for borrowing funds.
Besides the approval for borrowing funds for the project, the prime minster has also agreed for adjusting the timing of completion of the project so that it will be operational commercially in 2016.
Vietnam’s Prime Minister Nguyen Tan Dung has asked the country’s Ministry of Transport to adjust urgently the capital required and coordinate with authorities to evaluate the adjustments that will be required to accord with law.
Based on that, the transport ministry will be required to organize for the funds that need to be arranged and supplemented from the side of Vietnam according to the schedule of the project.
Additionally, the ministry will also have to direct the contractor and developer of the project to actuate the work of implementation of the orders and set out a new disbursement schedule for borrowing the funds under the agreement of credit already signed by China.
The Hanoi based Cat Linh-Ha Dong urban railway project is built primarily with Chinese official development (ODA) loans granted under the Framework agreement signed between the Chinese and Vietnamese governments in May 2008.
The project commenced operations in October 2011, and received investments of nearly US$552 million, US$419 million of which was granted by the Chinese ODA. The developer of the project, the Vietnam Railway Authority, had proposed adjusting the overall investments for the project to US$868 million back in 2014. China Railway Sixth Group, a subsidiary of China Railway Group, is the engineering, procurement, and construction contractor for the project.