“Hanoi Proposes a 35,588 Billion VND Budget for the Construction of a 11.5 km Metro Line from Nam Thang Long to Tran Hung Dao”

Hanoi Metro Line 2: Nam Thang Long – Tran Hung Dao

The Hanoi People’s Committee has submitted to the Government for approval, an adjustment to the investment policy for the construction project of Hanoi’s Urban Railway Line 2, Nam Thang Long – Tran Hung Dao section.

This is the fourth proposal for adjustment since the Ministry of Planning and Investment completed the report on the appraisal of the adjustment of the investment policy for the project in May 2021 and the agreement of the Government Office on the underground station C9 mentioned in Official Dispatch No. 328/TB-VPCP dated October 14, 2022. Since the beginning of 2024, Hanoi has proposed adjustments three times.

In the latest proposal (Proposal No. 275, issued on August 12, 2024), there are three main contents of the project that the Hanoi People’s Committee proposed to the Prime Minister for adjustment.

The first adjustment relates to the main construction scale of the project. In Proposal No. 275, the total length of the route is proposed to be 11.5 km, including 8.9 km of underground section and 2.6 km of elevated section; the transport means include 10 trains with 4 carriages each.

Compared to Decision No. 2054 of the Hanoi People’s Committee approving the investment project (dated November 13, 2008), the total length of the route remains the same, but there are changes in the length of the elevated section (increased from 8.5 km to 8.9 km) and the underground section (reduced from 3 km to 2.6 km); the number of trains has been reduced from 14 to 10.

The second adjustment is the preliminary total investment of the project, which is proposed to be adjusted to VND 35,588 billion (equivalent to JPY 200,744 million), an increase of VND 16,033 billion compared to 2008.

Of this, the ODA loan from the Japan International Cooperation Agency (JICA) under the special borrowing conditions for economic partners is JPY 167,079 million, equivalent to VND 29,672 billion, an increase of VND 13,187 billion; the counterpart capital from the Hanoi city budget is VND 5,916 billion (equivalent to JPY 33,665 million), an increase of VND 2,846 billion.

For the ODA loan, the Hanoi People’s Committee will re-lend 57%, and the central budget will allocate 43%. For the counterpart capital, the Hanoi People’s Committee is responsible for arranging the entire amount.

The third adjustment is the new implementation period of the project, from 2009 to 2031. The Hanoi People’s Committee aims to complete and put the project into operation and operation in 2029 and will need an additional 2 years for operation and maintenance training, instead of completing it in 2015 as initially planned.

According to the Hanoi leadership, due to the prolonged process of adjusting the investment policy for the project (including the adjustment of the position of station C9, changes in regulations on public investment and debt management…), the implementation period of the project needs to be adjusted to suit the current reality.

In terms of capital arrangement for the project, the Hanoi People’s Committee proposed to the Government to approve the capital allocation for the project through 3 medium-term public investment periods to match the adjusted period of the project. Accordingly, in the period 2021-2025, it is expected to allocate about VND 9,223 billion; in the period 2026-2030, about VND 19,929 billion; and in 2031, about VND 5,581.5 billion.

The Law on Public Investment 2019 does not have specific legal provisions on the balance and allocation of medium-term public investment capital in 2 consecutive terms. However, the Hanoi leadership affirmed that the capital plan for each medium-term public investment period mentioned above is suitable for the items of work expected to be implemented according to the progress of the adjusted project.

The city will propose to the Prime Minister to allow the implementation and report this content to the National Assembly on the implementation of the Project at the end of 2024 as prescribed in Article 104 of Decree No. 29/2021/ND-CP of the Government on the order and procedures for appraisal of important national projects and supervision and evaluation of investment and update it into the draft decision on the investment policy for the project.

If approved by the competent authority, the Hanoi People’s Committee ensures that the total investment and the source of ODA capital and the city budget capital will not exceed the approved adjusted investment policy for the project.