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Vietnam Economic News

Vietnam Business » Vietnam Economic News » City suggests German investors do EPC for subway project

City suggests German investors do EPC for subway project

The HCMC chairman on Tuesday proposed German investors play their role as an EPC (Engineering, Procurement and Construction) contractor in a subway project in the city as one of the measures to ensure quality integrity for the project.

Le Hoang Quan made the suggestion at a meeting with German Minister for Economic Cooperation and Development Dirk Niebel and members of his entourage at the City Hall on Tuesday evening. V? tr' d?t qu?ng c'o Quan said the city government expected the project's key lenders, namely the Asian Development Bank (ADB), the German bank KfW and the European Investment Bank (EIB), would take into account the proposal for the 10.2-kilometer subway route. The Ben Thanh-Tham Luong route, better known as Subway No. 2, requires some US$1.25 billion or more and will link downtown HCMC with the outlying District 12. The ADB, KfW and EIB will provide official development assistance (ODA) loans for construction and equipment, while HCMC's State budget will be used as counter capital for site clearance. Quan said German companies had much experience in subway development so the city wanted them to work with their partners to complete development of rails, carriages and lighting systems and other components of the project before handing it over to the city. In return, the German minister pledged support for the subway project and said that the German side was waiting for the project to get off the ground in the city soon. The HCMC chairman said Vietnam's Ministry of Planning and Investment would preside over a meeting in Hanoi next week to appraise the second subway and would work with the key lenders and relevant agencies over preparations for the project. Quan released the news after working with relevant agencies over metro development in the city in the morning of the same day. In January, the HCMC Urban Railway Management Unit reported that loan agreements for the second subway line was scheduled for signing this year. Quan said the HCMC government was focusing on subway development as a solution to ease traffic congestion in the city of more than nine million people. A development master plan applicable till 2020 envisages seven subway lines with a combined length of 107 kilometers costing more than US$6 billion in the economic hub of Vietnam. Work began on a depot for the first urban rail line linking Ben Thanh Market in downtown area and Suoi Tien Park in District 9 on February 2008. This 19.7-kilometer line needs nearly US$1.1 billion with 83% of which financed by Japan's ODA loans. At the meeting, Quan said the city would help facilitate the opening of a Germany House in HCMC in response to the German minister's concern over this project. Niebel said the house would be home to offices of German organizations and companies, including those responsible for ODA.

Vietnam Business And Financial News Network. Source [english.thesaigontimes.vn]

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