HANOI (AFP) – Japanese conglomerate Hitachi is demanding more than USD150 million in compensation from a government-owned railway company in Vietnam over major delays to Ho Chi Minh City’s first metro line, state media reported yesterday.
The company is providing equipment for the new line, including train engines and rails, according to state media.
Vietnam has severe infrastructure weaknesses, but major projects including metro networks in big cities and highways across key routes are suffering huge delays. The World Bank said last year that a lack of infrastructure would constrain Vietnam’s ability to attract and retain foreign investment.
Ho Chi Minh City, Vietnam’s economic hub with a population of around nine million people, does not have a single completed metro line.
The 20-kilometre Ben Thanh to Suoi Tien line, which would be the first, has been under construction since 2012, and was originally slated to open in 2018.
Hitachi has filed a suit at the Vietnam International Arbitration Centre against the city’s Management Authority for Urban Railways (MAUR) for a delay of 4,124 days, VNExpress news site said.
The delays have been blamed on a number of factors including paperwork complications, design changes, land clearance problems, and the COVID pandemic, the report said.
The metro line’s latest schedule for opening is the fourth quarter of 2024, and state media said the Japanese ambassador had written to the top official in Ho Chi Minh City asking for his commitment to that date.
The line has cost USD1.7 billion so far.
Vietnam’s first and only urban railway opened in 2022 in Hanoi, seven years behind schedule.
The cost of the line skyrocketed from USD550 million to more than USD860 million.
