Sunday , February 25 2024

Gov’t approves more funding for HCMC’s metro operator in wake of delays


The operator of Ho Chi Minh City’s first metro line will be given an extra VND254 billion (US$10.7 million) in this quarter to run the project.

As concluded by Deputy Prime Minister Le Minh Khai on July 1, HCMC will now have the authority to approve the charter capital for HCMC Urban Railway No. 1 Co. Ltd. (HURC1), the operator of Ben Thanh – Suoi Tien metro line, which will run about 20 km from Ben Thanh Market in the heart of District 1 to Long Binh Depot in Thu Duc City.

The government made the decision after HURC1 said it has been out of cash for two years and did not have any funding left to hire staff to run the metro line, which is set to be completed by the end of this year and begin commercial operation next year.

Following the decision, HCMC authorities are planning to provide an extra VND254 billion of charter capital for HURC1 within the third quarter of this year.

The government approved HURC1 to be established in 2015 after work started on the line in 2012.

After that, the company had been given a charter capital of VND14 billion following its establishment, and further funding was meant to be sourced from the metro line when operated.

But as the metro operations were delayed from the original plan of 2018, HURC1 had already exhausted its financial resource since August 2021.

Since then, its workers have not been paid. The company cannot even pay for utilities at its headquarters and had to borrow meeting rooms from the metro line developer.

HURC1 now owes over VND1.3 billion in employee insurance, not including their salary. It has recently proposed to borrow VND16 billion from the city’s coffers to pay for expenses by September this year.

Before the decision by Deputy PM Khai, HCMC had asked the government for VND268 billion (including the VND14 billion that HURC1 has already used) in funding, but as the company has not made any revenue, it is not considered an effective state-owned company and therefore the request was not approved at first.

Last month, HURC1 made an announcement saying that given the lack of funds, it could not hire workers to run the metro line, and that could threaten to delay the project even further.

Over 700 people are needed to operate metro line No. 1. Nearly 400 of them are conductors, station staff and technicians, while the rest of them work in the headquarters and maintenance department.

Costing over VND43.7 trillion, the line is now 95% complete.

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