The Ho Chi Minh City municipal administration has raised the estimated cost of the country’s first metro-line by more than US$1.4 billion since 2007, citing design adjustments and “objective” hikes in prices and wages.
The 20-kilometers subway connecting districts 1 and 9 was planned to cost around $1.04 billion when the city first approved the project in 2007.
The project's board, which includes six Japanese consultants and two Vietnamese, decided that the approved design did not meet the necessary requirements to open bidding.
The so-called NJPT Association recalculated costs and raised the investment to around $2.49 billion in September 2011, the city government said in a recent statement.
The Japanese government will lend more than $2.2 billion in Official Development Assistance (ODA) toward the project; the city government will cover the rest.
The HCMC People’s Committee linked the swelling costs to “objective fluctuations” in fuel and material prices as well as an increase in the minimum wage between 2006 and 2009.
Additional constructions designed to increase the project’s effectiveness also raised the cost, the city government said.
It also said the subway’s completion will be pushed back by two years to 2020.
Earlier reports predicted it would open in late 2018.