Cat Linh-Ha Dong elevated rail line in Hanoi. Photo: Ngoc Thang
The Chinese main contractor of Hanoi's first elevated rail line said its combined debt of around VND400 billion (US$17.7 million) to subcontractors has held off the high-profile project.
At a meeting with the Ministry of Transport in Hanoi on Thursday, a representative of state-owned China Railway Sixth Group Co., Ltd. apologized for continued delays in the Cat Linh - Ha Dong project, which is largely funded by the Chinese government.
He said the company has been waiting for Chinese authorities to disburse around $19 million, adding that China has been tightening the outflows of its capital.
A senior manager of the Chinese company is expected to meet with Vietnamese transport ministry to discuss further about the disbursement next week.
Figures from the transport ministry, on the other hand, showed that the Chinese company owed its subcontractors at least VND554 billion ($24.5 million) as of February 29.
The 13-kilometer line linking Cat Linh Street to Yen Nghia Bus Station in Ha Dong District was originally estimated to cost around $552 million, nearly 76 percent of which came from Chinese official development assistance loans.
However, following several delays, the cost has soared to more than $868 million, according to the transport ministry's latest figures.
Work was originally scheduled for starting in August 2008 and completing in November 2013. But, it was not launched until October 2011, pushing the project's deadline to at the end of 2014.
The deadline, however, was moved at least twice last year.
According to the latest plans, the Chinese contractor will have to complete its work at the end of this year as per request of the Vietnamese transport ministry.
The project is also notorious for two collapses at its construction site in 2014, killing one and injuring three others.