City wants Germany-backed subway project quickened

"We are anxious to hasten work on the urban subway development," Quan told a meeting with the Parliamentary Secretary of State at the German Federal Ministry of Economics and Technology and his entourage at the City Hall yesterday.

Quan said the city wanted to know more about the partners the German bank KfW were cooperating to provide a syndicated loan for the subway development in HCMC, which is expected to lessen the chronic traffic congestion here.

The visiting Parliamentary Secretary of State agreed with Quan, saying that now was the time to quicken the subway projects here.

"The city's wanting is ours," Schauerte said. Hans P. Miissig, first vice president of the German bank KfW in East Asia and Pacific, said at the meeting that the bank had had successful talks with representatives of Vietnam, the Asian Development Bank and the European Development Bank.

Miissig said the involved parties had signed a memorandum of understanding on and found a suitable financial funding format for the subway development in HCMC. Therefore, he asked the Vietnamese party not to be worried about the subway progress.

Miissig stressed that it was normal for a major project to pool capital from different sources. He added that financial preparation was progressing well.

Quan said HCMC would be the beneficiary of the subways but the Government's agencies were responsible for negotiating the financial agreement so the city was gathering information about the subway projects soon to report to the Government.

The Daily's library clippings show that German Bundestag Budget Committee okayed 85 million euro last year to service ODA loans to be extended by Germany to HCMC for developing the two subways, referred to as routes No.2 and No.3.

The two urban subways will have a total length of 27 kilometers. The city needs around US$1.25 billion for developing the Ben Thanh-Tham Luong while the route No.3 requires an investment of US$880 million.

Last November, members of the German parliament approved the financial backing for Vietnam to implement these subways connecting the downtown area and the outskirts of HCMC.

The detailed plans for the subways have been submitted to the Prime Minister. However, concerns have arisen about financial terms including the size of the ODA loan, the time length of the loan, the interest rate as well as the grace period.

HCMC envisages in its development master plan until 2020 to develop six subway lines with a total length of 107km and at a total investment capital of US$5-6 billion.

Subway No 1, which links Ben Thanh Market in the city center and Suoi Tien amusement park in Thu Duc District, got off the ground earlier this year. The Japanese-funded project will require more than US$1 billion for building 19.7km of underground rail.

The Prime Minister has just approved a plan to mobilize nearly US$15 billion for urban-railroad projects in Hanoi and HCMC until 2020.

HCMC will take more than US$7.5 billion of the total planned funds, including over US$1.2 billion from domestic sources and the rest from overseas.

Source: Saigon Times