Nov 24, 2012

Vietnam - Spain cuts funding for Metro Line No. 5

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HCMC – Spain can only provide the Metro Line No. 5 project in HCMC with a fund of 200 million euros, or around US$256 million, instead of 500 million euros as planned, as the EU country is experiencing the impact of economic crisis.

Eduardo Euba Aldape, deputy director general for trade policy with Europe and Asia-Pacific of the Spanish Ministry of Economy and Competitiveness, met HCMC Vice Chairman Nguyen Huu Tin on Wednesday to talk about the loan that Spain would give the city.

Under the witness of Spanish Ambassador to Vietnam Fernando Curcio, Aldape informed that the Spanish government would provide the project with 200 million euros, instead of 500 million euros as announced before. However, he stated Spain would help HCMC access other capital sources, such as banks in Europe.

“Now is the time for us to strengthen bilateral cooperation to gain confidence of lenders, like the Asian Development Bank (ADB) and the European Investment Bank (EIB),” Curcio added.

Technical study of the Metro Line No. 5 has been finished and the Spanish consultant hopes to get approval from the HCMC government soon so that it can do following jobs, said Aldape. The metro line will run from Bay Hien Intersection in Tan Binh District to Saigon Bridge.

Aldape informed the bilateral financial program between Spain and Vietnam had been extended to February 2015. It is to say there will be more time to carry out two project packages, namely the Metro Line No. 5 and the environmental projects already listed.

“For the projects in HCMC alone, Spain has spent five million euros (US$6.4 million) on technical support. This is an unprecedented effort in Asia,” said Aldape.

Vice chairman Tin expressed sympathy with the Spanish government over the public debt problems it is facing. He hoped the situation would improve next year.

The Metro Line No. 5 project will be developed with total investment capital of some US$1.85 billion.

The first phase of the project, with the section from Bay Hien Intersection to Saigon Bridge, is planned to be financed by official development assistance (ODA) of Spain. However, as Spain’s ODA is only equal 40% of the expected figure, the city will have to look for additional funds.

Meanwhile, the city is still seeking funds for the second phase of the project, with the section from Bay Hien Intersection to Can Giuoc Coach Station.

Kinh Luan - The Saigon Times Daily

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