HCMC metro operator run out of funds due to delays
Ho Chi Minh City should ask for supplementary funding from the central government to support the operator of its first metro line, the Ministry of Planning and Investment said.
A wholly state-owned firm, HCMC Urban Railway Company No. 1 (HURC1), the operator of HCMC’s metro line No. 1, has run out of funds, the city confirmed in February.
VN Express said HURC1 came into life in 2015 based on the initial plan for the metro line to be up and running within 2018. At the time of its establishment, the company was granted charter capital of VND14 billion ($$613,000) to purchase office equipment and no operating budget.
According to the company’s establishment plan and agreement between the Vietnamese government and Japan International Cooperation Agency, which funds the project, before the line is operational, HURC1 would have no revenue, and therefore the city must allocate budget to ensure its operation.
Once the line operates, HURC1 would start earning revenue.
However, as construction fell far behind schedule, the company ran out of funds.
After several delays, the project was set to be completed at the end of 2021 and enter commercial operations this year but was delayed again due to pandemic impacts.
It is now nearly 90 percent complete and expected to start operation in 2023.
According to the Ministry of Planning and Investment, HCMC cannot raise the firm’s charter capital as the metro line has yet to operate and therefore, it has told the city administration to ask for state budget to support the firm.
The lack of funds has put HURC1 in many difficulties, including in organizing courses to train drivers for the line.
Once the line starts operation, the company would need around 700 staff compared to just around 15 at present.