Metro route contractor asks for compensation due to delayed land clearance

Tuesday, Nov 09, 2021 08:33

Work on the Nhon – Ha Noi Railway Station Route - the second metro route in Ha Noi. — VNA/VNS Photo Huy Hung

The main contractor for the Nhon – Ha Noi Railway Station route - the second metro route in Ha Noi – has asked for compensation of US$114.7 million, saying that it has been suffering losses due to long-delayed land clearance.

The Nhon – Ha Noi Railway Station route runs 12.5km from Nhon in the western district of Nam Tu Liem, via Kim Ma Street to the Ha Noi Railway Station in the city's downtown area. The route runs 8.5km on elevated tracks and the remaining 4km underground with four stations. Work on the project began in 2010.

The project was supposed to be completed in 2018 but the completion date was later pushed to December 2022.

According to the contractor Hyundai E&C-Ghella (HGU), for years, it has been unable to construct the underground section of the metro route as land clearance work there was not finished.

HGU asked the Ha Noi Urban Railway Management Board, the project investor, to pay compensation for the delayed land transfer.

The vice director of the management board Le Trung Hieu on Saturday told Vietnam News Agency that the management board received and was processing the constructor’s demand.

Hieu said that in the process of implementing construction contracts, especially infrastructure construction contracts with great value and factors, the occurrence of disputes or complaints is unavoidable. Therefore, construction contracts often detail the steps to resolve disputes or complaints, from the parties' self-negotiation to the establishment of a Dispute Settlement Board or arbitration.

The provisions of the FIDIC Contract applied to the Nhon – Ha Noi Railway Station Metro project following international practices and Vietnamese laws also clearly state that both the investor and the contractor have the right to make claims due to the other party's breach of contractual obligations. However, the complainant needs to provide specific basis and evidence to clarify the contents of the complaint, records and documents proving damage caused by the other party's fault.

Hieu said that regarding the proposed compensation of $114.7 million, the contractor only provided documents verifying a part of the claim with a very small value, accounting for about two to three per cent of the total value that the contractor asked for.

Most of the contractor's claimed value was based on preliminary spreadsheets, lacked legal proof and necessary documents and records. So, the consultant (Systra - French Republic), as well as the investor, have not been able to accurately assess the claims to serve as a basis for resolving disputes.

“The consultant and the investor have provided the constructor with many guiding documents but so far, the contractor has not fulfilled these requirements,” he said.

The Ha Noi Urban Railway Management Board was implementing procedures to gradually handle contractors' disputes and complaints. As soon as the contractor's complaint was received, the investor has been working and negotiating with the project consultant and contractor to resolve problems, to find commonalities between involved parties.

Hieu said that from the beginning of project implementation, to minimise negative impacts of the delay in site clearance or re-encroachment on the site in case it has been cleared but has not yet been used for construction (which happened at the location of station S2, station S7 and ventilation area), the investor negotiated and persuaded the contractor to partially receive the site for construction.

However, the progress of handing over the site did not meet the construction schedule.

Thanks to assistance from the Ha Noi People's Committee, relevant districts, departments, agencies and people, the construction site at Station S11 - Van Mieu was expected to be handed over to the contractor in December 2021 as households in the construction site agreed to receive compensation and move.

According to the report of the Hanoi Urban Railway Management Board, all ten major packages under the metro project Nhon – Ha Noi Railway Station were implemented.

Up to now, the overall progress of the project is about 74 per cent, in which the progress of the elevated section reached 89.5 per cent and the progress of the underground section reached 32.2 per cent. The elevated section is expected to be put into operation in December 2022.

When waiting for the compensation to be addressed, Hyundai E&C-Ghella (HGU) stopped construction of the underground section to avoid additional losses. — VNS

Comments (0)