On November 3, in order to resolve the current challenges in the construction contracts for the Ben Thanh - Suoi Tien Metro Line No.1, the Ho Chi Minh City People's Committee recommended the Ministry of Construction (MOC) to permit the Management Authority for Urban Railways (MAUR) to use the price index issued by the General Statistics Office of Vietnam (GSO) in the context that the MOC has not yet issued its own price index.
The unresolved price adjustments for project contracts can be attributed to the Ministry of Construction's failure to issue a price index for the metro project from its beginning to the present. This has made it challenging to determine a suitable price index for modifying contract prices. As a result, the MAUR is currently only able to make provisional payments, covering 70 percent of the price adjustment value, based on the price index issued by the GSO.
In the case of Contract Package 3 (CP3), as specified in the contract between the parties, payment is only permissible once the contractor has successfully completed 100 percent of a work item or a significant payment milestone. Nevertheless, there are instances where the contractor has imported equipment, accounting for 95 percent of the total volume, yet payment remains pending.
As for the construction and installation work at the site, which involves equipment packages, payment can only be processed once the installation is complete and system testing has yielded successful results. Payment cannot be made solely for the equipment installation.
As a result, the payment progress for the CP3 is currently lagging behind the construction schedule of this package. The MAUR has to help the contractor divide the payment milestones within the contract to enhance the disbursement rate for this package.
