Metro No. 1 of Ho Chi Minh City encountered a series of problems with Japanese contractors

The Japanese contractor did not cooperate

A series of problems with the Metro No. 1 project have just been reported to the Ho Chi Minh City People’s Committee by the Ho Chi Minh City Urban Railway Management Board (MAUR) for a meeting chaired by Deputy Prime Minister Tran Luu Quang to review a number of projects. ODA project in cooperation with Japan.

According to MAUR, Metro No. 1 project has reached about 96.53% volume. The project has basically completed construction and is in the process of perfecting the systems, along with training operating personnel, testing the system and evaluating system safety certification.

The remaining workload of the project mainly belongs to the CP3 package (procurement of electromechanical equipment, rolling stock, rails and maintenance), worth more than 14,200 billion VND with contractor Hitachi.

However, currently, there are a number of contents related to the implementation of the CP3 contract that have not been completely implemented by Hitachi contractor or have solutions to resolve difficulties to complete the work.

Specifically, regarding the content of using project equipment to serve the training of the general consultant (NJPT), currently, the views and perspectives of contractors Hitachi and NJPT are still different, leading to difficulties for MAUR continues to carry out preparations for upcoming test exploitation.

Accordingly, in many of its documents, contractor Hitachi requires additional costs related to the early use of the railway system to serve the project’s training work. However, the NJPT consultant affirmed: Train driver training activities are carried out by NJPT instructors, using the main line, which has been clearly stipulated in the CP3 contract… and that is the task. of the contractor cooperating with NJPT without any additional cost payment other than the cost allocation table.

In addition, Hitachi contractor said that it is only responsible for testing the integration of CP3’s own systems, disclaiming responsibility for testing and commissioning the entire system.

In this, NJPT affirmed that, in accordance with the terms of the CP3 contract, Hitachi was obliged to integrate with the works of the interface contractors and plan comprehensive integrated testing and commissioning. At the same time, the contractor must comply with any instructions that the investor’s representative, NJPT, may give.

MAUR said that the lack of agreement on how to understand the contract has resulted in additional time and costs. If these issues cannot be resolved, it will be difficult for the project to be put into trial and commercial exploitation according to the schedule reported to both the Vietnamese and Japanese Governments.

Regarding the construction and import progress of some remaining systems of contractor Hitachi, there are currently areas of the project that are ready and eligible for construction, such as areas 2 and 3 of the Depot. However, contractor Hitachi has not yet accelerated the construction progress, greatly affecting the completion of the project.

Regarding the draft proposal and moving towards completion and signing of a 5-year contract for operation and maintenance, MAUR has discussed with Hitachi since 2022 and has had a number of continuous meetings with leaders of Hitachi Japan. Ban and Hitachi’s project implementation office in Ho Chi Minh City from the beginning of July 2023.

Since then, MAUR has repeatedly asked Hitachi to continue meetings to discuss and quickly promote this content. However, contractor Hitachi always used the excuse of “not having time to prepare” so he refused meetings with MAUR.

Currently, MAUR has discussed with general consultant NJPT a suitable solution regarding the scope of work so that Hitachi contractor can have many options to propose a 5-year operation and maintenance contract. In case Hitachi still cannot perform, MAUR said it will report to the Ho Chi Minh City People’s Committee and propose alternative solutions to ensure project progress.

MAUR said it had sent an official dispatch clearly informing the Japanese Embassy in Vietnam of the situation and JICA Vietnam requested to review and give opinions to contractor Hitachi to focus on completing the project.

At the same time, MAUR also proposed that the People’s Committee of Ho Chi Minh City propose to the Ministry of Foreign Affairs and Government levels at all levels in working sessions with the Japanese side (Japanese Embassy and JICA) to consider and support the above problems to promote Promote active coordination from contractor Hitachi to quickly complete the project.

Quickly reconcile 3 lawsuits between contractors and MAUR

There are currently 3 lawsuits between the contractor and MAUR being brought to the International Arbitration Center in Vietnam. In particular, the CP2 package contract (overhead section and Depot) has 2 dispute lawsuits and the CP3 package contract has 1 dispute lawsuit following a lawsuit from contractor Hitachi.

MAUR said it has discussed with contractors to conduct commercial mediation for outstanding issues between the parties. For the two lawsuits in the CP2 package, MAUR has currently signed a mediation agreement with the joint venture contractor SCC as a basis for conducting commercial mediation procedures at the International Mediation Center in Vietnam.

Regarding the lawsuit with contractor Hitachi for the CP3 package, on June 21, 2023, MAUR discussed settlement directions. These issues were also discussed in project progress meetings with representatives. Representative of contractor Hitachi. Contractor Hitachi is discussing for feedback.

At the same time, the current contractor consortium SMJO (Shimizu – Maeda) of package CP1b (underground section from City Theater station to Ba Son station) has had complaints to the investor due to disputes during the process. construction process, but there is a desire to be resolved in the form of commercial mediation in Vietnam.

MAUR said it will promote friendly commercial mediation with contractor SMJO.