Ho Chi Minh City definitively resolves complaints from Japanese contractors at Metro Line 1

MINH QUÂN |

Ho Chi Minh City focuses on definitively handling complaints from Japanese contractors at Metro Line No. 1 (Ben Thanh - Suoi Tien).

The above request was clearly stated by Vice Chairman of Ho Chi Minh City People's Committee Bui Xuan Cuong at a meeting on preparations for the Railway Steering Committee meeting.

Metro Line 1 is facing many complaints from Japanese contractors with a total arising value of more than 324 million USD (more than 8,474 billion VND).

For CP1a and CP1b contracts, Ho Chi Minh City leaders requested to complete the settlement of complaints and payment procedures in April 2026.

Package CP1a - Ben Thanh underground section - City Opera House (SMCC - CIENCO4 consortium) still has many outstanding contents, including financial costs due to slow payment, adjustment of the price of the Vietnamese bronze part, extension of construction time due to temporary suspension at entrance F2 and ventilation tower, volume exceeding BOQ, and additional items on fire prevention and fighting.

The Ho Chi Minh City Urban Railway Management Authority (MAUR) is appraising the estimate and completing the contract appendix to serve as a basis for payment. However, the two parties have not yet agreed on the adjusted value according to the price index due to differences in the source of application.

Package CP1b - Underground section City Theater - Ba Son (Shimizu - Maeda Consortium), the contractor has agreed to participate in commercial mediation at the Vietnam International Trade Mediation Center.

NJPT's general consultant estimates the value of the complaint to be about 15 million USD. The Ho Chi Minh City People's Committee assigned the investor to coordinate with relevant parties to thoroughly review reasonable arising expenses, summarize the expected payment value, and ensure that it does not exceed the total investment.

Package CP2 - Elevated section and depot (Sumitomo - CIENCO6 Joint Venture) was requested by Ho Chi Minh City leaders to complete relevant procedures in May 2026.

The SCC contractor consortium previously proposed a comprehensive settlement of complaints with a value of about 100 million USD and committed to withdrawing lawsuits at the Vietnam International Arbitration Center if mediation is successful.

During the negotiation process, the proposed level is reduced to about 45 million USD, provided that the parties complete it before March 31, 2026; if no agreement is reached, the contractor can return to the required level of about 62.6 million USD. NJPT Consultant assesses the mediation plan at about 40 million USD as being considered.

Metro số 1 TPHCM đã phục vụ gần 30 triệu lượt khách. Ảnh: Anh Tú
Ho Chi Minh City Metro Line 1 has served nearly 30 million passengers. Photo: Anh Tu

Package CP3 (mechanical and electrical equipment, locomotives and carriages, railway tracks and maintenance implemented by Hitachi), leaders of the Ho Chi Minh City People's Committee directed to continue negotiating and mediating with contractors in the spirit of cooperation and compliance with legal regulations.

This is the bidding package with the largest volume of complaints (121 complaints), with a total value converted to about 332 million USD.

Hitachi contractor prioritizes resolving disputes through arbitration. At the beginning of 2026, Hitachi proposed a total handling plan of about USD 264.2 million (equivalent to 40.3 billion yen), a decrease of about 20% compared to the total value of the complaint.

However, functional agencies assess this proposed level mainly based on the total value of complaints being resolved at the arbitration, which does not fully reflect the objective assessment of legal risks and contract obligations of the parties.

In addition to financial issues, some important technical backlogs have not been completely resolved by the contractor, including replacing equipment that does not meet contract standards, overcoming train wheel slippage in operating conditions and handling issues related to system safety.

Metro Line 1 was approved in 2007, started construction in 2012, nearly 20 km long, connecting the center of Ho Chi Minh City with the eastern gateway.

The metro line has 11 elevated stations and 3 underground stations, with a total investment of more than 43,700 billion VND, mainly using ODA capital from Japan.

Metro Line No. 1 officially opened from December 22, 2024, and has served nearly 30 million passengers to date.

However, the 4 main construction packages of Metro Line 1 are currently facing complaints, in which the construction time is nearly 12 years long, leading to many problems.

MINH QUÂN
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