Kenneth Lau
Tuesday, August 12, 2014
The delay in building the long-awaited high-speed rail link will cost an additional HK$6.5 billion, taking the total cost to HK$71.5 billion.
In addition, the government warned it might claim for damages for breach of its agreement with MTR Corp.
The cross-border Guangzhou-Shenzhen-Hong Kong Express Rail Link (Hong Kong section) was originally scheduled to be completed in 2015, but in April MTRC said there would be a two- year delay because of bad weather early this year.
An MTRC spokesman said the latest estimate is HK$71.52 billion, including future insurance and project management costs.
"It was agreed by the government to make the figure public," he added.
In January 2010, the Legislative Council approved HK$66.8 billion for the project, HK$65 billion of which was for MTRC to provide the design, construction, project management, testing, commissioning and more.
The latest estimate was sent to the government on July 24.
The question of who will pay the extra cost will be decided by the entrustment agreement, the spokesman said.
"This figure is based on a detailed review of the revised program for completion of the project in 2017, incorporating a range of scenario planning and taking into account various factors, including the need for additional manpower, contractor resources and potential future events such as unforeseen site conditions."
He revealed the government is still reviewing the latest estimated cost.
The Transport and Housing Bur
Upon receipt of all relevant information, the government will critically examine and explore how to follow up in accordance with the entrustment agreement, a spokesman said.
The agreement stipulates that MTRC has to minimize any delay or other effects which any modifications may have on the project.
The bureau spokesman said the delay might amount to a breach of MTRC's obligations.
Michael Tien Puk-sun, chairman of the Legco railways subcommittee, said MTRC's estimate of costs is "optimistic."
The former chairman of the Kowloon-Canton Railway Corp said the estimates were made by MTRC and not the contractors.
He said the weather, insufficient underground investigation or amendments of the design might lead to changes in costs.
Tien said unless it can be proved the rising costs are not MTRC's fault and could be met by the contractors, the eventual losers will be the taxpayers
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