Lawmakers have cast doubts on the MTR Corporation’s proposal to pay the government a special HK$19.5 billion dividend instead of directly footing the cost of overruns to its long-delayed Express Rail Link to Guangzhou.
The government has agreed to seek a further HK$19.42 billion in public funds to pay for the HK$84.42 billion project. This matches up almost exactly to the sum it is promised as a special dividend.
However, Labour Party lawmaker Lee Cheuk-yan says this may all be a financial trick to use public money to foot the bill for the project – scheduled to be completed in the third quarter of 2018.
“Whether you’re talking about government expenditure or you are talking about MTR special dividend… it’s the same people who are footing the bill, so it’s just a trick!” he warned.
The government is the majority shareholder of the MTR Corporation.
Democratic Party legislator Wu Chi-wai, meanwhile, says the devil may all be in the details, and criticised the Transport minister, Anthony Cheung for refusing to disclose further details of the agreement.
“The financial arrangement between the MTR [Corporation] and the government have a lot of black holes inside… We need to see the details in order to… understand whether or not the arrangement will hurt the general public,” he said.
New People’s Party lawmaker Michael Tien also said the arrangement is like forcing the government to pump billions of dollars into the troubled rail project instead of using the money to build hospitals, schools, and roads.
The government needs approval from the legislature to inject money into the Express Rail project; while the MTR Corporation needs the green light from its independent shareholders for the special dividend. The railway is offering to pay shareholders a special dividend totalling HK$6.2 billion to sweeten the deal.