Off the rails

PUBLISHED : Friday, 02 October, 2009, 12:00am
UPDATED : Friday, 02 October, 2009, 12:00am

Political heavyweights from across the border have been loud recently in telling us that we will be left behind unless we immediately rush to pour tens, perhaps hundreds, of billions of dollars into fancy new transport projects. Our bureaucrats in Hong Kong may still be a little deaf to this call to action, thank heavens, but in Taiwan the authorities have long had their ears open to it and welcomed it.

They have poured NT$450 billion (HK$107 billion) into a 345-kilometre high-speed railway from Taipei to Kaohsiung, a marvel that speeds passengers between the two cities in little more than an hour.

And the result? Taiwan has been left behind. The full scale of the debacle only became apparent last week with the news that a fresh civil servant has been appointed to sweet-talk banks into throwing good money after bad on a loser that has already seen NT$70 billion vanish since the service began in early 2007.

The convenient culprit for the mess is the obvious one, a villain named 'the economy'. By common agreement, it is the economy's fault that barely 80,000 people a day use the service, although initial estimates projected 180,000 daily, rising to 400,000 daily in 30 years. It has also been decided to preserve the fiction that this is purely a private project - a build, operate and transfer scheme - and therefore the government is not to blame, although it will now step in to twist the arms of the lenders.

There are several lessons for Hong Kong here. The first is that multi-year passenger forecasts for new transport projects are highly uncertain and tend to be influenced by special interests. For instance, a frequent fast hop by air is already available between Taipei and Kaohsiung and there is an existing four-hour rail service for people less pressed for time.

Rail planners dazzled by the glitter of a high-speed line pooh-poohed all this, however. The former chairwoman of the railway company even said, in a recent magazine interview, that overly optimistic estimates were adopted to make the project more appealing to investors.

Likewise, there are already a multiplicity of existing transport services between Hong Kong and Guangzhou, leave alone Shenzhen, and no detailed studies were done on the need for a new 48-minute rail service to an outlying Guangzhou suburb, with a cost that has now climbed to HK$60 billion for the Hong Kong portion alone.

The stated official reason for doing it is to 'reinforce Hong Kong's position as the transport hub in southern China and integrate Hong Kong into the country's rapidly growing express rail network'.

That's it. That's all. You look in vain for any reasoned studies on how this was determined or what lay behind the guess that this line will carry 100,000 passengers a day in the year 2020.

You would look in vain anyway, as it is the very unusual hub that is located at the rim of the wheel rather than in the centre of it. Hong Kong is actually not particularly well placed to be a transport hub for southern China.

Hong Kong is, nonetheless, already integrated into China's rail network. The rail connection is simply a little slower and a great deal cheaper. If you need speed, go to the airport. That is why we have air travel.

Contrary to what the rail boosters now argue, this new rail proposal is not like the decision 30 years ago to proceed with the Mass Transit Railway. The construction of the MTR's modified initial system was thoroughly studied and soundly based. It made excellent sense both as a transport project and a commercial venture. The new rail link to the border has been only skimpily studied and is based on political convenience alone.

The parallels with Taiwan High Speed Rail are many, and the danger of suffering the same fate is acute. The big difference is only that we have not yet committed ourselves fully and can still step back from this mistake.

We particularly need to rethink it because, if it goes wrong, this is no minor slip-up, a mere gaffe or oversight. We are talking of a project that could easily sink HK$10,000 per person for every member of Hong Kong's population. It will not be banks, shareholders or foreign investors that will carry this if it happens. They will have run and been long gone by the time the rest of us see our fate coming. The burden of it will fall squarely on Hong Kong working families through higher taxes and lower returns on savings.

That's the way it is now happening in Taiwan. Look and shudder.

Jake van der Kamp is a former Post columnist