Road costs lopped off bill for Guangzhou link
The government has managed to claw back its projected bill for the planned express rail link to Guangzhou to under HK$60 billion - by excluding the cost of building connecting road networks from the estimate.
The revised estimate is expected to be submitted to the Executive Council tomorrow.
The cost of building the Hong Kong section of the high-speed railway has ballooned beyond the original estimate of HK$39.5 billion - which included the roadworks. And an official familiar with the project said that estimates several months ago had exceeded HK$60 billion.
The cost is soaring because most of the 26-kilometre Hong Kong section will have to be built underground - it will run through twin tunnels and through three hills - and the price of materials keeps rising.
The official familiar with the project said the cost of the rail link would be trimmed to below HK$60 billion after the government excluded the cost of building the road networks connecting to the terminus in West Kowloon from the final estimate.
He said deducting the cost of the roadworks from the estimate was sensible, since roads would have to be built anyway to the terminus and the West Kowloon Cultural District. The cost of the roads is estimated to be several billion dollars.
The final estimate for the project includes a revised compensation package for affected villagers in Choi Yuen Tsuen in Yuen Long.
The total spending also covers the expenses for rebuilding the public facilities that would be removed during the construction.
After submitting the estimate to the Executive Council for its green light, the government plans to seek funding approval from the Legislative Council Finance Committee next month and aims to begin construction by the end of the year.
The national rail network, to which the line will link, is due for completion in 2012 or 2013.
Explaining the sharp rise in the estimate, another official said the price quoted by contractors for public works had increased by about 50 per cent in the past year.
But Secretary for Transport and Housing Eva Cheng said last month the quarterly adjusted Building Works Tender Price Index - which reflects the cost of public works - had been dropping. It began rising in the last quarter of 2005 and reached a high in the third quarter of last year.
Based on the original estimate of HK$39.5 billion, the city's 26- kilometre section of the Guangzhou-Shenzhen-Hong Kong express link will cost HK$1.52 billion, or US$190 million, per kilometre. It would be the most expensive high-speed railway in the world per kilometre.
The rail link has come under fire since it became known it would not cut travelling time to Guangzhou, as had initially been touted. Concerns have also been raised about the cost and necessity of the project.