The Executive Council has given the green light to the controversial cross-border rail express with a price tag of HK$65.2 billion - a 65 per cent blowout from the original estimate - which means the government will recover less than half of the construction cost in 50 years.
The Transport and Housing Bureau said HK$53.7 billion of the cost was for the railway, while the remaining HK$11.5 billion was for related works including roads around the West Kowloon terminus.
The 2007 estimate of HK$39.5 billion included all these works.
The bureau spokesman said the line was expected to earn only HK$28.1 billion in 50 years, not even half the construction cost. A key reason for this is the fares - HK$45 to HK$49 for the 14-minute trip to Shenzhen and HK$180 for the 42-minute trip to Shibi in Guangzhou.
These compare with HK$31.30 for the 40-minute East Rail trip from Hung Hom to Lo Wu and HK$190 for the present Guangzhou through-train - although that ends in the city centre, while the new express rail will terminate in suburban Panyu.
With the much higher cost, the economic rate of return, calculated by putting a dollar value on time savings, has shrunk from 9 per cent to 6 per cent, compared with 12 per cent for the Hong Kong-Zhuhai-Macau bridge, and 8 to 10 per cent for metro rail lines.
Secretary for Transport and Housing Eva Cheng said the government did not plan to make a profit from the line. 'The function of this rail is to link us up to 16,000km of the national rail network. It is very important for our integration with the mainland and has to be built.'