Is express link on the wrong track?

PUBLISHED : Sunday, 01 November, 2009, 12:00am
UPDATED : Sunday, 01 November, 2009, 12:00am

For a person who travels frequently between Guangzhou and Hong Kong, the news that a ride on the new HK$65.2 billion cross-border express will cost just HK$180 may sound exciting.

At HK$10 less than the present through train from Hung Hom to Guangzhou - condemned by some passengers as smelly and dirty - the link is an appealing prospect even if it does terminate 45 minutes from the centre of the provincial capital of Guangdong.

But despite government trumpeting of the benefits from links to the mainland's high-speed network - the value of which, it says, transcends mere money - a hard look at the proposals raises questions about just how good a deal it is for the community that will pay for it and how many people will actually benefit from it.

To put it in perspective, with the help of Lingnan University economics professor Ho Lok-sang, the price for the most expensive high-speed railway, per kilometre, ever built anywhere in the world:

Is equivalent to more than a quarter of the government's HK$244 billion expenditure for 2009-10;

Would pay for almost six of the HK$11 billion relief packages announced by Chief Executive Donald Tsang Yam-kuen in last year's policy address;

Would pay for the estimated HK$20 billion construction and operating costs of more than three West Kowloon Cultural Districts;

Is HK$15.2 billion more than the HK$50 billion committed to medical financing;

Would eat up two years of the estimated HK$30 billion revenue from a 5 per cent goods and services tax - proposed in July 2006 but dropped in the face of public opposition; and

Is equivalent to almost 15 per cent of the city's fiscal reserves of HK$459 billion.

'No one opposes closer co-operation with the mainland. But the government must lower the cost,' Ho says. 'Nothing can justify doing it at all costs, except the survival of the human race.'

The government estimates that, over 50 years of operation, the economic benefits of the railway - mainly attributed to time savings by travellers - will amount to HK$87 billion, with 11,000 jobs at the height of construction and 10,000 longer term.

Announcing Executive Council approval for the massive undertaking, it said the link would 'help reinforce Hong Kong's status as a transport, financial and commercial hub' of China by providing a high-speed shuttle service between neighbouring cities and allowing Hong Kong to 'tap into the 16,000-kilometre national high-speed railway network'. The government also said it was keeping the fares low to enhance benefits to the community while not worrying too much about making a profit or getting its money back - which would take about 100 years on present estimates.

And indeed, the benefits of the line, officially the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Link, look attractive.

Apart from the HK$180 Guangzhou ride - less than a tenth of the amount some economists say would be needed to recoup the cost - it will cost HK$45 to get to Shenzhen's central business district of Futian and HK$49 to the industrial district of Longhua. Given the much higher speed and lack of commuter stops, this compares favourably with the HK$33 trip from Hung Hom to the Lo Wu border control point.

Hong Kong travellers will also be able to reach Shantou in two hours, Xiamen in four hours, Wuhan in five hours, Shanghai in eight hours and Beijing in 10.

But do all these justify a cost of almost HK$10,000 for every man, woman and child in Hong Kong?

And if they do, who will actually benefit most?

Not the two million-odd Hongkongers - 28 per cent of the population - who did not travel to the mainland once in the past five years, nor to any great extent the 4.6 million who did so occasionally.

On present travel patterns the biggest benefit will be to just 540,000 people who, according to the Planning Department's northbound-southbound 2007 study, are frequent cross-border travellers.

Of these, 18,100 travel at least once a week for work, 183,600 on business and 29,800 to visit family. The rest travel to Pearl River Delta towns for recreation.

To be fair, the government has said it expects cross-border travel to expand greatly in the coming years, with better transport and further integration between Hong Kong and Guangdong.

All things considered, Raymond So Wai-man, associate professor in Chinese University's finance department, thinks Hong Kong should build the line for one crucial reason - a lifeline to maintain its position in the mainland economy and achieve integration with Guangdong.

'If we don't build it, we will be marginalised,' he says. 'There is only one reason to build the railway - it is to buy a hope, a chance that we will not be marginalised.'

But critics, even if they agree the line should be built, say it is too expensive and question why so much needs to be spent on the vast and expensive underground terminus in West Kowloon - almost half the total cost by some estimates.

'The government is withholding a lot of useful data from the public,' said Ho of Lingnan University.

'Two sets of basic information have not been released. How many people will save journey time by making West Kowloon the terminus? How many people will have to take more time by making West Kowloon the terminus?'

West Kowloon was convenient for some people, not for everyone, he said, adding that the inconvenience of the Hung Hom terminus was one reason the present service was not more popular.

'The government has to justify why it is spending so much money while refusing to look into other options. We are not talking about the choice between high speed rail and no high speed rail. We are talking about whether we can do it more cheaply. The money we save could solve a lot of social problems.'

Engineers say the main reason for the high cost is that most of the link, including the 140,000 square metre terminus, is being built underground.

One possible alternative has already been flatly rejected by the government, which says it is impracticable and its pricing unrealistic.

An engineers' organisation, Professional Commons, proposed moving the Hong Kong terminus to Kam Sheung Road in the New Territories, from where passengers could travel to the city by West Rail, cutting the overall cost of the scheme to HK$25 billion. Included in the price - proposed at a time when the government's estimate for its plan was just HK$39.5 billion - would be a line to connect Kam Sheung Road station with the Airport Express at Tsing Yi.

Group chairman Albert Lai said a Kam Sheung Road terminus would be in easy reach of 3.5 million people, including New Territories residents.

'The beauty of a city-centre terminus in West Kowloon is only a mirage. The planning constraints we have created in the past will make the terminus costly to build and inconvenient to use. Worse still, the over-congestion it generates will be many times worse than what Times Square has done to Causeway Bay. Planning disasters like these are simply irreversible once built,' Lai said.

The terminus will be a state-of-the-art structure, with three levels all below ground. The 26 kilometre link that runs from it will pass through twin tunnels and under Golden Hill, Tai Mo Shan and Kai Kung Leng hills.

Even though he thinks the line should be built, So distrusts the government's projected employment benefits and economic returns, which also include an economic rate of return - calculated by putting a dollar value on time savings - of 6 per cent and annual operating profit of about HK$600 million.

'It is reasonable to discount what the government proclaims. The economic returns you can discount by half. And the employment, 10,000 jobs, is, I think, including the employment created by the West Kowloon Cultural District. If it doesn't paint a rosy picture, how can [the government] convince people to support it?' To recoup the cost, he says, the fare would have to be HK$2,000 per journey.

Those who mistrust government projections can point to Disneyland where the figures have, to put it unkindly, proved to be Mickey Mouse.

The HK$21 billion deal between the government and the Walt Disney Company was predicted to boost the economy by HK$148 billion over 40 years, eight times the total cost. The then chief executive Tung Chee-hwa called it a vote of confidence in the city and its future.

The reality is very different. Only about five million people visited the park in 2005, its first year of operation, short of the 5.6 million target. Ten years after the deal was signed, the government now says Disneyland will bring HK$64.7 billion in net economic benefits over 40 years.

The 140 kilometre link from West Kowloon to Shibi in the satellite city of Panyu includes intermediate stations at Futian and Longhua in Shenzhen, and Humen in Dongguan . Two stations - Gongming in Dongguan and Dongcong in Panyu - will be added later.

It will take just 48 minutes to reach Shibi from West Kowloon, but passengers whose destination is Guangzhou's business district of Tianhe will have to transit to the metro and ride another 18 stops.

Construction is due to start by the end of this year and be completed in 2015.

One reason for the government's desire to get started is that it is lagging behind the mainland side, with the Panyu terminus expected to be completed early next year. Hong Kong's late start has prompted taunts from across the border about the city being half-hearted towards the link.

Professor Zheng Tianxiang , a transport specialist at Guangzhou's Sun Yat-sen University and a strong advocate of closer cross-border co-operation, was thrilled by the news that the project had been approved.

'It will be very convenient in the future,' he said after watching the news on television. He said Hongkongers would be able to go to Zhuhai and Nansha by rail. 'Railway transport is more reliable [than ferries or coaches]. It will be not affected by bad weather, such as typhoons.'

But Zheng thinks the express will eventually sound the death knell for the through train.

'The through train looks ridiculously expensive now. Unless it cuts prices, it is not going to survive. But it is not going to cut prices because otherwise, the passengers will not go to the high speed rail. The move is so obvious - the Hong Kong government wants to boost the high speed rail's popularity.' he said.