Hong Kong legislators must approve extra funds for high-speed rail link, despite cost overruns and repeated delays
Concerns over budget blowout are valid but without an alternative plan and with the project 70pc complete, there is no tuning back
That the city’s high-speed rail link to Guangzhou will cost more to build than was originally budgeted has been a certainty for some time. The only question is who foots the bill. After months of scrutiny and negotiations, the government and the Mass Transit Railway Corporation have worked out a budget slightly lower than previously estimated. But the Legislative Council still needs to approve an extra HK$19.6 billion in funding to complete the project.
The deal does not alter the fact that both sides have done a bad job in adhering to the cost and schedule. The 26km section linking West Kowloon to the border is now scheduled to be completed by autumn 2018 at a cost of HK$84.42 billion, instead of this year and within HK$65 billion as originally envisaged.
Subject to approval from lawmakers and shareholders, the funding agreement will see the MTR borrow from the private market to pay the government, its biggest shareholder, a total of HK$19.5 billion in dividends. While the payment covers the extra funding being asked of the government, critics say it is just a financial trick to help ease public opposition to the deal.
Taxpayers can be excused for feeling they are being forced to pay through the nose for what is set to be the world’s most costly railway. Unsatisfactory as they are, the arrangements are said to be the best option. If there is no other way out, shareholders and lawmakers should seriously consider backing the deal.
Officials have rightly said that having the deal in place does not mean the MTR can escape its responsibilities over the delay and cost overruns. The public expects the government to stand firm in pursuing responsibility through legal channels. The fallout also exposed a serious lapse in the government’s monitoring mechanism over infrastructure projects. Lawmakers would not feel comfortable approving the funding unless officials can provide assurances on these fronts.
With the atmosphere set to be more politically charged in the run up to the Legco election late next year, officials can expect a tough battle ahead. Some pan-democrats already say their support will hinge on whether the government can satisfactorily sort out issues concerning customs and immigration clearance in future. This will unnecessarily complicate the matter further.
Sceptics should perhaps ask whether there is an alternative. With 70 per cent of the project completed, there is no turning back. The priority is to get the high-speed rail back on track and deliver it according to the revised budget and schedule.