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Hong Kong MTR

Cost overruns must not become the norm

The soaring budget for the Sha Tin-Central rail link is the latest infrastructure project to be hit by increased costs in recent years. This does not square with Hong Kong’s record of building world-class projects within budget and a culture of overspending should not be allowed to gain traction

PUBLISHED : Monday, 11 December, 2017, 1:13am
UPDATED : Monday, 11 December, 2017, 1:13am

The spiralling costs of the city’s infrastructure projects have been an issue of concern in recent years. From the cross-border, high-speed railway line to the Hong Kong-Zhuhai-Macau bridge, examples of ballooning budgets abound. While we may well have to live with the fact that it costs a lot more to build anything these days, taxpayers can be excused for finding it hard to foot yet another costly bill. The latest estimate is that the Sha Tin-Central rail link will cost almost HK$100 billion, making it one of the most costly railways ever built in the city, if not the world.

The revised budget of the 17km project has swollen to HK$87.32 billion, HK$16.5 billion higher than previously approved. Taking into account other preparatory works, the price tag of the new cross-harbour link is at least HK$97 billion. Officials stressed that the figures put forward by the MTR Corp were still being scrutinised. But if previous episodes are any reference, the government is likely to go back to the Legislative Council for more funding. The need for taxpayers to fork out more is almost certain. But they expect nothing short of a full account on where the money goes.

Cost of Sha Tin-Central rail link balloons to HK$87 billion, making it the most expensive rail project in Hong Kong history

The government and the MTR Corp can expect some tough grilling. This is, after all, not the first time that rail and works projects have been hit by cost overruns and delays. Taxpayers have already forked out an extra HK$19.6 billion to finish the high-speed rail being built from West Kowloon to Guangzhou. The total cost is estimated to be HK$84.4 billion.

With the public coffers flushed with so much money in recent years, taxpayers may not necessarily object to paying more, so long as it is justified. But as we resign ourselves to the recurrence of cost overruns in public infrastructure projects, we risk losing well-established budget discipline, without which the city would not have been able to deliver a wealth of world-class projects in a timely and cost-efficient way. It is imperative for the authorities to critically assess the issues in question and put in place better safeguards.

The public appreciates that officials are not to blame for adjustments made in relation to the archaeological remains unearthed during excavations for the Sha Tin-Central link, which account for a quarter of the extra cost. But it has every right to question other factors, such as the delay in the handover of construction sites. There is a suggestion that a labour shortage has pushed up construction costs. Officials should work with the stakeholders to make importing foreign labour easier if that is the case. The recurrence of cost overruns does not square with our record of building world-class infrastructure facilities on time and within budget. The authorities must avoid a culture of overspending.