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MTR could face bill for two-year delay to high-speed cross-border rail link

Controversy over high-speed line to Guangzhou takes new twist, as transport minister's apology amid 'cover-up' claims fails to pacify lawmakers

PUBLISHED : Monday, 05 May, 2014, 11:07pm
UPDATED : Wednesday, 07 May, 2014, 7:26am
 

The government is seeking legal advice on whether the MTR Corporation should pay for the extra costs caused by the two-year delay to the high-speed cross-border railway, the transport secretary revealed yesterday.

Professor Anthony Cheung Bing-leung and three senior members of the MTR management offered apologies and explanations for the hold-up to lawmakers.

But the lawmakers continued to accuse them of intentionally covering up the problems that will put off completion of the HK$67 billion project to 2017.

Cheung, facing calls to step down, also pledged to introduce reforms to the corporation aimed at strengthening the government's supervisory role.

"I over-trusted them," he told Legco's railways subcommittee. "There were problems with my judgment and the way I handled the matter. I should have made public the split in judgments of the government and the MTR."

Cheung said government officials were dubious whether the project would be completed on time next year, but gave the "benefit of doubt" to the MTR and did not inform lawmakers.

Apologies were also made yesterday by MTR chairman Raymond Chien Kuo-fung, chief executive Jay Walder and project director Chew Tai-chong. The MTR also paid for a full-page apology in newspapers signed by Chien and Walder.

But Chew, who has already said he will step down before his contract ends, said he would take full responsibility.

He said: "I had a number of opportunities to flag the difficulties and the issue upward, in particular the review meetings that took place last October, December and March. "But I didn't say anything - not to the CEO, not to the board, the government, members of Legco or the public."

He conceded he had thought his team could double the excavation rate of the 26-kilometre tunnel to make up for the delay.

Walder, who made a phone call to Cheung last year asking him not to announce the delay, ducked lawmakers' calls to resign yesterday. He said the project was complicated and blamed poor communications.

Cheung said the bureau was seeking legal advice on whether the MTR should pay for the additional costs caused by the delay and whether the MTR should be awarded its management fee of HK$4.59 billion.

Michael Tien Puk-sun, chairman of the Legco railways subcommittee, said the extra costs could be as high as HK$6.2 billion, including HK$3.5 billion for prolonged construction work and economic loss to the city of HK$2.7 billion.

According to the agreement between the government and the MTR, the government may claim against the corporation if it breaches contractual obligations or if a delay involves a breach of warranties.

 

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