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  • Jul 26, 2014
  • Updated: 5:15am

MTRC

The MTR Corporation (its original full name was Mass Transit Railway Corporation) is listed on the Hong Kong Exchange and is a constituent of the benchmark Hang Seng Index. MTRC operates the Hong Kong underground rail system and is a major property developer and landlord in the city. It also invests in railways outside Hong Kong.

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TRANSPORT

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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16

This article is now closed to comments

geraldyu
The Government should sue the MTR management for negligence.
mdap
Hilarious - the MTR is not a private company, any fines would simply be passed on to Hong Kong tax payers and users of the MTR! The management should be fired and criminal investigations based on gross incompetence levied at those in charge. This is more evidence of Hong Kong's inability to function and get things done - fire the lot of them and get some of the much maligned competent Hong Kong people running our corporates.
joyalsofi
Unless the payment of fines comes directly out of the salaries of those in charge of the MTRC, it will be the riders and taxpayers who ultimately have to cover the fines. What incentive is there for the MTRC to get things right when those responsible are more interested in retail and property development than their supposed core mission and don't have to actually foot the bill?
wailamtmhk
MTR is owned by the government. Saying MTR should pay the bill would simply be taking the money out of the left pocket instead of the right pocket - no matter where the money comes from the average HK citizen will still end up paying for this massive white elephant.
captam
The high speed link with the Mainland is not a "white elephant".
It is the one recent massive Government-funded infra-structure project which makes economic sense and which Hongkongers should welcome.
It will connect our territory directly with the Mainland's brilliant and world-leading HSR network and help reduce pollution from unwanted and unnecessary cross-boundary vehicle and aviation movements. Railways provide the cleanest and most economic form of transport per passenger-mile.
ejmciii
What are the damages from this breach? CYL has looked bad to his masters in Beijing? No damages to HK in delaying the onslaught from up north, but instead a benefit.
Dao-Phooy
CY, the Ministers and the Mandarins have agreed the concept of 'accountability' no longer apply because this is one of their entitlements.
chuchu59
So a minister can lie, make an apology and CY will let him off the hook. Weeks ago he lied straight into our faces with the 'thunderstorm excuse'. If he is let off, other officials will likely follow suit with nothing to fear. Heads need to roll to preserve the government's reputation.
How About
Instead of firing Raymond Chien and Jay Walder, how about a punitaive clause in the new contract to work exactly at what they are doing for half price and half the perks? The guys still gets the pork barrel smiley handshake clause even if they get fired, so why not make them stay and FIX the mess they help created, with the reality they are doing it for half the perks?
.
Another fix is needed to forestall the poor ticket sales of the HSR in 2 years' time- now if the regular HSR traffic isn't anywhere near its projected figure, and it won't be, what will MTR do to fix this white elephant? Scenic cross border shuttle trains?
.
r6b
" why not make them stay and FIX the mess they help created"
Because it was a political timetable that MTR was forced to accept, and only slightly technically achievable if there were no unforeseen construction obstacles or delays.
Its no different than the political pressure exerted on HK Airfreight Terminals to move to CLK, before their warehouse was completed and fully tested.
Its worth remembering these are the same politicians, who dishonestly say the HKMZ bridge will get you to Zhuhai in 30 minutes, when everyone knows it takes at least 40 minutes from TST to the airport.
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