MTR Corp should pay part of railway delay cost, experts say

PUBLISHED : Wednesday, 13 August, 2014, 4:34am
UPDATED : Wednesday, 13 August, 2014, 10:39am

The MTR Corporation should pay part of the HK$4.62 billion in extra costs that the delayed cross-border high-speed rail link is expected to incur, experts in transport and engineering say.

It was likely the bill would be split between the government, MTR Corp and contractors as the railway giant was responsible for some parts of the two-year delay in the project, veteran transport analyst Dr Hung Wing-tat and engineer Dr Greg Wong Chak-yan both said yesterday.

The MTR Corp could claim against its contractors if they were found at fault, Hung, of Polytechnic University, also said.

On Monday, the company released its latest estimate of the project cost - HK$71.52 billion, 6.9 per cent more than the HK$66.9 billion the Legislative Council approved in January 2010. It said the new figure was based on "a detailed review of the revised programme" that would now see the link finished in 2017.

Hung and Wong said given the scant details, they could not tell if the figure was reasonable.

But "at least, extra costs incurred from the delay of the West Kowloon terminus construction should be paid by the MTR Corp", Hung said.

"Even if there are unforeseen ground conditions at the site, the MTR should have included the variables in the original budget."

Two reasons that have been cited for the delay were rocks and boulders at the terminus that posed difficulties for excavation workers, and heavy rain in March that damaged a tunnel-boring machine.

Wong, who used to work for MTR Corp, expected any new estimate to include costs incurred by factors both within and outside the company's control.

"For example, in the case of adverse weather conditions, it's God's responsibility, so the government would have to pay," he said. "What I worry is there could be more claims from contractors, as they would know only the amount of claims to date."

The government holds a 76 per cent stake in the MTR Corp.

It is funding the Hong Kong side of the West Kowloon-Guangzhou rail link and has entrusted the MTR Corp with the construction in an agreement that states, "The corporation must use its best endeavours to complete or procure the completion" of the project.