'Some opposition politicians will complain the cost of an MTR project is too much or some local residents may lose out.'
China RailWorld Summit, Beijing
SCMP, January 24
Stand anywhere that gives you a clear view across the harbour from the Central waterfront and you will notice an oddity, a ring of densely packed very tall buildings just the other side of that piece of Kowloon wasteland dubbed a cultural district.
Tall buildings sprouted all over Kowloon when height limitations were lifted with the relocation of the airport from Kai Tak in 1998 but, even so, this ring of new buildings is an oddity. It sits distinctly separate from the rest of Kowloon and around it all is still just muck, construction rubble and temporary roadways. What strange planning anomaly spawned this ugliness?
It was an ugliness created for the benefit of the Modern Town Redevelopment Co (MTRC), otherwise known as the Mass Transit Railway, an entirely inappropriate name as, aside from station advertisements that present it mostly as a promoter of women's underwear fashions, it is primarily a property firm that operates loss-making railways as a sideline.
And whenever it is about to crawl out of loss at last, it proposes some new uneconomic railway project so it can stay in the red forever.
What happened in this case is that our Donald, when he was financial secretary back in 1999, publicly said he could value this thing at HK$100 billion when listing it on the market. That was until he mentioned this figure to the investment bankers, who told him that the public purse may have put HK$100 billion into the MTR but the investing public wouldn't value it at much more than HK$20 billion.
Now, if you are not aware of it yet, you ought to know that our Donald cannot bear to lose face and would rather put Hong Kong's finances at risk. He did it a year earlier with a HK$120 billion stock market bet when the market wouldn't do what he wanted it to do and was quite happy to do it again to get his way with the MTR.
He directed his minions to the reclaimed land over the water and said (and these are his exact words, I swear it), 'Take that big reclamation site there, stick it into the MTR, raise all the building height limitations to as high as the orbit of the moon and sell it to Sun Hung Kai Properties. Now have I got my hundred billion?'
Yes, boss, they said, and he did.
I tell this story to demonstrate the cavalier attitude that government politicians, as distinct from opposition ones, routinely take towards the economics of transport projects. More cavalier yet, however, is the attitude that transport engineers and consultants, such as the one quoted at the top of this column, adopt towards money when licking their chops at the prospect of building a new railway. Bring them together and they go wild. The one I quoted treated cost as worthy of no more consideration than obstructions created by placard-waving villagers trying to get more than the already extortionate payments given them for moving.
It is the sort of thing, he implies, that you get from opposition politicians, you know, self-seeking troublemakers who throw sand in the wheels of progress. We don't have such irresponsible elements in Beijing. Why do you people in Hong Kong tolerate them?
Let's set this warped picture straight. If we in Hong Kong choose not to cover our commuting costs through the fares we pay, then we must pay some other way. The one we have chosen is through our greatest treasure - publicly owned land. It all contributes to higher prices and rents for housing. Stop complaining about the property market if you take the MTR.
The same conundrum faces transport planners on the mainland. But instead of opting for what the MTR calls the 'property model', they have chosen to raise money by raiding their banks. I can't give you exact figures for how much of this till-pillaging has gone on as cost is either so little regarded in Beijing that no one has bothered to publish proper figures or so horrendously out of line with returns no one has dared to. We do know, however, that the private sector has scorned high-speed rail, although original projections called for it to be a significant contributor and we do know that the shortfall has been made up by leaning on the banks.
This is no rail network in the making. This is rather a budding bank crisis.