Controversy over the delayed HK$67 billion high-speed rail link descended into farce last night.
The man appointed by the government to head up an independent probe into the row resigned after it emerged he was on the board of one of the project's main contractors.
The move came two hours after government minister Professor Anthony Cheung Bing-leung announced that former University of Hong Kong pro-vice-chancellor, Professor Lee Chack-fan, would chair an expert investigative panel.
Lee was then revealed to be an independent non-executive director of Paul Y Engineering, a key contractor on the rail link's underground terminus in West Kowloon, where excavation difficulties have been pinpointed by the MTR Corporation as being at the centre of the delay.
Lee, a respected geo-technical engineer and past president of the Hong Kong Academy of Engineering Sciences, could not be contacted for comment. But the Transport and Housing Bureau - of which Cheung is the head - confirmed Paul Y was awarded two contracts on the project and said it was not aware of Lee's role in the company when it invited him to lead the probe. The bureau said it would appoint a suitable expert as early as possible.
A government source admitted the appointment was a "hiccup" and said: "We value the panel's credibility so we accepted his resignation as soon as we knew about it."
Cheung's announcement was seen as an attempt to save the government from accusations of a possible cover-up by the corporation over the two-year delay to the railway to Guangzhou. It came as the MTR Corporation admitted it was confident it could cope with the project's challenges in a report submitted to Legco yesterday.
The expert panel was set up in addition to an internal probe pledged by the corporation on Tuesday. But Cheung denied it was a delaying tactic to head off public criticism. Pan-democrat lawmaker Wu Chi-wai said he now had little confidence in the inquiry into the controversy.
The corporation apologised yesterday for not providing proper communication regarding the delays. But a source close to the MTR insisted there had been no cover-up as the management had been informed by its projects director, Chew Tai-chong, that the difficulties facing the project could be overcome.
"The management was still informed that the project would meet the deadline in December last year," the source said.
While worrying that further delay could be caused by lawmakers who plan to launch an investigation by invoking the Legislative Council's special powers and privileges, the source said the corporation would open its project documents - including contracts - to lawmakers who are willing to sign a non-disclosure agreement.
It will also accept recommendations from the expert panel.
Although two special powers and privileges proposals by pan-democrats were voted down yesterday, lawmakers said they would not rule out trying to invoke the powers again.
Rail delay revelation blocked in November
The government had wanted to tell the public that the high-speed railway project could not be completed on time as early as November, but it was stopped by the MTR, a report has revealed.
The report, prepared by the Transport and Housing Bureau and submitted to the Legislative Council last night, revealed that transport minister Professor Anthony Cheung Bing-leung knew that the tunnelling works could only be completed by October next year at the earliest, meaning the target opening date of end-2015 may not be met.
He had wanted to inform the Legislative Council's railways subcommittee on November 22, but MTR chief executive Jay Walder asked him not to reveal the information, saying it was still feasible to complete all the works on schedule.
The government report also said the Highways Department had asked the MTR to present a detailed plan to show how the works could be finished on time, even before flooding in Yuen Long damaged a tunnel boring machine. The MTR described the incident as a "critical point" when it announced the delay on April 15.
The MTR was supposed to submit the plan in April before the deadline was extended to this month. After the delay was announced on April 15, the department again asked the MTR for the plan, but to no avail.
Another report submitted by the MTR discloses that the company may have to seek extra funding for the project after conceding that the original HK$67 billion budgeted may no longer be enough. A confidential document seen earlier by the Post showed the project could now cost up to HK$69 billion.
The MTR said it would inform the government in a timely manner if it needed more money.
The government said if the MTR had breached its agreement, it could be asked to pay the extra costs itself, and the government could seek damages from the MTR.The company conceded that its teams were "over-confident" that the project could be completed on time.
"Even though it was evident that the project may not be completed in 2015 as scheduled based on the accumulated delay of a few contracts, the engineering team still reported to the MTR board and the government that it would be delivered on time for a certain period of time."
Democratic Party lawmaker Wu Chi-wai said the report showed the government, which has a 76 per cent stake in the MTR, was losing control of the corporation. He will consider invoking the Legislative Council's special powers to investigate.
New People's Party lawmaker Michael Tien Puk-sun said the document raised questions about why the government trusted everything projects director Chew Tai-chong told it, without looking into the possible delay.