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Stalled rail link given the green light

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Government to shoulder HK$37b Sha Tin-Central Link costs

The final piece of a puzzle that will complete two mega-railway corridors finally fell into place when the Executive Council gave the green light for the long-stalled Sha Tin to Central rail line yesterday.

Delayed by the merger talks between the MTR Corp and the Kowloon-Canton Railway Corporation, the line - originally scheduled to start operating this year - will now be completed in 2019.

The government said yesterday it would adopt a 'service concession approach' for the project. This meant it retained ownership of the line by shouldering the entire HK$37.4 billion construction cost. It would lease the line to the MTR Corp for 50 years, for an estimated return of HK$91.8 billion.

Secretary for Transport and Housing Eva Cheng said such an approach would put the government in a better position when renegotiating with the MTR Corp on the renewal of the lease for the operating rights for the former KCRC network, including East Rail and West Rail, which also expires in 50 years.

Lawmakers and analysts welcomed the decision, saying the government would enjoy greater freedom over the line's financing and get to keep valuable land at Diamond Hill that was originally tipped to be granted to the MTR Corp to subsidise the rail operator for building the line.

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