Soaring costs of Hong Kong's infrastructure projects demand a system overhaul
Lau Ping Cheung sees the need for an independent cost control authority
When construction of the high-speed rail link to Guangzhou began in 2010, the cost of the 26km project was estimated at HK$65 billion - a per-kilometre cost already far higher than that of the remaining 116km of express rail link on the mainland.
It didn't help when news of project delays and cost overruns, pushing the estimate to a whopping HK$71.5 billion, broke last year with no prior warning. That led to the resignation of MTR Corporation chief executive Jay Walder and his project director, who were accused of covering up the setback.
With the project's cost recently rumoured to be even higher, at somewhere around HK$90 billion, we can't help but wonder: "What is going on?"
Lawmaker Michael Tien Puk-sun, a former chairman of the Kowloon-Canton Railway Corporation, was quick to attempt to nail down the party responsible for the mounting costs: should the MTR Corp bear the outstanding cost or the government? But Tien has his focus wrong: whichever party is responsible, taxpayers will end up footing the bill, given that the government owns some 76 per cent of MTR's shares.
The focus should have been on what caused the overrun, and whether the cost control mechanism is effective, impartial, transparent and accountable, given that most, if not all, of the rail link will be paid for with public money.
Back in the 1990s, I alerted the government and KCRC as to the inferiority of the infrastructure cost control model compared with the building cost control model, to no avail. In Hong Kong, we have seen many times how there is a much higher chance of cost overruns in infrastructure projects, in comparison to building works.
For instance, it was recently revealed that the Hong Kong-Zhuhai-Macau bridge will also blow its budget. The government cited increased labour costs as the main culprit but what the public may not know is that infrastructure projects tend to be more equipment-, material- and management-intensive than labour-intensive.