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Pressure over budgets after cost blowout

Government's request for extra HK$7.9 billion in funding to build the Central-Wan Chai bypass leads to demands for better cost projection

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A view of the Central-Wan Chai bypass. Photo: David Wong

The government is facing increasing pressure to review its method of estimating the construction costs of public projects, as it urged lawmakers yesterday to approve an additional HK$7.9 billion in funding for the Central-Wan Chai bypass.

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A view of the Central-Wan Chai bypass. Photo: David Wong
A view of the Central-Wan Chai bypass. Photo: David Wong
The extra funding is a 28 per cent increase from the originally budgeted HK$28.1 billion, estimated in 2009, to build the 4.5 kilometre dual three-lane road.

The bypass, of which 3.7 kilometres is a tunnel, will cut a 15-minute trip from Central to North Point to just five minutes.

Undersecretary for Transport and Housing Yau Shing-mu said the extra money was needed because of a significant underestimation of costs. His remark triggered lawmakers' comments that the government's method of projecting construction costs was in need of a review.

"This is a special case as the global economy was having a hard time in 2009," Yau told transport panel lawmakers. "The estimation was a difficult one."

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Statistics showed the government assumed an annual cost increase of 2 per cent and 3 per cent over the period from 2009 to 2013 and 2014 to 2019, respectively. But the actual increases recorded in 2011 and last year were 5.9 per cent and 6.3 per cent.

Chief highways engineer Lawrence Ho Kai-ming said the deeper bedrock profile, which was not expected at the design stage, also added to costs.

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