MTR should bear surplus costs for Guangzhou rail link, says Legco transport panel chairman

The MTR Corporation should bear any cost exceeding HK$80 billion for the already delayed and over-budget high-speed rail link to Guangzhou, the chairman of the Legislative Council's transport panel said yesterday.

Michael Tien Puk-sun said he had heard the rail company had estimated five to seven years ago that the project would cost HK$80 billion.

But he said it had accepted a government counterproposal to build the 26km rail link to the border for just HK$65 billion. The line was supposed to open this year, but completion has been pushed back to at least 2017.

"What I have heard is that the MTR did not make a wrong calculation nor did the government force the MTR to accept the [HK$65 billion] price tag without a reason. The difference was based on a different assumption," Tien said after appearing on a television programme.

He believed the government thought contractors would tender the project at a lower cost because of the poor economic conditions at the time, whereas the MTR believed costs would rise as the economy improved.

Any cost overrun above HK$80 billion should therefore be regarded as a result of MTR mismanagement, Tien added, meaning the government would have to seek an extra HK$15 billion from Legco. He believed it could be a starting point for negotiations between the administration and the corporation.