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Hong Kong high-speed rail

Guangzhou-Shenzhen-Hong Kong rail link ‘will be profitable’, city transport chief says

Frank Chan Fan optimistic but gives no details on how the controversial project will make money after signing MoU with Beijing officials

PUBLISHED : Monday, 29 January, 2018, 9:30pm
UPDATED : Monday, 29 January, 2018, 10:48pm

Hong Kong’s transport chief on Monday gave an optimistic financial outlook for the controversial HK$84.4 billion high-speed rail link to the mainland, saying the line would turn a profit in 50 years despite failing to produce figures to back that up.

Secretary for Transport and Housing Frank Chan Fan made the upbeat estimation after signing a memorandum of understanding with national high-speed rail operator China Railway Corporation on operational matters concerning the link’s Hong Kong section, which was expected to open in the third quarter.

High-speed Hong Kong rail link has to be on right track

The rail has been the centre of controversy not only because it is HK$19.6 billion (US$2.5 billion) over budget, but also because of a proposed joint checkpoint where mainland immigration officers would be able to enforce national laws at a part of the city’s West Kowloon terminus leased to them. Critics – including city legislators from both the establishment and opposition – have said the arrangement could impinge on the rights of Hongkongers.

The memorandum signed on Monday set out some operating principles of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, including destinations, number of trains, fares and how to split income.

We are of the opinion that the express rail link would be having a very healthy financial outcome by the end of this cycle.
Frank Chan Fan

Under the memorandum, there would be 254 trains, or 127 pairs, of which 114 pairs are short-haul trains running daily between the West Kowloon terminus and four mainland stations in Shenzhen and Guangdong on 130 “peak days” a year. Another 13 pairs are long-haul trains travelling to 14 popular destinations such as Beijing, Shanghai, Kunming, Guilin and Hangzhou.

The train schedule is adjustable according to demand.

Chan said both sides reached an initial consensus on how to split fare income but the details would be finalised later.

“The income-splitting mechanism will need to take into account the rail’s operating and maintenance expenses, etc … From the preliminary figures, I am confident that the express rail link will be able to achieve healthy finances,” he said.

However, Chan failed to deliver any figures to support his forecast, only saying the project would be profitable at the end of its 50-year operating period.

“We don’t have a crystal ball. We need to work on an assumption, if we are taking the assumption of 50 years being a life cycle of the express rail link … we are of the opinion that the express rail link would have a very healthy financial outcome by the end of this cycle,” he said, adding that they were now studying fare concessions to attract passengers.

Critics of joint checkpoint rail ‘irrational’ as solid legal basis exists for plan, city’s leader says

Earlier the government announced that travellers from Hong Kong to Guangzhou would have to pay HK$260 (US$33) per trip while fares from West Kowloon to Futian in Shenzhen, Shenzhen North and Humen in Dongguan city would be set at HK$80, HK$90, and HK$210, respectively.

However, Chan said the fares for long-haul trips had yet to be finalised.

Civic Party lawmaker Jeremy Tam Man-ho said the 13 pairs of long-haul trains run on only four lines.

“If you do the maths, that means there would be only one pair of trains on each line every four to five hours. How is that exactly convenient for travellers?”

Hong Kong Law Society warns lack of clarity on joint rail checkpoint could undermine ‘one country, two systems’

Pro-Beijing lawmaker Michael Tien Puk-sun said it was reasonable for the government to foresee a profit over a 50-year cycle.

He suggested adding more routes and frequencies on a gradual basis, as he feared too many trains at once would add to unnecessary costs.