Cross-border rail link may be profitable in 8 years, Hong Kong transport chief says in optimistic U-turn
Frank Chan Fan plays down cost concerns, saying that focus should instead be on the economic benefits project will bring to city
The HK$84.4 billion (US$10.8 billion) cross-border high-speed rail link may become profitable in eight years after being launched, Hong Kong’s transport chief said on Saturday in an apparent U-turn from an earlier forecast that tipped the project to be loss-making for decades.
But Secretary for Transport and Housing Frank Chan Fan stressed that Hongkongers should not judge the development based on its profitability. He said the focus should be on the economic benefits it would bring.
The Guangzhou-Shenzhen-Hong Kong Express Rail Link is set to open in September after being plagued by years of construction delays and budget overruns.
Few details are yet available, however, on how the massive project would be financially sustainable, as critics have argued that there are many alternative – and cheaper – options in the market.
Without backing up his claim, Chan said earlier on Monday that the rail link would be able to turn a profit after 50 years. The forecast instantly raised eyebrows, as it implied that the operator, MTR Corporation – of which the government is a majority shareholder – would have to cover losses for decades.
Chan admitted on Saturday that it would “not be surprising” for MTR Corp to bear losses in the preliminary stages, but he also offered a more optimistic prediction than the one he gave earlier.
“If we remain confident, I believe this investment will start seeing returns within eight to 10 years,” Chan said, adding that the project would be self-sustaining in the long run.
He pointed out that one source of income would be from rents for retail and catering facilities, expected to be a lucrative business, at the West Kowloon terminus.
“But financial concerns are secondary in this kind of infrastructure project … We should not be so short-sighted as the rail link will drive Hong Kong’s economy, such as the tourism sector,” Chan said.
One last hurdle for the government is to convince lawmakers to approve a legislative amendment which will carve out parts of the West Kowloon terminus as a “mainland port area”, in which national laws will apply.
Called the co-location arrangement, it aims to bring border clearances for two jurisdictions under one roof, saving time and sparing travellers from further hassle. But the joint checkpoint plan has sparked concerns over its legality, with critics arguing that the city’s autonomy would be undermined.
“The draft bill is relatively simple – there are only three chapters and eight clauses … If we deal with the matter as it stands, it should not take too much time,” Chan said.
A similar – but reversed – bill to incorporate 42 hectares (104 acres) of Shenzhen land into Hong Kong territory to facilitate the construction of the Shenzhen Bay Control Point took 2½ months to vet in 2006.
“If we can get things done by May, it is still an ideal time frame to work with,” Chan said.