Dispute over HK$1.37 billion fee for scandal-hit project pits Hong Kong rail giant the MTR Corporation against its biggest shareholder, the city’s government

Lawmakers question whether Sha Tin-Central link, Hong Kong’s most expensive railway project, will cost more than estimated HK$90.7 billion

Latest estimate also excluded HK$1.37 billion in additional project management costs, which government refused to pay to company

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The first phase of the link, connecting Wu Kai Sha to Kai Tak, opened last month. Photo: Martin Chan

Published: 6:48pm, 3 Mar 2020Updated: 6:54pm, 3 Mar 2020

Hong Kong’s rail operator the MTR Corporation on Tuesday left open the possibility of taking legal action against the government, its biggest shareholder, for payment of a HK$1.37 billion (US$175.6 million) management fee in the contract to build the scandal-plagued Sha Tin to Central link.

The dispute left lawmakers questioning whether Hong Kong’s most expensive railway project would cost more than HK$90.7 billion, the latest estimate released last week, but officials insisted the government would not pay the company a dollar more than it deserved.

According to the government’s latest figures, the much-delayed Sha Tin-Central rail link is estimated to overrun its budget by a revised HK$10 billion. In December 2017, the embattled rail giant said the 17km line was expected to come in at HK$16.5 billion above budget, meaning the cost could reach HK$97.1 billion.

Frank Chan says the government will not seek any extra funding for the project after the latest round. Photo: May Tse

The latest estimate also excluded HK$1.37 billion in additional project management costs, which the government refused to pay to the MTR Corp.

“We do not see sufficient grounds to pay it,” Secretary for Transport and Housing Frank Chan Fan said when pressed by opposition lawmaker Alvin Yeung Ngok-kiu during a Legislative Council meeting on Tuesday.