KCRC chief in plea over payout

The KCRC has issued a plea for public understanding ahead of next week's release of a report into a controversial $100 million payout to a West Rail contractor.

KCRC chairman Michael Tien Puk-sun said auditors had completed the report into the corporation's deal with telecommunications contractor Siemens.

It is understood that the report concludes - without naming names - that those overseeing the project for the Kowloon-Canton Railway Corporation failed to study details of the bid from Siemens carefully enough. Mr Tien said the board of directors was now trying to decide what sensitive business data should be deleted from the report before it can be released to the public next week.

He said it would be up to the public to decide if anyone should be held responsible for the row, which erupted after it was discovered that Siemens was paid an extra $100 million above its agreed fee, despite not meeting contract requirements.

'How to qualify the charge of 'concealing what one knows of the case' is subject to interpretation,' he said. 'I think when the report comes out next week, everyone can make their own judgment.'

He said it would be difficult to differentiate between deliberately concealing the truth and releasing information too late.

'I just hope everyone can understand that in this world everything is not black or white. It is a question of levels,' he said.

The KCRC chief also said that some hitches with the West Rail project were understandable because it was such a major undertaking. 'It is the first time for many years that we have engaged in a major infrastructure building programme,' he said.

Mr Tien refused to comment on a report in the Chinese press yesterday that Chief Executive Tung Chee-hwa might have been aware of problems with the Siemens contract before the KCRC board, and had had talks about it with the head of Siemens.

Last night a government spokesman said that in November 2001, at the request of the KCRC, Mr Tung had told the chairman of Siemens that because of the major nature of the contract, Siemens should complete it on time.

The chairman of Siemens had been attending the Chief Executive's Council of International Advisers, meeting in Hong Kong.

'Aside from this, the Chief Executive was not aware of the KCRC's subsequent negotiations of the supplemental agreement with Siemens on the contract,' the spokesman said.

'The Government played no part in the negotiations. Decisions on the settlement were commercial decisions of KCRC.'

The KCRC launched an independent probe into the extra payout to Siemens, as well as 27 other supplementary agreements made for the West Rail project, totalling $1.53 billion, at the end of January following a public outcry.

The Siemens probe was initially meant to have been completed early last month but had to be delayed after the KCRC replaced KPMG Peat Marwick with Ernst & Young as external auditors following a row over the issue of indemnity.

The West Rail project, linking the northwest New Territories and Shamshuipo, is scheduled for completion next year.