MTR Corp. (00066.HK) lied when it blamed bad weather for the expected delays in the completion of Hong Kong’s high-speed rail link to Guangzhou as it knew budget overruns and changes in details of the projects would push back its original timetable even before the rainstorms came, local media reported Thursday, citing an internal MTRC document.
The cross-border rail project is now estimated to cost at least HK$81.7 billion (US$10.5 billion), exceeding the original budget by about HK$15 billion, the document showed.
The rail operator will need an extra HK$11.81 billion following changes in the design and specifications, and of this amount, HK$3 billion will be spent on measures to speed up work amid the delays, Ming Pao Daily said, citing the document.
“Earlier this year, MTRC has already forecast a budget overrun of HK$14.8 billion due to construction delays,” Apple Daily reported.
The newspaper said the rail operator knew there would be the delays long before the rainstorm arrived.
“MTRC estimated in January that the tunnel construction would be delayed by nine months from the original schedule for completion, which is December 2015, even before the black rainstorm signal was raised,” Apple Daily said.
Also in January, the company “increased the budget by HK$15 million as it knew the late arrival of the equipment would cause a delay”, it said.
MTRC did not mention any of these factors during the press conference announcing the delays, the newspaper said.
The rail operator on Tuesday said bad weather has delayed work on the cross-border rail network. A heavy rainstorm on March 30 destroyed several of the tunnels and construction sites, and the project, originally scheduled for completion in 2015, may not start operation until 2017.
Secretary for Transport and Housing Anthony Cheung has demanded a full report, saying he was surprised by MTRC’s announcement. Legislators are calling for a full-dress investigation.
“The budget for the express rail project has increased to HK$65.1 billion in July from the original HK$55 billion. MTRC has again raised the budget to HK$68.4 billion in January, up HK$3 billion within half a year,” Ming Pao said.
The newspaper quoted an engineer as saying that the company would have to spend an additional HK$15 billion if the project is delayed by two and a half years, as it is now projected, given that it increased spending by HK$3 billion for a half-year delay.
Apple Daily said the MTRC document showed that only one platform would be operational during the launch in December 2016, while the 14 other platforms would still be under construction.
MTRC said Tuesday construction will be fully completed by August 2017.
Secretary Cheung said Wednesday the government did not hide any information from the public about the rail project, noting that the report his office received from MTRC last month showed it would be completed by next year, Hong Kong Economic Journal reported Thursday.
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