Date
23 October 2017
Work delays on the Hong Kong-Guangzhou high-speed rail link are said to be causing financial problems for some contractors. Photo: HKEJ
Work delays on the Hong Kong-Guangzhou high-speed rail link are said to be causing financial problems for some contractors. Photo: HKEJ

Contractors face cash-flow woes amid high-speed rail delay

Some contractors involved in the Hong Kong section of the cross-border high-speed railway link are facing cash-flow problems due to project delays, the Hong Kong Economic Journal reported Wednesday, citing a top executive at Chun Wo Development Holdings (00711.HK). 

Chun Wo, which is one of the contractors in the rail project, had to put off some work by about a year, the firm’s executive deputy chairman Derrick Pang Yat-bond was quoted as saying.

Pang, who is also deputy honorary secretary of the Hong Kong Construction Association, said the association and contractors have called on the government to assist in handling the claims arising from the project. About 400 claims involving over HK$8 billion are said to have accrued as of the end of March.

The government should, for the moment, put aside the accountability issue with regard to the project delay, and instead focus on paying the claims in advance, Pang said.

MTR Corp (00066.HK) has received 611 claims from contractors, covering HK$10.76 billion as of the end of March. Resolved cases are said to number 137, involving combined payment of HK$1.4 billion.

The high-speed railway linking Hong Kong with Guangzhou is now expected to cost up to HK$80 billion, according to experts. That compares with the HK$68.4 billion budgeted four years ago.

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Freelance journalist

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