Like an express train, the cost of the Hong Kong-Shenzhen-Guangzhou high-speed rail project is fast outpacing its budget.
When the Hong Kong section of the project was launched in 2010, MTR Corp. set a budget of HK$65 billion (US$8.38 billion), but because of delays and other factors, it was increased to HK$71.52 billion last July. Then last month it said the cost could rise to HK$85 billion.
Now the latest estimation has reached nearly HK$90 billion, overshooting the original budget by 40 percent, Sky Post reported on Wednesday, citing unnamed sources.
The company is set to unveil the revised budget for the rail link by mid-June, the newspaper said.
An MTR spokesman declined to comment on the budget overrun but admitted that the cost will increase significantly because of the complicated engineering work, especially for the West Kowloon terminus.
The company will have to review the cost estimation and target completion date, he said.
The spokesman did not say if the project will be delayed further, but said the company will release a report before the end of June.
The government said it is studying whether there are violations of the construction agreement and if persons are responsible for negligence, adding that it will reserve the right to pursue the matter in a court of law.
According to the agreement, the government can seek for compensation from MTR for any violations, but the amount is capped at HK$4.59 billion.
This suggests that the government may have to shell out another HK$20 billion should the cost reach HK$90 billion, the newspaper said.
Legislator Michael Tien, who heads the railways subcommittee at the Legislative Council, said MTR may blame the budget overrun on geological factors affecting the construction of the West Kowloon terminus and thus claim that it should not bear any of the additional costs.
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