MTR Corp. (MTRC) is under fire after increasing its management fee by more than half for the much delayed Hong Kong section of the cross-border high-speed rail project.
Construction is three years behind schedule from its scheduled 2015 completion, ratcheting up costs to HK$85.3 billion (US$11 billion), about HK$20 billion overbudget.
The increase in management fee means the rail operator is now charging HK$7 billion, according to Ming Pao Daily.
The government announced the revised budget projections on Tuesday.
A spokesperson for the Transport and Housing Bureau said MTRC has yet to finalize details of its new management fee, which covers the three-year delay.
For 2010-2015, the original construction period, it was paid HK$4.59 billion.
MTRC requested an extra HK$2.5 billion for an additional 33 months of management services.
However, there was no mention in its 2014 annual report about an agreement with the government to cap its management fee at HK$2 billion a year or HK$10 billion for the entire project.
As of the end of 2014, MTRC had collected HK$819 million in management fees.
Legislator Michael Tien said the agreement is unfair and “ridiculous” because it does not bind MTRC to any delivery targets, he said.
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