21 April 2019
The government admits it would be difficult to recover the Express Rail Link's construction cost of HK$86.4 billion through the income generated by the railway service. Photo: MTR
The government admits it would be difficult to recover the Express Rail Link's construction cost of HK$86.4 billion through the income generated by the railway service. Photo: MTR

Will HK lose its global connection without Express Rail Link?

While public attention has been diverted to the latest government programs such as the adoption of container homes, the co-location arrangement for the Express Rail Link should merit our continuing concern as the government has pressed on with its campaign to promote the cross-border railway system.

In a closed-door seminar on Monday, Secretary for Transport and Housing Frank Chan insisted that Hong Kong, being in the southern tip of China, will lose connection to the world without the rail link. He said the rail link is important to the city’s long-term development as it will connect Hong Kong to Europe and Africa.

The government, along with MTR Corp., is sparing no effort to convince the public to support the rail link, particularly the joint immigration and customs checkpoint at the West Kowloon terminus.

The opposition camp is opposing the co-location arrangement as it believes the scheme will violate the Basic Law; it will allow Chinese law enforcers to perform their duties within the city’s jurisdiction.

But the government is using “speed” and “convenience” as its main arguments in promoting the scheme. They have placed television advertisements comparing the length of time it takes for Hong Kong people to travel to Guangzhou using the rail link and by the existing through train.

The ad campaign drew negative feedback from the public as it was using erroneous data in making the comparisons.

This time, Chan is exaggerating the importance of the rail link to Hong Kong’s status as an international transport hub, and conveniently ignoring the fact that the city’s reputation is built on its connectivity in airline flights and shipping lines, not railways.

In fact, the government is seeking to raise more than a hundred billion dollars to fund the construction of a third runway for the Hong Kong International Airport to enhance the city’s competitiveness as an international aviation hub.

Chan is bent on pushing through with the rail link, despite fears that it will be another white elephant.

Based on the government’s initial estimates, more than 80 percent of the trains departing from the West Kowloon terminus would be short-haul. The use of the high-speed rail system could be very low as many passengers are likely to opt for flights to travel long haul to northern China.

Still, the government refuses to discuss the co-location arrangement with the opposition. A group of activists proposed an alternative plan whereby the rail link’s joint checkpoint will be located at a mainland station, instead of the Hong Kong terminus. The proposal is aimed at avoiding the legal issue while maintaining the rail link’s advantage of convenience.

But the transport minister dismissed the proposal as “cumbersome” as south-bound passengers from the mainland would have to alight at the mainland station with the joint checkpoint facilities, before re-boarding. It will greatly diminish the rail link’s effectiveness as a high-speed rail network, he added.

The government refused to debate with the activists on the co-location arrangement, saying there is no need for such discussion if the group insists on their proposal.

But the most apparent reason for the government’s refusal to debate on the proposal is the question of how Hong Kong will recover the cost of the entire project.

In a paper prepared for the Legislative Council, the government admitted it would be difficult to recover the project’s construction cost of HK$86.4 billion through the income generated by the railway operation. The government can only share the profit, if any, in the future.

According to the document, the government will sign an agreement with the government-owned KCRC to lease all the assets related to the Express Rail Link, and KCRC will pay a small amount of fees for the use of those assets. Then KCRC will talk to MTR for a service operating agreement that will grant MTR the right to operate the Express Rail Link.

In return for the land, interest and rights, KCRC will pay a premium of HK$1,000, and an annual rent equivalent to 3 percent of the rateable value of the land for 50 years.

The government admits the arrangement will not allow for the recovery of the project’s capital costs.

The MTR will assume the rail link’s operational right as early as December, enabling the railway operator to start preparing for the start of the service.

The government said the asset transfer would not affect the public and so it has no plans to consult the public on the arrangement. However, it did not mention MTR’s responsibility in handling the budget during the construction.

The Express Rail Link plan, which started way back in 2008, is a political project. The Hong Kong government, with the support of Beijing loyalists, is simply taking part in the completion of the plan of the central authorities to build a national rail network.

There is no consideration of market demand, as the new service has low efficiency compared with the existing through trains and flights between Hong Kong and the mainland.

Does Minister Chan really believe that the people of Hong Kong will buy his line that “Hong Kong will lose its connection without the Express Rail Link”?

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EJ Insight writer

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