More signs of trouble in high-speed rail project

September 22, 2015 10:08
Doubts are surfacing whether the Hong Kong-Shenzhen-Guangzhou high-speed rail project can meet even the revised deadline of 2018. Photo: Xinhua

Rising costs, unsettled claims of some contractors and potential withdrawal of some parties are the three factors casting a cloud over the Hong Kong-Shenzhen-Guangzhou high-speed rail project right now, leaving a question mark whether it can be completed in the third quarter of 2018 as scheduled.

As the project has undergone several delays from its original target completion year of 2015 and also overshot its budget, fresh doubts are emerging over the venture, Ming Pao Daily reported.

The latest estimate of the cost is HK$85.3 billion (US$11 billion), compared to the original HK$65 billion budgeted by MTR Corp.

The existing funds could run out within a year, according to the report.

Latest figures from the Transport and Housing Bureau show the accumulated expenditure of the project as of end-June reached HK$46.8 billion, HK$1.6 billion more than the total worth of awarded contracts since construction began in 2010.

An MTR spokesman said the company will closely monitor and control costs, while the Transport Bureau said it will find solutions.

Meanwhile, contractors have lodged claims against the government for unsettled payment that amounted to HK$17.4 billion as of end-June, up 50 percent from HK$11.7 billion at end-2014. 

As authorities have kept the remaining funds as contingency, it mat take a while before the contractors are paid, the report said.

MTR said it is in discussions with the claimants. A jump of claims is mainly due to unforeseen geological factors that caused delays, the rail firm said.

Meanwhile, lawmaker Michael Tien, who heads a railways subcommittee at the Legislative Council, cited some contractors as saying that they are considering walking away from the project if the deadlock continues as to who will bear the extra costs for the project.

MTR and the government have been discussing the issue for quite some time but no consensus has been reached yet.

Tien said construction work at the West Kowloon Terminus is suffering a very serious delay, mainly due to the massive glass ceiling designed for it.

It may have a crucial bearing on when the high-speed rail can really go into operation, he said.

-- Contact us at [email protected]