The government and its majority owned railway operator MTR Corporation (0066) have dismissed claims by a local newspaper that the Express Rail Link under construction would be finished late and over budget.
Secretary for Transport and Housing Anthony Cheung Bing-leung said the bureau has all along been in close contact with the MTR Corporation (0066) on meeting targets on progress and budget which he said were “very important”.
“Up till now, according to the assessment’s given by to us by the MTRC, these targets can be met,” Cheung said.
The rail link is scheduled for completion in April 2015 to allow testing and commissioning before formal commencement of service later in August.
An MTRC spokeswoman reiterated that the target completion of 2015 remained unchanged and said during the planning and design stage, the company made a careful assessment of the best design and method of working for the project.
“Nevertheless, it is unavoidable to encounter unforeseen problems during the construction stage for large infrastructure of this scale. As such, additional and more appropriate resources and alternate construction method or design might by deployed by contractors to suit the actual conditions encountered on site from time to time,” the spokeswoman said.
“The additional costs, if any, will be covered under the contract terms and conditions.”
She added that in the approved budget, a contingency fund was included to meet unforeseen conditions during construction stage.
“The latest estimation of the contingency fund is sufficient and the total project cost will be within the approved budget,” she added.
A story on Tuesday by the Apple Daily newspaper claimed that completion of the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link could be late by at least one year and with a cost overrun of HK$4.4 billion, or 12 percent over budget.
“Several contractors earlier had a meeting with MTRC top management and said that the construction of the Express Rail Link may not be completed by 2016. The top management simply had no stomach to hear anymore and dismissed the contractors,” a source was quoted as saying to Apple Daily.
When the MTRC announced its annual results in March, it said the Express Rail Link was 31 percent complete at the end of 2012.
The Finance Committee of the Legislative Council approved funds totalling HK$66.82 billion at money-of-the day (MOD) prices for both the railway work and non-railway work in January 2010.
In the approved project estimate, a contingency sum totalling HK$5.4 billion before addition of the inflation (MOD) factor for both railway and non-railway work was included.
According to the paper prepared by Transport and Housing Bureau for the Public Works Subcommittee of the Finance Committee, the cost of the terminus and tunnels was put at HK$9.5 billion and HK$19 billion respectively before inflation factor.
The budget includes other items as well such as emergency rescue station and stabling sidings in Yuen Long (HK$3.2 billion), building services (HK$2.5 billion) and railway electrical and mechanical works (HK$5.7 billion).
The management cost for the MTRC for the design and supervision of construction was estimated at HK$3.3 billion for railway work and HK$699 million for non-railway work.
The rail project is being constructed using the concession approach whereby the government pays for the cost of the infrastructure and receives service payments by the MTRC for operating the railway under a concession agreement.
The Apple Daily report said delays and cost overruns were most serious at the West Kowloon Terminus North contract, which is being built by the Leighton–Gammon Joint Venture.
The MTRC awarded the contract in October 2011 at a contract sum of HK$8.9 billion, the single biggest award for the Express Rail Link project.
According to Express Rail Link documents obtained by the Apple Daily, the station contract has been plagued by delays and numerous changes in design such that a redesign had to be carried out on the run with construction.
The story said the contractor criticised the hesitation and indecision of the MTRC on provision of technical details and the general lack of coordination.
Apparently there has been unusual movement in the earth-retaining walls at the terminus and the contractor has had to carry out remedial measures.
Due to delays and design changes, the contractor has submitted claims totalling more than HK$1.2 billion, according to the project documents.
Apart from the Terminus North contract, the other main civil works for the project consists of West Kowloon Terminus South, which will serve the future West Kowloon Cultural District, and a 26-kilometre railway tunnel of which there are seven contracts.
Delays of different magnitudes have been experienced as well for the tunnels with 24-hour working being imposed for the Tse Uk Tsuen to Shek Yam Tunnels to make up time due to delays caused by water seepage to the tunnel boring machine.