XRL project facing 339 claims

XRL project facing 339 claims

Total claim amount now tops $5.58b

Contractors have continued to pile on the pressure at the troubled Express Rail Link project of the MTR Corporation (0066) with the number of unresolved claims and claim amount continuing to mount.

According to a half yearly progress report issued last Thursday by the Transport and Housing Bureau for the Legislative Council’s Subcommittee on Matters Relating to Railways, the number of unresolved claims stood at 339 as of 30 June 2013, up from 221 claims recorded six months earlier.

The corresponding amount claimed by contractors stood at HK$5.58 billion compared with HK$3.64 billion as of 31 December 2012.

For the West Kowloon Terminus the number of claims was 182 cases with the amount claimed standing at HK$2.67 billion.

By comparison, as of 31 December 2012, the number of claims stood at 120 cases with the claim amount at HK$1.69 billion.

For the railway tunnels, the number of claims was 149 cases compared with 99 cases six months earlier.

The amount claimed jumped from HK$1.95 billion to HK$2.91 billion.

The MTRC, which is in charge of the project on behalf of the government, has remained decidedly careful in paying claims with the interim award for the West Kowloon Terminus totalling just HK$98.6 million, hardly changed from the HK$96 million recorded six months earlier.

Contractors working on the tunnels saw slightly better treatment with interim award rising from HK$215 million to HK$311 million.

So far, the MTRC and contractors have continued to hold differences of opinion in resolving claims.

The number of resolved claims remained unchanged at 97 cases with an associated award of HK$1.05 billion.

“According to the prevailing estimation, the amount claimed could be fully covered by the contingencies of the project and would not result in cost overrun,” the bureau said.

The West Kowloon Terminus construction site on 22 October 2013. The government is insisting the Express Rail Link project is still on time and to budget   (Danny Chung)

The West Kowloon Terminus construction site on 22 October 2013. The government is insisting the Express Rail Link project is still on time and to budget (Danny Chung)

Disputes over progress and additional costs have cast a dark cloud over the Express Rail Link that will, on completion in 2015, connect Guangzhou, Shenzhen and Hong Kong as well as linking into the high speed rail network in China.

Last May, the Apple Daily and Ming Pao Daily reported that West Kowloon Terminus North project could be late by at least 562 days.

According to the bureau’s paper, excavation works for the terminus structure is 60 percent complete with concrete structural works for the first two levels B1 and B2 completed already.

The government is still insisting the project will be on time.

As of 30 June 2013, the accumulated expenditure for the awarded contracts on the project was HK$28.6 billion against the total awarded contract sum of HK$44.8 billion.

“All in all, the award of contracts is on schedule and within budget,” was the bureau’s upbeat comment to the Legco subcommittee.

Danny Chung

 

 

 

 

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