Stormy outcome ahead for the MTR as line costs rise over HK$3b

Stormy outcome ahead for the MTR as line costs rise over HK$3b

Construction of the South Island Line and the Kwun Tong extension line will cost HK$3 billion more than the original budget, MTR Corporation Limited announced yesterday.

Together with previous announcements, it said the costs of the four new lines, including the Guangzhou- Shenzhen-Hong Kong Express Rail Link and Sha Tin to Central Link, will be HK$18.05 billion over budget.

The HK$3 billion for the first two projects will be borne by the MTRCL, chief executive Lincoln Leong Kwok- kuen said.

But whether or not the company or the government would bear the extra costs of the high-speed rail link now estimated to cost HK$85.3 billion is still not clear.

Leong said that the company had not received notification of any claim by the government in relation to the overbudget and the delay of the rail link.

The cost of the South Island Line (East) linking Admiralty to South Horizons would be HK$16.9 billion, 22 percent or HK$1.7 billion more than the original estimate of HK$15.2 billion.

The construction of the Kwun Tong extension line linking Yau Ma Tei to Whampoa would need another HK$1.3 billion, pushing costs up 22 percent to HK$7.2 billion from the original HK$5.9 billion.

Problems with the excavation of a platform tunnel and the construction of the Whampoa station also pushed the launch of the Kwun Tong extension line back to the third quarter of next year at the earliest.

The South Island Line is expected to be completed by end of next year as scheduled.

Leong said unanticipated challenges such as complex geological situations, underground pipes and lines and labor shortages have caused the projects’ delay and rising price tags.

He went on to say that the company can better estimate the current costs of the two projects as more than 80 percent of the projects are already completed.

The Sha Tin to Central Link, funded and owned by the government, saw a 17.3 percent rise in costs to HK$8.62 billion from the original estimate of HK$7.35 billion.

The high-speed rail link would also see a delay to the third quarter of 2018.

The company stated that it would continue to monitor and review the project cost and completion date as the archaeological discovery at the new To Kwa Wan station and late site access caused by third party infrastructure works at the future Exhibition station continue to delay the link project.

It expects the cost estimate of the project to be further revised upwards.

 

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