Since the Hong Kong SAR government approved the HK$21.6 billion budget for the West Kowloon Cultural District, the construction cost have kept climbing and now the money is running out, back in May of last year Lawmakers have rebuked the government for playing games with the numbers and failing to manage the West Kowloon project, allowing it to be a bottomless black hole and ignoring the fact that the money spent on it belongs to Hong Kong people.
Some lawmakers raised concerns in April 2013 saying the original funding was almost used up and that the government may have to provide extra funding to complete the project. This concern came true. At a West Kowloon Cultural District board meeting last year, a confidential document about the new budget estimate for the whole project was tabled. The total estimated cost went up from HK$21.6 billion to HK$47 billion, or HK$25.4 billion over-budget.
The most sensitive content of the report was that the total construction cost of the West Kowloon project were far over inflation, from original estimate of HK$21.6 billion to HK$47 billion – a 117% increase. This was even higher than the “Disclaimer for Building Works Tender Price Index (BWTPI)” which stands at 95.3%, an excuse the government has used to excuse multiple cost over-runs. Besides the Chinese Opera House, the construction cost of M+ Museum also went up from HK$4.7 billion to HK$7.7 billion. The government expected that the legislature would then have been furious should it request the extra HK$25.4 billion funding. Hence, the government came up with an under-the-table solution to allow it to keep a lid on the scale of cost over-runs: the government would handle all the construction for the road and basement parking system, as well as for the cooling system, which were to reduce the total cost by HK$8 billion.
To avoid being denounced by the Legislative Council at the time, Carrie Lam Cheng Yuet-ngor, Chief Secretary for Administration, proposed at the board meeting to have government workers handle the majority of the construction works (instead of hiring contractors), and to delay the construction of the second phase of the Main Theater and the medium size theatre so that the total cost could be reduced to HK$28.9 billion, before asking for additional funding.
Now, nearly a year later Chief Secretary Carrie Lam Cheng Yuet-ngor admitted yesterday that the initial HK$21.billion funding for the massive project was sufficient only to complete its first two phases and has indicated the government will not commit more money to the West Kowloon Cultural District other than its initial HK$21.6 billion investment. So, after its first phase (to be completed by 2018), the project is expected to seek private funding.
Asked by Democratic Alliance for the Betterment and Progress of Hong Kong’s Starry Lee Wai-king if the government had considered abandoning the third phase, Lam said: “We need to look into the local cultural development. Lam also told legislators that the projects in the first two phases may have to be delayed following the two-year delay of the Express Rail Link.
But she did not know if the two phases would also be delayed for two years.She will raise the issue with the MTR Corp and ask when it can release the sites to the authority. Concerned lawmakers said without facilities in the third phase, the cultural hub will be second rate. But Lam said the government is committed to the project and the land will not be sold.The first phase – the most expensive M+ museum, Xiqu Center, park and minor exhibition centers – is expected to be completed in 2017.
The second phase is expected to be completed around 2020 and includes the Center for Contemporary Performance and Medium Theatre. Phase 2 projects will be worst hit by the delay in the Express Rail Link but will have no direct impact on the implementation date for Phase 1 projects except for Xiqu Centre. The railway also occupies the entrance of Xiqu. The Xiqu Centre is among the first facilities due to be completed in 2017.
“I am not quite satisfied with the proposed timetable on the MTRC’s return of the land site [for development of the project],” said Lam, adding that she or transport secretary Anthony Cheung Bing-leung will take up the matter with the MTRC.