MTR Corp., the builder of a HK$66.9 billion ($8.6 billion) high-speed train line in Hong Kong, said work on the railway may be completed ahead of schedule because of government support and commitments from contractors.
Piling and tunneling work has already begun, Chew Tai-Chong, MTR’s projects director, said today at a conference in the city. The work is also likely to come in on budget, he said. He didn’t elaborate on a possible finishing date for the line, which is due to be completed by August 2015.
Contractors will dig up 10 million cubic-meters of rock, soil and other materials while constructing the 26 kilometer (16 mile) underground railway, which will run from downtown Hong Kong to the border with China, Chew said. Hong Kong lawmakers in January approved funding for the project to help cut travel times to Chinese cities after two earlier votes were delayed because of objections about costs and the demolition of houses.
High-speed railways “can bring in economic benefits,” said Stephen Ip, a Shanghai-based partner for transactions and restructuring at consultancy KPMG. “It’s the ability to have better public transportation in terms of reliability, frequency, comfort and safety.”
Government-controlled MTR has awarded 14 major contracts for work on the railway with a total value of HK$18 billion, Chew said. Contractors will be able to find the 9,000 workers needed for the project locally, rather than having to import labor from China, he said.
MTR, which also operates Hong Kong’s subways, fell 0.9 percent to HK$27.30 at the close of trading in the city. The company has risen 1.9 percent this year, compared with a 6.6 percent decline for the benchmark Hang Seng Index.
Trains will run at speeds of as high as 350 kilometers per hour (217 miles an hour) on the new line, which will form part of a 140-kilometer railway running to Shenzhen and Guangzhou.
The line will also link into a planned 16,000-kilometer Chinese high-speed rail network and will cut Hong Kong-to- Beijing train journey times by more than half to 10 hours, according to MTR’s website.
Hong Kong’s government plans to construct an underground terminal for the railway in West Kowloon, which is across Victoria Harbor from Hong Kong Island. The district is also being developed as a finance center.
The line will save the Hong Kong public 40 million hours per year, generating an annual economic rate of return of 9 percent, according to a government paper.