Photographer: Antony Dickson/AFP via Getty Images

Hong Kong Puts Deadline on MTR Plan for China Express Rail Link

Updated on
  • City lawmakers stymie government plan to provide funding
  • High-speed rail link to mainland exceeded budget, faced delays

Hong Kong’s government is giving the operator of a planned express-rail link connecting the city to mainland China two weeks to outline plans to suspend the line’s construction.

Transport Secretary Anthony Cheung told reporters Monday that the government will stop work on MTR Corp.’s high-speed rail link connecting Hong Kong to the southern Chinese cities of Shenzhen and Guangzhou if lawmakers don’t approve funding next month, after they failed to do so over the weekend. Some 7,000 people will lose their jobs if work is suspended, while any delay to the project will cost about HK$233 million ($30 million) every month, plus unknown costs if it’s eventually restarted, Cheung said.

An additional HK$19.6 billion is needed to finish the line, which was more than three-quarters complete at the end of last year, after costs swelled from earlier estimates of HK$65 billion. Hong Kong’s government said in December the city could face a HK$75.6 billion bill if the delay-plagued project was abandoned completely.

The Hong Kong Legislative Council’s failure to vote on the funding bill over the weekend reflects the standoff between pro-democracy and pro-China factions in the city, which has deepened since the Occupy protests in late 2014. Recent events, including the disappearance of a bookstore owner who sold publications critical of China’s Communist Party, have added to the tension and inflamed fears of an erosion of the "One Country, Two System" concept agreed before the U.K. handed over Hong Kong to China in 1997.

Fostering Trade

By cutting travel time between Hong Kong and the mainland, the express link would foster trade and services and bolster the city’s long-term competitiveness as a gateway to China, MTR Corp. said in November. Hong Kong lawmakers in January 2010 approved funding for the high-speed rail line, whose completion has been delayed at least twice.

Opposition to the link has been brewing since 2009 and has gained in intensity with the emergence of the "localist" movement, which opposes what it sees as encroachment on the local way of life by the governing and business elites. The movement has taken on a more discernible anti-China slant since the failure of the Occupy protests to secure any significant democratic reform.

"I and the government are worried that the lawmakers won’t approve the funds," Cheung said Monday.

Earlier this month. MTR Corp. agreed to a plan for the city government to take over financing of the rail link. The company, majority-owned by the Hong Kong government, has been criticized for budget overruns and missed completion targets on the project, and saw its chief executive officer leave a year ahead of schedule. An MTR spokeswoman didn’t immediately respond to an e-mail seeking comment.

Forecasts for the project’s economic return have been cut to 4 percent, from the 6 percent estimated in 2009, the city’s Transport and Housing Bureau told lawmakers in a document in December. The government cited higher construction costs and slower economic and population growth in the Pearl River Delta region as reasons for the decline.

— With assistance by Clement Tan

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