Chief Executive Leung Chun-ying has said that the new agreement between the government and the MTR Corporation (MTRC) on the high speed rail project will protect the rights of taxpayers and that it should be supported. However, lawmakers and experts have cast doubts on the additional government spending.
Ahead of the regular meeting of the Executive Council on Tuesday, Leung said that the previous agreement between the two parties was signed in 2010, and did not specify a cap for the construction costs. The new agreement states that the government will only pay up to HK$84.42 billion and the MTRC will have to pay any further costs. The project is now expected to be completed in the third quarter of 2018.
“For the government and the taxpayers, the new agreement signed yesterday [stated] a cap, and if it had not been signed, we would not know the final construction costs. This means the agreement can further protect the rights of the taxpayers, and confirm the final completion date, and so people should support the agreement.” Leung said.
The government will seek approval of the additional HK$19.60 billion funding from LegCo. The MTRC will pay a special dividend of HK$4.4 per share to shareholders, totalling HK$25.76 billion. As the government is a major shareholder, it is set to receive HK$19.51 billion, which will help to cover the increased cost.
New People’s Party deputy chairman Michael Tien Puk-sun, who was former chairman of the Kowloon-Canton Railway Corporation before its merger with the MTR in 2007, on Monday said that the government was ultimately still paying for the project.
“The special dividend given to the government by the MTRC should not be bound to a specific project, the government could have used it to build bridges and schools. If the special dividend is used to cover the cost, in order to save the high speed rail project, it is fundamentally a financial trick,” Tien said.
Albert Lai Kwong-tak, convenor of the Professional Commons, told TVB on Monday that the new agreement was not fair on taxpayers as they would be paying for the MTRC’s mistakes, such as the extra costs caused by inadequate preliminary geological surveys.
“The new amount could have been inflated [from the necessary cost] by the MTRC, so that capping the amount only means the MTRC has transferred the risk that it should bear onto the Hong Kong people. It is very unfair,” Lai said.
“It is a compromise with the MTRC, meaning it now has a cap [and will not ask for more], to make it easier for the government to apply for the funding, but in fact this doesn’t protect the public interest,” he added.
Around HK$50 billion out of the HK$65 billion cost approved in 2010 has already been spent. Secretary for Transport and Housing Anthony Cheung Bing-leung has said that the funds would be completely depleted by mid-2016 and, if the new funding plan was not approved, the project would have to be suspended.