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Following is a question by Hon Jeffrey Lam Kin-fung and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (May 29):
The Transport and Housing Bureau has indicated earlier that the Government has maintained close liaison with the MTR Corporation Limited (MTRCL), and the on-schedule completion of the Project to construct the Hong Kong Section of Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL Project) and keeping the construction cost within budget have all along been their prime objectives. According to MTRCL’s assessment, these objectives are attainable hitherto. However, it has recently been reported that an internal document of a contractor of the XRL Project has revealed that owing to the increase in costs and change of designs, etc., some of the works cannot be completed in 2015 as originally planned. It is estimated that the completion date of West Kowloon Terminus will be postponed for 562 days, and the contractor concerned has made a claim to MTRCL for $1.55 billion to compensate for the expenses arising from the delay in works. Concerning the construction progress of the XRL Project and the related immigration arrangements, will the Government inform this Council:
(a) given that MTRCL submits a report to the Government on the construction progress and financial status of the XRL Project every half year, of the date and contents of the latest report submitted by MTRCL;
(b) how the construction cost and completion date of the XRL Project, based on the latest information submitted to the Government by MTRCL, compare with those in the original plan; and
(c) given that the authorities have indicated that an inter-disciplinary task force has been set up to conduct an in-depth study on the relevant arrangements for the co-location of boundary control facilities at the West Kowloon Terminus, of the present progress and results of the study?
My reply to the three parts of Hon Jeffrey Lam Kin-fung’s questions is as follows:
(a) The Government has entrusted the design and construction of the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) to the MTR Corporation Limited (MTRCL). All along, the Government has been reporting the progress of the XRL project to the Subcommittee on Matters Relating to Railways of the Legislative Council (LegCo) at a six-month interval. The sixth half-yearly report on the works progress and financial status of the XRL project between July 1, 2012 and December 31, 2012, together with an information paper in response to recent media reports, have been submitted to the LegCo earlier and discussed at the Subcommittee’s meeting on May 24, 2013.
(b) The XRL project commenced construction in January 2010, with the target completion date in 2015. The Government has been closely monitoring the implementation of the project to ensure that it will be completed on schedule, within the approved project estimate (of $66.8 billion at money-of-the-day price) and to the required quality of works.
Since commencement of works, the XRL project has been implemented in an orderly manner. As at end-March 2013, over 70 per cent of the excavation works under the XRL project, including those for the tunnels and the West Kowloon Terminus (WKT), have been completed. According to the MTRCL’s latest assessment, it remains our target to complete the construction of the XRL project in 2015.
In the course of major infrastructural works, it is quite common for the contractors to encounter situations that are more difficult than they expected at the time of tendering. Oftentimes, the contractors may submit claims due to various reasons and negotiations with the works agent are required. While any monetary claim has to be substantiated, the final compensation agreed is usually different from the amount claimed. Being a railway station of about 26 metres underground, the WKT involves highly complex works that involve numerous interfacing contracts of varying natures, thus requiring thorough coordination among all parties concerned.
The contractors have an obligation to complete the works within the time specified in the contracts. When situations not reasonably expected at the time of tender arise, the contractors may submit claims to the MRTCL in accordance with the relevant contract terms. The MTRCL will carefully scrutinise every claim and the contractors are required to provide sufficient justifications and information to support their claims. Provision has been earmarked in the project funding to cope with unforeseeable situations during construction. According to the current estimation, the project contingencies are adequate to cover the expenses incurred by the claims, causing no overrun in the cost of the XRL project.
We will continue to work closely with all parties concerned to ensure that the construction of the XRL project will be completed within budget and on time.
(c) As co-location at the WKT of the XRL involves complex legal and constitutional issues, the Government has been negotiating with the Mainland authorities on customs, immigration and quarantine arrangements for commissioning of the XRL. We will report to the LegCo in a timely manner once specific agreement has been reached.