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Following is a question by the Hon Frederick Fung and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung at the Legislative Council today (May 29):
Question:
At the special meetings of the Finance Committee of this Council held in the past few years to examine the Government's Estimates of Expenditure, I had raised questions time and again on the works progress of the Project to construct the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL Project), and whether there had been any delays or difficulties unforeseen at the design stage, etc. The Government replied that it had all along been closely monitoring the works carried out by the MTR Corporation Limited (MTRCL) to ensure that the works of the Project were of good quality, would be completed as scheduled and would not exceed the approved project estimate. The Government also advised that "there have been no signs of cost overrun or major delay" for the XRL Project. However, it has recently been reported in the press that there have been severe delays in some of the works of the XRL Project, resulting in the delay of the completion date by one and a half year, and a contractor putting forward claims exceeding $1.55 billion for the additional expenses caused by the delays. In this connection, will the Government inform this Council whether:
(a) it has assessed if the situation as reported above is consistent with the authorities' replies to me; if the assessment result is in the affirmative, of the justifications; if the assessment result is in the negative, of the reasons for that, and whether the situation involves MTRCL knowingly not reporting the truth, and ineffective monitoring on the part of the Project Supervision Committee, which is chaired by the Director of Highways and is tasked with monitoring the XRL project; and
(b) it will require MTRCL to truthfully and comprehensively report on the latest progress of the XRL Project (including whether there have been delays and/or cost overrun and the relevant causes); of the expected completion date and estimated total expenditure of the XRL Project according to the latest progress; if there is expected delay in the completion date, whether the authorities have assessed the impact of such a situation on the economy of Hong Kong and on the transport in the districts concerned?
Reply:
President,
My consolidated reply to the two parts of Hon Frederick Fung's questions is as follows:
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). The XRL project commenced construction in January 2010, and all its major contracts for civil works and electrical and mechanical (E&M) works have been awarded. The target completion date is in 2015. As at end-March 2013, over 70 percent of the excavation works under the XRL project, including those for the tunnels and the terminus, have been completed. The excavation works at the southern end of the terminus have reached level B4, and the main structures for the first two underground levels have been completed. According to the MTRCL's latest assessment, it remains our target to complete the construction of the XRL project in 2015.
Given the scale of the XRL project, an inter-departmental Project Supervision Committee (PSC), chaired by the Director of Highways, has been established. The PSC holds regular meetings with the MTRCL and the relevant Government departments to monitor the implementation and financial status at various levels (including reviewing project progress, and overseeing procurement activities, cost control and contractual claims), and provides the MTRCL with guidance on matters that affect the progress of the XRL project.
In addition, the Highways Department has employed an engineering consultant to assist in project monitoring and verification, and the auditing works cover different aspects such as construction safety, technical, system programming, management procedures, works progress, financial status, etc. The handling of contractual claims by the MTRCL will also be examined.
All major contracts for civil engineering and E&M works under the XRL project have been awarded, with a total value of $44.812 billion. As at end-March 2013, the cumulative expenditures were $24.418 billion.
In the course of infrastructural works, it is quite common for the contractors to encounter situations that are more difficult than expected. If extra time is required or alternative construction methods and machinery have to be employed as a result, the MTRCL will handle the matter in accordance with the contract terms. The overall impact of various options on the project will be carefully assessed, and if considered reasonable, additional payment will be made to the contractors under the relevant contract terms. Provision has been earmarked in the project funding for unforeseeable situations during construction. The contingencies reserved for the XRL project is about $5.4 billion at 2009 prices.
The Government has been closely monitoring the implementation of the railway project to ensure that it is completed on schedule, within the approved project estimate and to the required quality of works. We will continue to work closely with all parties concerned to make sure that the construction of the XRL project will be completed within budget and on time.
Ends/Wednesday, May 29, 2013
Issued at HKT 12:00
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