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The MTR Corporation Limited (MTRCL) Independent Board Committee (IBC), established to review the background of and revised schedule for completion of the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link project (XRL) released its first report (the Report) today (July 16). During the review, the IBC examined issues including the reasons for delay, the Corporation's project management and the reporting of construction progress, etc; and pointed out that there were problems in the monitoring of works progress and communication mechanisms of the Corporation.
The Report has recommended enhancements to the Corporation's system and processes, including the MTRCL Board should establish a Capital Works Committee to oversee in the future any project involving design and/or construction with a capital value of a certain material size and the Committee should report to the Board on a quarterly basis on the progress of the relevant projects and their respective budgets; the MTRCL Board should review with the Executive Committee the format and content of future project reporting to the MTRCL Board and the Audit Committee to ensure that both are presented with clear and comprehensive information regarding the projects underway.
A Government spokesman responded that the Government welcomed these recommendations and hoped the MTRCL would actively take follow-up actions. The Government also hoped that the MTRCL could provide the Government with the most updated information and fuller assessment of the construction progress of XRL and the other four domestic railway projects under construction in a timely manner in future.
The spokesman said, "The Government agrees that the MTRCL Board should strengthen the system and mechanism of monitoring major works projects and railway service, including the setting up of dedicated committee. As regards the overall corporate governance of MTRCL, the Government has repeatedly stressed that it will proactively carry out its duties as the MTRCL's majority shareholder and urge it to seriously review its corporate structure and operation as well as to make necessary reform. The Government has already nominated additional Board Directors to strengthen the governance of MTRCL. At the same time, the Government has reminded the MTRCL to carefully strike a balance on the pace of business development to ensure that priority is given to local business."
Regarding the management and monitoring of the XRL project, the Government has established the Independent Expert Panel (IEP), headed by Mr Justice Hartmann, to review the implementation and monitoring mechanism of the XRL project (whether it is the MTRCL or relevant Government departments) and to identify if there are any problems (including human factors) on the relevant systems, procedures and operations. The IEP is expected to complete the review by end November this year and will submit a report to the Chief Executive. The report will be made public.
On the other hand, the Government noted the early departure of MTRCL Chief Executive Officer, Mr Jay Walder, and the Deputy Chief Executive Officer, Mr Lincoln Leong, has been appointed to be the Acting Chief Executive Officer with effect from August 16 this year. The Government expected that a capable candidate can be identified as the new Chief Executive Officer through the global search being conducted by the MTRCL. The Government hoped that during the transitional period, Mr Lincoln Leong would lead the MTRCL to actively take forward the XRL project and the four domestic railway projects under construction, ensuring that these projects and the costs would be properly managed; and to make sure that the MTRCL would maintain reliable and efficient rail services.
Ends/Wednesday, July 16, 2014
Issued at HKT 21:00
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