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In response to media enquiries on the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) today (August 11), a spokesman for the Transport and Housing Bureau responded as follows:
The Government received a letter from the MTR Corporation Limited (MTRCL) on July 24, informing the Government that the Corporation's latest estimate of the Cost to Complete for the XRL Hong Kong Section is $71.52 billion (including the Project Management Cost). The Government has to ascertain the basis of the estimate and has requested MTRCL to provide detailed information and justifications. Upon receipt of all relevant information, the Government will critically examine and explore how to follow up in accordance with the Entrustment Agreement (EA).
In January 2010, the Finance Committee of the Legislative Council approved funding totalling $66.8 billion for the construction of the XRL Hong Kong Section, of which $65 billion was for entrusting MTRCL to provide for the design, construction, project management, testing and commissioning and more.
As stated in the paper (CB(1)1328/13-14(03)) submitted by the Government to the Legislative Council Panel on Transport's Subcommittee on Matters Relating to Railways in May this year, the EA has stipulated that MTRCL shall use its best endeavours to complete, or procure the completion, of the Entrustment Activities in accordance with the Entrustment Programme, and to minimise any delay or other effect which any modifications may have on the Entrustment Programme. At any time that MTRCL is in material or persistent breach (or the Government, acting reasonably, suspects that the Corporation is in material or persistent breach) of any of the Corporation's material obligations under the EA, the Government shall be entitled to verify MTRCL's compliance with the Corporation's obligations under the EA.
Should there be a delay and to the extent that the delay in question is not covered by any modification or adjustment to the Entrustment Programme, it may amount to a breach of MTRCL's obligations under the EA and the Government may have a claim for general damages against MTRCL for such a breach.
Ends/Monday, August 11, 2014
Issued at HKT 19:47
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