LCQ6: Hong Kong Section of Guangzhou-Shenzhen-Hong Kong Express Rail Link

     Following is a question by the Hon Ronny Tong and a reply by the Acting Secretary for Transport and Housing, Mr Yau Shing-mu, in the Legislative Council today (December 3):


     In as early as 2009 when the Finance Committee of this Council vetted and approved the funding proposal for the project to construct the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL), I pointed out that it would be difficult to implement the arrangements of co-location of boundary control facilities proposed by the authorities for XRL because under the Basic Law, mainland law enforcement agencies were not allowed to perform law enforcement work such as immigration control within the territory of the Hong Kong Special Administrative Region (SAR).  The relevant articles of the Basic Law include Article 18 which stipulates that national laws to be applied in SAR shall be listed in Annex III and only laws outside the limits of the autonomy of SAR may be listed in Annex III; and Article 22, which provides that all offices set up in SAR by departments of the Central Government, etc. and the personnel of these offices shall abide by the laws of SAR. On the other hand, while the Government said in May this year that there would be delay and cost overruns in the XRL Project, the overseas experts commissioned by the MTR Corporation Limited (MTRCL) have pointed out recently that there are two-thirds probability of having further cost overruns and one-third probability of having further delay in the commissioning date. As the cost effectiveness of XRL will be affected by the implementation of the co-location arrangements or otherwise as well as by delay and cost overruns in the XRL Project, will the Government inform this Council:

(1) of the concrete means to solve the legal problem pertaining to the implementation of the co-location arrangements in SAR; the current progress of such work and when the problem is expected to be solved; whether it has assessed, in the event that the co-location arrangements cannot be implemented upon the commissioning of XRL, if the speed of XRL trains will be reduced or even reduced to a level comparable to that of the through trains, thus rendering XRL being unable to achieve the anticipated cost effectiveness because of the need for XRL train passengers to alight at the border for immigration clearance and then re-board the train; if the assessment outcome is in the negative, of the justifications for that;

(2) given that the co-location arrangements may not be implemented upon the commissioning of XRL, resulting in XRL trains having to operate at a normal speed within the SAR territory, whether the Government has plans in place to implement options that can reduce the construction cost of XRL should such a situation occur; if it does, of the options; if not, the reasons for that; and

(3) given that the aforesaid experts have recommended that MTRCL should re-evaluate the cost once every six months as well as set a probability based key performance indicator, and that MTRCL should be required to report to the Capital Works Committee immediately if the probability of the Project achieving the timely completion and projected cost has decreased by 5% or more, whether the authorities will require MTRCL to implement such recommendations; if they will not, of the reasons for that; which party will bear further cost overruns of XRL; if MTRCL will, how the authorities ensure that MTRCL will not pass the cost onto the public by increasing its fares or through other means?



     Our consolidated reply to the three parts of the Hon Ronny Tong's question is as follows:

     The total length of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) is around 140 kilometres (km) in which the Hong Kong Section of the XRL is 26 km. The Hong Kong Special Administrative Region Government has entrusted the Mass Transit Railway Corporation Limited (MTRCL) for the construction and commissioning of the Hong Kong Section of the XRL. The construction works of XRL commenced in January 2010. According to the MTRCL's latest revised project programme, the XRL is scheduled for completion and commissioning by the end of 2017. Upon completion, the Hong Kong Section of the XRL will provide express rail service between Hong Kong and Guangzhou, and connect to the wider regional and national railway lines in the Mainland. Enhancing Hong Kong's connectivity with various parts of the Mainland, the XRL has significant strategic importance and transport functions.

     For short-haul services, the XRL trains will serve the West Kowloon Terminus in Hong Kong, Futian and Shenzhen North Stations (the latter formerly named Longhua Station) in Shenzhen, Humen Station in Dongguan, and Guangzhou South Station (formerly named Shibi Station) in Guangzhou. As regards long-haul services, Shenzhen North Station will connect to the Hangzhou-Fuzhou-Shenzhen Passenger Line, whereas Guangzhou South Station will connect to the Beijing-Guangzhou Passenger Line. Under the original plan, trains departing from the West Kowloon Terminus will run directly to 16 major Mainland cities without any intermediate stations for interchange. For travellers departing from Hong Kong, the journey time for Guangzhou will be reduced from about two hours at present to around 48 minutes. As for Shanghai and Beijing, the journey times will be shortened from around 19 and 24 hours at present to seven to eight hours and nine to 10 hours respectively.

     Implementation of the arrangements for co-location of boundary control facilities ("co-location" arrangements) at the West Kowloon Terminus of the XRL is very important to the realisation of the intended purpose of the XRL as it could truly unleash the potential of a time-saving express railway. Under the "co-location" arrangements, passengers boarding XRL trains in Hong Kong will only have to pass through the immigration control points of Hong Kong and the Mainland in the West Kowloon Terminus once before boarding and taking the XRL to all cities along the national XRL network. Similarly, XRL passengers embarking in any Mainland city will also be able to travel non-stop to Hong Kong, and pass through the two immigration control points only upon arrival. In other words, passengers can complete immigration clearance for both Hong Kong and the Mainland in one go without the need of disembarking for immigration checks en route. Only will this realise the convenience and speediness of the XRL to the full. Additionally, under the "co-location" arrangements, train deployment can be more flexible to maximise the benefits of XRL services.

     The concept of implementation of the "co-location" arrangements at the West Kowloon Terminus is to let Mainland inspecting officers enforce the Mainland's immigration and clearance procedures and the related Mainland laws at the station. The prime concern of implementing the "co-location" arrangements at a designated area within the territory of Hong Kong is enabling Mainland officers to smoothly carry out their inspection duties under the Mainland law (including those relating to customs, immigration and quarantine matters) within the constitutional framework. The Department of Justice, the Transport and Housing Bureau, the relevant policy bureaux and departments are actively studying the above issues and discussing them with their Mainland counterparts. As the work is rather complex, it takes a longer time to deliberate and examine the related issues. The relevant work is still underway. Our goal is to strive for the implementation of the "co-location" arrangements at the West Kowloon Terminus when the Hong Kong section of the XRL is completed and commissioned by the end of 2017.

     In respect of project cost, the Administration received a letter from the MTRCL on July 24 2014, informing that the latest estimate of the Cost to Complete (CTC) for the XRL is $71.52 billion, including the additional insurance fees and the Project Management Cost. The MTRCL subsequently made public the above estimate on August 11. This estimate is calculated on the basis of MTRCL's revised Programme to Complete (PTC) (ie the XRL will be commissioned by the end of 2017). It exceeds the original CTC ($65 billion) by $6.5 billion and also exceeds the approved project estimate ($66.8 billion). Based on the information provided by the MTRCL, the Highways Department (HyD), with the assistance of its monitoring and verification (M&V) consultant, has substantially completed the assessment of the MTRCL's latest CTC estimate. The HyD and its M&V consultant discovered that the MTRCL had yet to take account of several matters in its latest CTC estimate, or some items had to be re-assessed to ensure that there would be sufficient risk provisions. The HyD has urged the MTRCL to immediately review its latest CTC estimate in accordance with the department's assessment and the second report released by the independent board committee of the MTRCL in October 2014. The MTRCL has also been asked to demonstrate how to address the aforesaid matters which were not included in its latest CTC estimate.

     Our most important task now is to dedicate all our efforts to implement the entire XRL Project and to complete it as soon as possible. This requires the MTRCL's full co-operation. The HyD and its M&V consultant will continue to employ appropriate monitoring mechanisms to systematically monitor the MTRCL's implementation progress of the XRL. If it is found that there are delays in the works under the contracts, or there are inadequacies in the works, the HyD will urge the MTRCL to take follow-up actions and adopt effective improvement measures. As to the project cost overruns and the responsibility for bearing the overruns, the Administration will deal with them in accordance with the Entrustment Agreement. To avoid any project delays, we will assess the MTRCL's responsibilities for the progress, delays and overruns of the project in a timely manner. We reserve all rights to pursue responsibility from the MTRCL for the warranties it has made and all its contractual obligations.

Ends/Wednesday, December 3, 2014
Issued at HKT 16:08