Transport and Housing Bureau's response to media enquiries on cost overrun of HZMB Main Bridge
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In March 2010, the Ministry of Transport approved the project estimate of the HZMB Main Bridge project with a project cost of about RMB 38.118 billion. Since the commencement of the project, there has been escalation in the construction costs arising from the complicated construction conditions in the open sea, the difficulty in construction method, increase in labour and material costs as well as the refinement of the design and construction schemes. As a result, the contractors of the HZMB Main Bridge submitted applications to the HZMB Authority for adjustment to the project estimate. The HZMB Authority also pointed out that it has been a recent phenomenon that the approved project estimates of mega-scale transport infrastructure projects in the Mainland were exceeded.
The HZMB Authority has reviewed the applications submitted by the contractors and prepared a report on the adjustment of the project estimate. Subsequent to the endorsement of the relevant Mainland Authorities, the relevant Mainland Authorities have submitted the report on the adjustment of the project estimate to the State Council. According to the approval of the Ministry of Transport, the latest approved project estimate of the HZMB Main Bridge is about RMB 48.068 billion, i.e. the cost overrun of the Main Bridge is about RMB 9.95 billion.
As stated in our press release issued on November 21 this year, at the time when the HZMB Main Bridge was approved, the three sides agreed that the construction cost would be financed by the three sides and by borrowing from the banks by the HZMB Authority. It is expected that the apportionment of the additional capital cost arising from the cost overrun of the Main Bridge will follow the above principle as stipulated at the time when the project was approved, i.e. it will be partly financed by the three sides and the remaining sum will be financed by borrowing from the banks by the HZMB Authority. In accordance with the above-mentioned latest project estimate as approved by the Ministry of Transport, it is expected that the three sides would have to contribute to a capital cost of about RMB 4.6 billion. As for the contribution from Hong Kong, it is expected to be about RMB 2 billion, which will be reported to Legislative Council (LegCo) when the final amount and the relevant arrangement are confirmed. We will also seek LegCo's approval for the required additional funding.
Ends/Wednesday, December 13, 2017
Issued at HKT 22:27
Issued at HKT 22:27
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