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The proposals put forward by the KCRC involved details which are technical and complex. The Government has a duty, before allowing the project to proceed, to vet these details. There are also implementation and interface issues, affecting other Government and private sector projects, which the KCRC might not be aware of when it drew up the proposals. These issues have to be identified, examined and resolved. This work can be undertaken by civil servants, or consultants. Since railway projects are one-off projects, it is not cost-effective for Government to separately recruit additional civil servants to form the study team; hence the employment of consultants as approved by the Finance Committee in 1995.
Cost of the project
KCRC have estimated that the project cost of the WCR, which is partly in tunnel, partly on embankment and partly on elevated viaducts, would be about $75 billion in Money of the Day terms.
There has been concern that KCRC's cost estimates are substantially higher than the estimates given in Government's Railway Development Strategy (RDS) document published in December 1994. I would like to put the different figures in proper perspective.
The cost estimate in the RDS for the WCR running from West Kowloon to Tuen Mun north is $32 billion at 1994 prices. That estimate, in Money of the Day terms, is $54 billion.
KCRC's cost estimate at $75 billion has allowed for changing the scope of the project, such as extending the railway to Tuen Mun Town Centre, as well as project reserves and financing costs, which are not included in the 1994 RDS estimates.
I should nevertheless stress again that $75 billion is still only an estimate by the KCRC. It will need to be refined in the light of more detailed studies, a more accurate assessment of land resumption requirements and further in-depth discussions with Government.
Cost-effectiveness
Why is the Government so cautious in handling this project?
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