Hong Kong economy

Hong Kong-Zhuhai-Macau mega bridge project set to exceed budget by more than HK$11 billion

Government will ask Legco to agree to cover 50.2 per cent of overrun costs

Su Xinqi Phila Siu UPDATED :
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Hongkongers are set to foot a ­bigger bill than expected for the Hong Kong-Zhuhai-Macau bridge after latest ­estimates showed the cost had overrun by one-third, or HK$11.8 billion.

Although the main section of the project – a 22.9km bridge and a 6.7km undersea tunnel – is ­situated in mainland waters, the Hong Kong government has had to ask the legislature for additional ­funding to pay for part of the cost ­because of an agreement it had with its ­mainland and Macau counterparts.

Lawmakers urged the government to give a detailed explanation and be prepared for “lots of questions” when its request for more public money arrives at the Legislative Council. The Transport and Housing Bureau told lawmakers in February and ­October that the bridge would cost more than expected due to an “increase in labour and material costs as well as the refinement of the design and construction schemes”. However, an exact amount was not disclosed until Tuesday afternoon.

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“According to our understanding, the cost overrun of the main bridge may be around 10 billion yuan (HK$11.8 billion),” the bureau said in the latest progress report for the bridge.

The bureau said the Hong Kong-Zhuhai-Macau Bridge Authority had reviewed the applications submitted by the contractors and its report on the adjustment of the project estimate had been submitted to the State Council in Beijing.

The bureau said Hong Kong would have to pay its share because “the three sides agreed that the construction cost would be financed by the three sides”. It said it would report the detailed arrangement to Legco and seek approval for additional funding after the cost overrun and the amount to be financed by Hong Kong were confirmed.

According to a document prepared by the Legco secretariat in December 2008, Hong Kong would share 50.2 per cent of the 31 billion yuan cost for the main bridge, while the mainland would share 35.1 per cent and Macau 14.7 per cent.

Following this scheme, Hong Kong would need to pay more than HK$5 billion for the overrun cost.

Frankie Yick Chi-ming, chairman of Legco’s Panel on Transport, said there would be “lots of questions” from legislators when the government’s application was tabled.

“The key question I have is if 10 billion is the final number,” said Yick, adding that the reasons for the cost overrun would be carefully examined.

Wu Chi-wai, a democrat member of the legislature’s Finance Committee, said asking as many questions as possible would not stop the government from getting the money from a legislature controlled by the pro-establishment camp, “but we have to do so for more information and to find out what has gone wrong”.

Wu said the biggest problem was that the Hong Kong government had no mechanism to supervise the cost of construction when it signed the agreement with the mainland and Macau.

“The government will have to explain why the bridge costs so much more, why it disclosed the number so late, and why in the first place it signed such a bad agreement,” Wu said.

In Beijing, Hong Kong Financial Secretary Paul Chan Mo-po said he did not know for now how much of the budget overrun the city would have to bear but said it would be calculated according to the “established mechanism” as agreed by all sides when the agreement was signed.

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Asked if he predicted that the project would be delayed if the request for extra funding was met with objections in the legislature, he said it was too early to tell. He called on all sides to allow the project to press ahead so that people from Hong Kong, Macau and the mainland would benefit.

He did not discuss the matter with mainland officials on Tuesday.

The bridge, which connects Lantau Island, Zhuhai and Macau, is expected to be ready for service by the end of the year while some facilities of the Hong Kong section, including tunnels and connecting routes, might need another one to three years to be completed, according to the Highways Department.

According to the records published on the official website for the bridge, the Finance Committee of Hong Kong’s Legco has approved more than HK$110 billion for the major and supporting projects of the bridge.

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