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Auditor probes West Rail payments

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HONG KONG's KowloonCanton Railway Corporation has asked its external auditor, KPMG, to investigate HK-1.536bn (US-191M) in additional payments paid to contractors working on 18 West Rail construction and systems contracts.

The probe, expected to be completed by early April, follows confirmation that KCRC paid German contractor Siemens an extra US-12.5M on a US-37M telecommunications contract to cover additional work.

In a statement, KCRC said: 'The corporation has always carefully assessed claims and where the contractor's entitlement to additional costs is established under the contract, the corporation would pay.

'Where the contractor's entitlement to extra time is established, the corporation will ask the contractor to deploy additional resources to catch up on time lost and pay the contractor accordingly.

But KCRC cut the cost of the 30.5km West Rail project, that will link Tuen Mun in the New Territories and urban Kowloon, from about US-8bn in 1997 to the current US-5.7bn estimate after deciding to shorten train lengths and increase train frequencies.

The railway is also expected to open four months early in August 2003. KCRC launched the investigation after criticism from local lawmakers.

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