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Hong Kong's economic downturn is good and bad news for KCRC. Income from property developments will be down, but contractors' prices are keen.

The cost of West Rail is put at HK$64bn (£5.1bn), broken down into an estimated construction cost of $51bn, land at $8bn and financing at $5bn. KCRC does not have to find all the money itself: the government is injecting HK$29bn into the project as equity, explains finance director Samuel Lai.

Half of this has already been received, with the remainder expected in April.

The corporation itself is coming up with about £800M (partly from interest on the government money) and the remaining £2bn will be borrowed for about 10 years.

'We were hoping to get the balance from development of property along East Rail and Light Rail,' says Lai, but this is now less certain.

'We are going into a contingency plan, to ensure that even if we cannot generate anything we would be all right.'

The other side of the coin is that tender and land prices are also down, he says. Two construction contracts have been awarded, which at HK$1.79bn (£143M) and HK$1.9bn (£152M), are considerably less than the estimates.

General manager construction Jaya Jesudason adds: 'We are keen to make sure that contractors who bid for the work are not putting in unrealistic prices.'

Projected passenger trips are 340,000 a day in the first year. By 2011 the population in the area will have doubled to 1.35M, accounting for 0.5M trips a day.

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