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Hong Kong looks to woo British firms to keep mega projects on track

Hong Kong metro operator MTR said this week it was trying to persuade British and other foreign contractors to bid for work on a huge multi-billion pound infrastructure programme because of fears that a lack of local capacity will drive up costs.

MTR projects director Russell Black said on Tuesday that Laing O’Rourke and Kier had already shown interest in bidding for work along with Japanese and Spanish contractors.

But Black warned that without more competition from abroad, bid costs would rise as contractors reached capacity.

This could force the Hong Kong government to delay spending on work, which is due to start at the end of its current five-year programme.

“They [the government] can see that the pricing levels on some of the contracts coming in means that some of these will be deferred,” he told the Urban Infrastructure 10 conference in Hong Kong on Tuesday.

Multiple projects

MTR has just embarked on the five-year multi-billion pound programme of major projects. Work is underway on the £870M West Island line, and construction of a massive £4.3bn, 26km long underground high speed rail link to mainland China’s high speed rail network is expected to start within the next few days.

Other projects due to start on site within the next 18 months include the £290M, mainly tunnelled, 16km long line between Shatin in the New Territories and Central on Hong Kong Island.

There is also a £870M, 7km long, South Island Line across Hong Kong Island, and a £355M, 3km long, tunnelled Kwun Tong Line extension in Kowloon.

Potential stumbling blocks

The Shatin to Central project appears the most vulnerable because of its size and because it is directly funded by the government.

The other projects have already started or are being funded by MTR through the sale of air rights above stations.

But there are fears that the local construction industry lacks the capacity to deliver these and other infrastructure projects, which have been accelerated as part of the government’s economic stimulus package.

Public spending on capital projects in Hong Kong is expected to double from £1.5bn this year to £3bn a year for the next two years.

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