Hong Kong slashes costs for Northern Metropolis rail link by 28% to HK$86.2 billion

Hong Kong has cut the cost of its new Northern Metropolis rail link by 28 per cent to HK$86.2 billion (US$10.99 billion), after the government approved the funding for the project’s second phase, ahead of a planned launch by 2034.

The Transport and Logistics Bureau and the MTR Corporation signed a project agreement on Tuesday covering the Northern Link, marking the start of construction for both its main and spur lines.

The signing followed the green light from the Executive Council, the government’s key decision-making body, for the financial arrangements for part two of the project.

Secretary for Transport and Logistics Mable Chan said the government and the railway operator had adopted a series of initiatives with “major decisive breakthroughs” to reduce costs, expedite construction and boost the speed and efficiency of railway development.

These initiatives included introducing new Hong Kong Railway Standards to allow wider use of innovative technologies, materials and equipment, as well as establishing a dedicated Railway Checking Unit that reduced building-plan approval times by up to 50 per cent.

Chan said combining the main line and spur line into a single project generated synergies that lowered costs and brought forward the spur line’s completion by two years. As a result, both sections can now open together by 2034 or earlier.

“Through the above breakthroughs, coupled with the cost-saving benefits brought about by the shortened construction period, the overall construction cost of the whole Northern Link project has been reduced by 28 per cent as compared with the original estimate,” she said.

The government said an independent consultant reviewed MTR Corp’s financial estimates for the second phase and verified a construction cost of about HK$54.8 billion. Combined with the estimated capital cost of HK$31.40 billion for the first phase, the entire project is expected to cost HK$86.2 billion.

Chan described the new link as a strategic railway project under the city’s inaugural first-year plan which aligns with strategies set out in the national blueprint.

“Offering both local commuting functions within Hong Kong and cross-boundary railway services, the project will open up new transport corridors for both local and cross-border travel upon full commissioning,” she said.

Under the approved financing arrangement, MTR Corp will receive development rights for eight sites in Ngau Tam Mei, San Tin, Kwu Tung North and the proposed Au Tau New Development Area under the rail-plus-property model.

The 10.7km main line will feature five stations, including interchanges with the Tuen Ma and East Rail lines at Kam Sheung Road and Kwu Tung respectively.

Peak-period travel times between the two interchange stations will plunge from about an hour to 12 minutes.

The 6km spur line will connect San Tin with the newly launched Huanggang Port via Chau Tau and the Loop, with a journey time of around 11 minutes.

Tuesday’s approval completes the two-part financing arrangement announced in July last year, when the government adopted a phased approach to allow the Northern Link project to proceed immediately while detailed planning, design and statutory procedures for the spur line continued in parallel.