Executive Council approves financial arrangement for Tung Chung Line Extension
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The Chief Executive in Council today (February 28) approved the financial arrangement for the Tung Chung Line Extension (TUE). Subsequently, the Transport and Logistics Bureau has signed with the MTR Corporation Limited (MTRCL) the project agreement for the TUE. It is expected that the construction of the project will commence in mid-2023 for completion in 2029.
A Government spokesman said, “The TUE project is implemented under the ownership approach. The MTRCL will be responsible for the financing, design, construction, operation and maintenance of the TUE. The Government, supported by an independent checking consultant, has checked and verified the project financial estimates provided by the MTRCL. The capital cost estimate for the TUE is $19.5 billion (in December 2020 prices) and the funding gap of the TUE is $15.5 billion (July 2022 Net Present Value (NPV)). The Government will provide funding support to the MTRCL in order to implement the project.”
The Executive Council approved granting the MTRCL the property development rights of Tung Chung Area 113 and deducting a total fixed lump sum of $18.3645 billion in money-of-the-day prices (equivalent to the above-mentioned funding gap of $15.5 billion (July 2022 NPV)) from the full market value land premium of the site assessed on a “with-railway” basis in the future as funding support to the MTRCL to implement the TUE project.
Tung Chung Area 113, with an area of about 7.6 hectares, is located in the newly reclaimed land under the Tung Chung New Town Extension (TCNTE) project and in immediate vicinity to the proposed Tung Chung East (TCE) Station under the TUE project. Tung Chung Area 113 is intended for an integrated development for commercial and residential uses cum Public Transport Interchange with the provision of open space and Government, Institution and Community facilities.
“The Government has been advocating the ‘infrastructure-led’ and ‘capacity-creating’ planning principles in taking forward transport infrastructure projects. We will provide funding support to the MTRCL to implement the TUE project. Under the relevant financial arrangement, the MTRCL is required to pay land premium, which is the full market value assessed on a “with-railway” basis less the fixed lump sum, for the development of the site. The MTRCL will also bear all the associated commercial risks arising from market fluctuations and rail operations,” the spokesman said.
The TCNTE is an important source of land supply to meet Hong Kong’s housing, economic and social needs with additional planned population of about 146,000 and 38,000 in Tung Chung East and Tung Chung West respectively. The TUE will offer direct railway access to the TCNTE supporting the sustainable growth in population and employment opportunities in that area. The project mainly comprises the following parts:
(1) the extension of the railway tunnels westward from the end of the existing Tung Chung Station for about 1.3 kilometres with the construction of a new Tung Chung West Station at the west of Yat Tung Estate, to serve Yat Tung Estate, Mun Tung Estate and other housing developments in the adjacent area; and
(2) the re-alignment of approximately 1.2-kilometre long railway track section between the existing Sunny Bay Station and Tung Chung Station with a view to shifting it towards TCE reclamation area and the construction of the new TCE Station to serve the new developments of the TCE reclamation area.