Thursday, January 21, 2010

Yet another white elephant

The Hong Kong government likes to believe that it is in tune with an economy driven by economic liberalism and focus on return on capital. In reality it has become the tool of two types of vested interest.

One is the clutch of property development groups who buy the loyalty of civil servants through post- retirement jobs and other perks. Maximizing the tycoons' return on capital takes precedence over the interest of the public and its revenue which government is supposed to represent. On the political side there is Beijing, leaning on a spineless chief executive, Donald Tsang, to speed up integration with the mainland and focus on capital spending regardless of rate of return.

Never were these twin tendencies better illustrated than by the government's pushing through a legislature dominated by business interests elected by small circles of voters of a project to spend more than HK$60 billion on a 26-km high-speed railway connecting Hong Kong to a line being built to link Guangdong to the border town of Shenzhen. It is not even very high-speed. Its design speed is 200 kph compared with the standard 350kph for China's high-speed trunk routes.

The prospect has aroused intense opposition from youthful protesters and from villagers who would be displaced by the line. The most telling arguments against the project are financial. The government has made barely any effort to justify the spending either in commercial or environmental terms for the very good reason that it is impossible. Instead the project is being hurried through on the basis of unsupported claims that Hong Kong would be marginalized if left out of China's high speed network.

The cost per kilometer would make this the world's most expensive railway, all to cover a distance which currently takes 20 minutes by car and roughly the same by the existing slow-speed railway.

The cost is exceptionally high largely because it is planned to take the line right into the middle of Kowloon, one of the world's most densely populated areas, tunneling both through reclaimed land and under high-rise buildings. Suggestions that the terminus be located in the New Territories, closer to the border and where construction costs would be far lower, have been dismissed. Why? Because the property giants which control so much of downtown Kowloon want it there. And they have Donald Tsang and his clutch of bureaucrats in their pocket. The same groups are also deeply involved in the construction industry, like their counterparts in Japan who influenced the long-ruling LDP into government funding of endless roads and bridges to nowhere but which generated handsome profits for the construction industry.

From Beijing's political viewpoint, the high-speed rail has significance for three reasons. First it is needed to show that Hong Kong really is part of China and follows Beijing's lead rather than deciding for itself how best to spend it resources. Second, it reflects Beijing's belief that all infrastructure building is a good thing, and should take precedence in government spending over the likes of health care, cleaning up the environment, or ensuring decent living conditions for the old and disadvantaged. Third, it must go ahead because many people object. Tsang must show that he is as arrogant as the central government and will not listen to rational arguments, let alone to student and peasant dissidents.

1 comment:

je_n'habite_plus_à_HK said...

Ahhh, Hong Kong is the most overdevelopped island on earth. There is no good reason for this rail link (as there is no good reason for that weird road link they build to bridge 'the gap' between what was it, Causeway Bay and Central (which are practically within spitting distance anyways). How's the West Kowloon Cultural District going????