|In the last issue of this journal
I discussed my work as the Chairman of the Public Accounts
Committee. In this issue, I would like to illustrate that
my role as the top watchdog of public finance does not
I recently wrote an article about the
controversial Western Corridor Railway (WCR) Project
which appeared in both the South China Morning Post
and the Hong Kong Economic Journal on 13 June 1996.
The underlying reasons and arguments of this article
won massive support from the media and the Legislative
Council. This article and my subsequent follow-up efforts
have quite clearly enhanced transparency and led to
closer scrutiny of this hugely expensive project (which
has an estimated price tag of HK$90 billion!) by LegCo.
The WCR is a worthy infrastructure project which will
bring significant economic and transportation benefits
to Hong Kong. It must be built without delay and in
an economic manner, providing good value for money.
On the other hand, to finance this project requires
a commitment of more than half of Hong Kong's hard earned
fiscal reserves. While engineers have naturally taken
a very keen interest in this project, I think accountants
are also well placed to offer their expert knowledge
in the financial management and public governance of
this huge investment. I have therefore wasted no time
as your LegCo representative to make known my views.
Until my article hit the press, LegCo's knowledge of
the WCR project was extremely limited. Despite the fact
that the Administration has been quietly working with
the Kowloon-Canton Railway Corporation (KCRC) on the
project for more than two years, few details of the
project have been publicly revealed.
The public did not know, for example, that the KCRC
has already expended, with questionable legal authority,
some HK$433 million on consultants and other costs.
The public did not know that contractors for more than
HK$750 million worth of further consultancy contracts
have already been selected. The public did not know
that the Government intended to spend another HK$45
million on consultancy fees without even making adequate
plans for the necessary land resumption. The public
did not know that the project will almost certainly
be delayed despite bold promises of a completion date
in the year 2001. The public did not know that the KCRC
plans to borrow another HK$3 billion at the end of this
year with the intention of sinking further development
costs into the WCR project before the administration
has even given the green light for the project to go
In my article I strongly argued that the WCR project
has financial implications that must be faced immediately.
I made the following assertions:
- The public has the right to know what is going on;
while hundreds of millions of dollars of public funds
are being siphoned off through the KCRC into consultancy
fees, the Administration owes the public, through
LegCo, a clear explanation.
- LegCo should regain the legislative control over
public finance if the Administration fails to give
a clear account on the project; this could be done
by an amendment to the Kowloon-Canton Railway Corporation
- The huge investment must benefit local expertise
and not consultants from overseas on an almost exclusive
basis and it is particularly important that the Administration
gain and retain the experience and technological know-how
necessary to manage major infrastructure projects
in the future.
- If the Administration and the KCRC choose to ignore
these calls, LegCo should demand a full investigation
- demanding that the Governor to invoke s 15 of
the Audit Ordinance to ask the Director of Audit
to audit the entire affair and report on the case
to the Public Accounts Committee, or
- setting-up its own select committee and to summon
officials from the Government and the KCRC to openly
explain their decisions at public hearings.
- The Administration, as a matter of urgency, must
take a stance in regard to the financial feasibility
of the project before sinking further millions of
public funds into consultancy fees for detailed technical
- The Administration must take up direct responsibility
to co-ordinate the project, borrowing expertise from
the KCRC if necessary, in order not to duplicate efforts
and waste valuable time in the decision-making process.
The KCRC project is a classic case demonstrating that
a timely response in bringing the Administration under
audit supervision can save time and substantial costs.
It can also enhance in the minds of the public, as in
this case, the role of professional accountants in the
scrutiny of public finance.