The construction process of the rail link between Sha Tin and Central will speed up with the government footing the HK$37 billion construction bill, which will also stabilize train fares, finance academics said.

Hong Kong Baptist University finance professor Billy Mak Sui-choi said the capital pressure faced by the Mass Transit Railway Corporation (MTRC) for running the project will be minimized under the government plan.

"The MTRC would face a high risk if it is to foot the construction bill and make up for it with return from property development. The MTRC will face pressure if the property market goes down. But the risk is borne by the government under the plan. Train fares will be stabilized because the MTRC is facing less risk," he said.

Mak said the project can bring economic benefit to northern New Territories.

"Land prices in the area will increase with the rail link. The government will be able to cover its cost," he said.

Hong Kong Polytechnic University civil and structural engineering associate professor Hung Wing-tat said it is appropriate for the government to foot the construction bill.

"Residents living along the rail link have different demands in regards to land use.

They want various infrastructures and facilities, such as parks, instead of residential buildings. The negotiation will drag on if the government uses the old financing pattern as it is difficult to ensure a reasonable return from property development," he said.

Democratic Alliance for the Betterment and Progress of Hong Kong legislator Lau Kong-wah welcomed the plan and urged the government to consider the affordability of citizens when deciding train fares.

Legislative Council transport panel chairman Andrew Cheng also welcomed the plan, but demanded that the government disclose details on whether the MTRC has the authority to decide train fares.

"The government is footing the bill, but the MTRC is getting the revenue. The government needs to explain to the public why it didn't launch the project back when the former Kowloon-Canton Railway Corporation promised to foot the bill," he said.

(HK Edition 03/12/2008 page1)