I think we have found the #2 city in urban rail construction costs, behind only New York. This is Hong Kong, setting a world record for the most expensive urban el and encroaching on Singapore for most expensive non-New York subway.
As we look for more data to add to our transit costs website, I looked at Hong Kong to see what was going on. I remembered that its costs were high, but didn’t remember details – I think the project I was thinking of was the longest, the Sha Tin to Central link, but I looked at all recent, under construction, and planned MTR lines. I summarized the results on Twitter, but I’d like to cover this in more detail here.
The projects and their costs
Tung Chung Line extension: a planned line for construction in 2023-30, a total of 1.8 km underground, HK$18.7 billion, or around US$3.1 billion, or $1,730 million per km. Even giving it 1.8 km seems like I’m doing Hong Kong a favor – the extension is 1.3 km, and the other 500 meters are overrun tracks at the Hong Kong Island end, which I don’t ever count elsewhere since it is not in-service trackage. In addition to the tunneling (and single underground station), there is a single at-grade infill station, whose contribution to the budget is approximately zero.
West Island Line: 3 km underground, HK$18.5 billion. This is around US$3.4 billion, or $1,130 million per km. Only six lines globally are more expensive than this: phase 6 of the Circle line in Singapore, and the five New York lines, of which three are not even open yet. This is not even regional rail, but construction is entirely within the Hong Kong CBD, explaining why it is so expensive even by local standards.
Sha Tin-Central: 17 km, HK$87.3 billion, or around US$14.5 billion. This is $850 million per km. The line is not even fully underground, just 90%: the northernmost segment, totaling around 10%, is elevated. This line near-ties Crossrail and the Melbourne Metro Tunnel for most expensive line in the world longer than about 5 km – New York is building short lines, the longest (Gateway) around 5 km depending on source. The line is partially regional rail: it includes a 6 km extension of the East Rail Line under Victoria Harbour toward Admiralty, but the other 10 km is not regional rail.
Tuen Mon South Extension: 2.4 km, HK$11.4 billion, all elevated, in an outlying residential area. This is $790 million per km, making it the world’s most expensive el – New York’s most recent els, the JFK and Newark Airport connectors, were positively reasonable by this standard, only around $270 million/km adjusted for inflation (but don’t worry, the PATH estimates in the near future are a lot worse).
Kwun Tong Line extension: 2.6 km, HK$7.2 billion (same source as West Island). This is around US$1.3 billion, or $500 million per km. It’s the standard high cost of projects around the world, common for regional rail tunnels and CBD tunneling, except that this is strictly on the Kowloon side without as much older infrastructure to cross – it even misses a connection to the East Rail Line.
South Island Line (East): 7 km, HK$16.9 billion, around US$3 billion – see same source as West Island, or SCMP reporting. This is $430 million per km. This is not a fully underground line: as explained here, 2 km is on viaduct, serving Ap Lei Chau. Notice also that the original cost estimate was HK$7 billion, but by the time construction rose the budget had risen to $12.4 billion, and the final budget was $16.9 billion.
Is Hong Kong in the Anglosphere?
I’ve argued before that the single biggest predictor of an urban rail project’s cost is whether it is in the Anglosphere – the correlation of an Anglosphere dummy in our database is 0.54, more than even whether the project is underground or elevated. So it’s worth asking, is Hong Kong in the Anglosphere? There are arguments both ways, but I believe the preponderance of evidence points to yes.
- Hong Kong was under British rule until 1997.
- The legal system is traditionally based on English common law, even if there’s been a recent shift toward Chinese law.
- There is extensive exchange of knowledge with the core (white) Anglosphere, with managers who’ve moved around like Jay Walder, political leaders who have second passports in the UK (like Carrie Lam) or sometimes Canada or Australia, and Anglo media that reprints MTR press releases about its property development model.
- The design layout of the MTR has obvious British influences, including for example the use of cross-platform transfers between the core lines. Similarities with China are the result of convergent evolution (China is influenced by the USSR, which was influenced by Britain). There are some similarities with Japan, like the smartcard system’s use as electronic money, but they are smaller.
- Hong Kong’s love of privatization and high inequality is very Thatcherite. Again, the similarities with Japan are smaller – Japan’s privatization is slower, and Japanese corporations rely on mutual obligations whereas Hong Kong (like Singapore) expects brutal working hours of employees without offering them lifetime employment in return.
The one non-British aspect of the MTR is its use of property development subsidies (and before anyone asks: no, the costs above are just infrastructure, not property development). MTR expansion is funded by a mixture of property development, for which the MTR receives land at below-market rates, and more direct subsidies.
However, this is still more an Anglo aspect than an Asian one. Democratic East Asia notably does not give corporations land for below-market prices, not in the 21st century. Moreover, the British fascination with the Hong Kong model, which fascination is not present in France or Germany or probably anywhere else with reasonable construction costs and democratic constraints on the state, suggests that the elites in Britain and the US would like to be governed this way, just as many would like to be governed by the Lee clan. There is, in contrast, almost no curiosity about democratic East Asian governance, even after that 200 million people region proved itself to deal with corona better than any other.
Corona is a little awkward to bring in because Hong Kong’s infection numbers look like those of an East Asian democracy (it has the civil service of one), whereas the most similar country to Hong Kong on most matters, Singapore, has those of a Gulf state full of indentured migrant workers who got infected at extremely high rates. But for engineering, it doesn’t seem terribly important what the immigration numbers are – for example, Sweden and Norway are extremely similar to Finland even though they have way more immigrants, and likewise Saudi Arabia is similar to the other, immigrant-heavier Gulf states. So overall, Hong Kong’s public transport situation can be seen as very similar to Singapore’s – and Singapore has very high costs as well.
What does this mean?
I don’t know. Singapore and Hong Kong’s costs are probably higher than those of the core Anglosphere, but I am uncertain – Singapore’s big projects are not unusually expensive by Canadian or British standards, and the Sha Tin-Central link is legitimately difficult, the kind that Sweden would build for $250 million/km rather than for $130 million/km. So it’s hard to tell whether there is something about Hong Kong that goes beyond standard Anglo dysfunction.
I do not know what Hong Kong’s historic costs were. I expect them not to be so high – Singapore’s weren’t through phases 1-5 of the Circle line, and only exploded with the Downtown and Thomson lines, and Canada’s only exploded in the late 2000s and 2010s as it decided to privatize state planning and adopt design-build contracting.
However, in the present and near future, Hong Kong is a model to study purely for its failures, much like Singapore. The leaders of Hong Kong, in their rush to emulate Chinese repression tactics, should perhaps also learn something from Chinese construction techniques – or, ideally, Korean ones, Korea being the only Asian country among the world’s cheapest. People in other countries should aim to study Hong Kong’s infrastructure construction as an example to avoid, and not one to emulate.