Sunday, November 29, 2015   

Escalator `a costly white elephant'

Yonden Lhatoo

Wednesday, November 06, 1996

T HE Mid-Levels escalator has been exposed by the Director of Audit as a white elephant that devoured millions of dollars of taxpayers' money because of government bungling.

A Director of Audit report said the escalator overshot its budget by 153 per cent and did not fulfil its main purpose, reducing traffic between Central and Mid-Levels.

The report has also revealed that although concerns had been expressed within the government about impending increases in the cost of the project, the information was withheld from the Legislative Council's Finance Committee when it was approached for funding.


The Highways Department's handling of the project was criticised.

Construction of the escalator began in February 1991, with cost estimated at $97 million in 1994 prices.

The report points out that the cost of the project was subsequently revised five times to $245 million at 1994 prices. The escalator was opened to the public in October 1993.

Land-resumption costs for the project also shot up from the original estimate of $41 million in 1990 prices to $115 million _ a 180 per cent increase. But the Public Works Sub-committee was not told of the need for more land when its approval was sought.

The report found the main reasons for the cost rises included the risks and complexities associated with the project not being addressed in the pre-tender estimates, and costs rising because of delays.

The project was revised to replace a 270-metre-long section of the escalator at street level by an elevated walkway, and further revisions were made as work progressed.

Price fluctuations in the cost of labour and materials were also reasons behind the increase.

The report also points out that a "before-and-after" study by the Transport Department indicated no obvious reduction in traffic congestion.

The Audit Director recommends that in future, any increase in project costs should be justified in terms of its main objectives and benefits. The cost of a project should be closely monitored, he says.

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