Hong Kong’s MTR Corp should bear responsibility for shoddy construction at residential project, lawmakers argue

MTR Corporation, announced

The MTR Corporation should be held responsible for a construction defect at a residential project atop a railway station in Hong Kong forcing the demolition of two blocks of flats, lawmakers have argued.

But according to the transport minister, the rail giant was only the landlord and not in charge of the construction process.

Weeks after New World Development announced it would demolish two of the seven blocks at The Pavilia Farm at Tai Wai and rebuild them after substandard concrete was used in podium walls, lawmakers on Wednesday grilled the minister on the role of co-developer MTR Corp, of which the government is a major shareholder.

MTR Corporation, announced

Secretary for Transport and Housing Frank Chan. Photo: Winson Wong

Secretary for Transport and Housing Frank Chan Fan said the MTR Corp was the owner of the project and responsible for its planning, as well as management of issues related to the site’s railways.

“Based on the agreement [between New World and the MTR Corp], the developer is responsible for designing, constructing, coordinating and supervising the entire project to ensure all construction works fully comply with relevant legal requirements,” he said.

The MTR Corp was only “closely monitoring the possible impact brought by the construction works on the structure of railway facilities”, including the tracks, platforms and overhead lines, he added.

The transport operator had urged the developer to conduct a full investigation and implement proper remedial measures, Chan said. The Buildings Department had required professionals hired for the project to submit a full report by July 30 and was also looking into any possible breaches of the Buildings Ordinance, he added.

New People’s Party chairwoman Regina Ip Lau Suk-yee said the rail operator’s responsibilities in relation to the project remained unclear.

“I’m surprised, as the owner, the MTR Corp, is referring the designing, constructing, coordinating and supervision of the entire project to New World,” she said. “It seems that after the tendering exercise, the MTR Corp has no responsibility in overseeing the entire project, other than trying to see if there’s an impact on the railway facilities.”

Horace Cheung Kwok-kwan, vice-chairman of the Democratic Alliance for the Betterment and Progress Hong Kong, questioned the role of the MTR Corp’s works team.

“[Their roles] are rather limited or even non-existent,” he said. “How can we be sure that won’t happen again for future projects?”

Cheung pointed out the MTR Corp had significant experience in developing property at its stations, yet “this still happened and it is regrettable”.

Chan said any compensation claims would be dealt with according to the terms and conditions of the contract between both parties, which could not be made public due to confidentiality requirements.

 “I cannot disclose the contents of the agreement,” he said. “To be frank, the government doesn’t have a copy of [it].”

The MTR Corp said it had nothing to add to Chan’s comments.

New World sent shock waves through the city’s property market when it announced it would tear down and rebuild the two blocks still being constructed at The Pavilia Farm project atop the Tai Wai MTR station in the New Territories.

The concrete walls in the podium of blocks one and eight did not meet the requirements of the approved design, it said.

The developer could end up spending as much as HK$1.2 billion (US$154.5 million) – or about 15 per cent of its expected profit for the coming year – to fix the problems.

New World attributed the mistake to human error and said the entire team of project supervisors had been fired.

The developer plans to offer two compensation options to the affected 846 buyers and let them decide whether to keep the property or cancel the purchase.

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