The Chief Executive-in-Council today approved the financial arrangement for the Tung Chung Line Extension (TUE).

Subsequently, the Transport & Logistics Bureau has signed with the MTR Corporation (MTRC) the project agreement for the TUE. Construction of the project is expected to start in mid-2023 for completion in 2029.

The Government said the MTRC will be responsible for the TUE’s financing, design, construction, operation and maintenance. Supported by an independent checking consultant, the Government has checked and verified the project's financial estimates provided by the MTRC.

The capital cost estimate for the TUE is $19.5 billion (in December 2020 prices) and the funding gap is $15.5 billion (July 2022 Net Present Value (NPV)). The Government will provide funding support to the MTRC in order to implement the project.

The Executive Council approved granting the MTRC the property development rights of Tung Chung Area 113 and deducting a total fixed lump sum of $18.3645 billion in money-of-the-day prices from the site's full market value land premium, as funding support to the MTRC to implement the TUE project.

The full market value land premium concerned was assessed on a “with-railway” basis in the future, and the fixed lump sum to be deducted is equivalent to the above-mentioned funding gap of $15.5 billion (July 2022 NPV).

Tung Chung Area 113, with an area of about 7.6 hectares, is in the newly reclaimed land under the Tung Chung New Town Extension project and in immediate vicinity to the proposed Tung Chung East Station under the TUE project.

Tung Chung Area 113 is intended for an integrated development for commercial and residential uses/public transport interchange, with the provision of open space and government, institution or community facilities.

“Under the relevant financial arrangement, the MTRC is required to pay a land premium, which is the full market value assessed on a 'with-railway' basis less the fixed lump sum, for the development of the site. The MTRC will also bear all the associated commercial risks arising from market fluctuations and rail operations,” the Government noted.

The TUE will offer direct railway access to the Tung Chung New Town Extension supporting the sustainable growth in population and employment opportunities in that area. There is an additional planned population of about 146,000 and 38,000 in Tung Chung East and Tung Chung West respectively.