Almost 100 years ago, Hong Kong was on the verge of a bold investment decision - building a railway to connect with Mainland China. The vision of linking up this small city with its huge hinterland beyond the border was mooted as early as the mid-18th century by the renowned British engineer Rowland Stephenson, also known as the founding father of the railways in India.

It took considerable time before the vision could be turned into reality. The conventional wisdom held that the marine traffic between Hong Kong and the Mainland, mainly by ferry, had been running very well and that building a railway at huge cost was totally unnecessary.

A change of attitude came only at the turn of the century, when railway development connecting big cities was sweeping the Mainland. Facing the risk of being left behind, the Hong Kong colonial administration decided in 1905 to finance, build and operate a rail line by the name of the Kowloon-Canton Railway, which would run from the Kowloon Peninsula to Canton (Guangzhou), where it would hook up with the Peking-Canton Railway, the important national trunk line leading north to the Chinese capital.

While the Mainland section was financed by means of a bond issue raised by a joint venture of the Hong Kong & Shanghai Banking Corporation and Jardine, Matheson & Company, the colonial administration, though small and with limited resources, committed to shouldering the cost of the Hong Kong section.

Touting the importance of the Kowloon-Canton Railway project at a Legislative Council meeting in 1908, Sir Frederick Luard, the then Hong Kong Governor, said: "It was not a question of whether the undertaking would be an immediately remunerative concern; it was not a question of whether the railway should pay interest and sinking fund on the capital expended, or even if it would at once pay working expenses. It was a question of preserving the predominance of Hong Kong. It was a question of seeing that the final outlet of the main trunk railway should be at Kowloon, and at no other place."

Connectivity has always been the key to Hong Kong's survival and sound development. It was the case a century ago. It remains so today.

At the time there were two proposals for the alignment of the Kowloon-Canton Railway - a 55km westward route to the border through Tsuen Wan, Tuen Mun and Yuen Long, and a 34km direct line to the north through Sha Tin. The most daunting technical problem for the latter was the need to bore a tunnel through Beacon Hill between Kowloon and Sha Tin. After carrying out the investigation works, the northern direct line option was chosen.

According to press reports, the project ended up costing $12 million, an eye-popping sum at the time. The tunnel alone accounted for 25% of the bill. A railway terminus to be built in Tsim Sha Tsui next to the busy Victoria Harbour on reclaimed land took up a sizable share of the bill.

Also costly was the reserving of space for a parallel track to be laid in the future. That feature, considered by some as an unnecessary extravagance, was vindicated when Hong Kong's economy took off decades later and double tracks were made possible by electrification of trains. In any case, the huge cost at the time brought the project the unenvied label "one of the most expensive railways in the world" and attracted London's attention.

For decades, the Kowloon-Canton Railway has carried local passengers between the urban areas and the New Territories. What's more, by connecting with the Mainland, the railway was Hong Kong's lifeline for the import of daily staples such as rice and pigs. Despite the gradual phasing out of rail cargo, the railway has maintained its important transport role, carrying 270,000 cross-boundary passengers a day.

Provision of bridges and roads is the basic responsibility of any government. The Hong Kong Government spent about $4.9 billion on road construction and maintenance last year. Expenditure of this sort aims to benefit the whole society.   

As with education, infrastructure projects including roads and railways are investments to spur social progress. Given the huge capital outlay involved and the uncertainty over long-term profitability, private companies seldom want to participate. 

The Government, on the contrary, considers the value of this expenditure on the basis of public need and interest, the benefit it will bring to this generation and the next. The money thus spent is a worthwhile long-term commitment.

It is the same story with the Guangzhou-Shenzhen-Hong Kong Express Rail Link. The same principle of worthwhile expenditure is behind this $50 billion-plus project. Railways are meant to last. A well-connected and useful railway benefits people of successive generations for centuries. The Kowloon-Canton Railway, which has lived up to the challenges of the past century, is a case in point.  

When the Kowloon-Canton Railway was built, how its economic benefits should be calculated was beyond the comprehension of most laymen. In the case of the Express Rail Link, the Government estimates that the economic benefits over the MTRC's 50 years of operation will amount to $87 billion, just in terms of the travelling time, safety of travellers and costs to railway operators saved.

The railway's residual value of $31 billion is not included. Not only will there be no need for continuous annual funding by taxpayers, a total of $28.1 billion in public revenue is expected during the MTRC's operation period.

As impressive as it is, the figure of $87 billion does not include the additional travel spending, service and business opportunities of the population flows generated by the high-speed railway, not to mention the non-economic benefits of making business trips and family visits easier, and the contribution to cultural and social integration.

Early implementation of the Express Rail Link has obtained wide support from Hong Kong society. The design and construction of the project are based on functional needs without any unnecessary ornamental extravagance.

The expensive pricetag is attributable mainly to the fact that the link has to be built underground to protect the environment, the global rise in the price of construction materials, and locating the West Kowloon Terminal underground so that the public can enjoy the space above ground. The open space will link up with the West Kowloon Cultural District to become a vast expanse of greenery in our bustling city and become a new tourist attraction.

Indeed, some foreign experts with long experience in high-speed railways support Hong Kong's decision to press ahead with this project of strategic importance. They are using the Hong Kong example as part of their international reference materials for promoting high-speed rail.

Under Secretary for Transport & Housing Yau Shing-mu