page_title: Kowloon–Canton Railway
section_title: 1904–1945: Construction and early years
hierarchical_section_title: Kowloon–Canton Railway / History / 1904–1945: Construction and early years
caption_attribution_description: English: Photograph of 100 pounds sterling bond issued as part of loan for construction of the Chinese Section of the Canton-Kowloon Railway (CKR) 中文（繁體）‎: 中英銀公司為建造廣九鐵路華段籌集資金，於1907年發行面額100英鎊的債劵。 中文（简体）‎: 中英银公司为建造广九铁路华段筹集资金，于1907年发行面额100英镑的债劵。
context_page_description: The Kowloon–Canton Railway was a railway network in Hong Kong. It is owned, and was operated by the Kowloon–Canton Railway Corporation until 2007. It provided rapid transit services, a light rail system and feeder bus routes within Hong Kong, and intercity passenger and freight train services to Mainland China.
  While still owned by its previous operator, the KCRC has been operated by the MTR Corporation under a 50-year, extendible, service concession since 2 December 2007. The two companies have since merged their lines into one unified MTR system. Immediately after the merger, steps were taken to integrate the network into the same fare system as the MTR, and gates between the two networks were removed in several stages in 2008. Although the MTR Corporation is a listed company, the Hong Kong Government is the controlling shareholder.
  In 2006, the local KCR passenger train network recorded an annual ridership of 544 million.
context_section_description: Discussions between the Colonial Office in London, the Hong Kong Government and the British & Chinese Corporation, led to an agreement in late 1904 that the Hong Kong Government would undertake the financing, construction and operation of the section of the line within Hong Kong.  The remaining section to Guangzhou would be financed through a loan raised by the British & Chinese Corporation on behalf of the Chinese Government, which would operate the section after its construction by the corporation.
  Settling the detailed financing arrangements for the British and Chinese sections proved to be complicated because the funding of the British Section (as it became known) depended on the raising of the loan for the Chinese Section.  The arrangements were finally ratified by the Hong Kong Government's passage of the Railway Loans Ordinance in 1905, clearing the way for construction of the British Section. It took until 1907, however, for the loan agreement for the Chinese Section to be concluded, with the financing being provided by way of a bond issue floated in London in April of the same year.
  The importance attached to the project was reflected in a speech made to the Hong Kong Legislative Council by the colonial governor, Sir Frederick Lugard, in 1908:
  "You will recall that in 1905 it was decided to build the railway by means of a loan.  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."
  Two routes were suggested for the British Section, a western route of about 34 miles (55 km) from the tip of Kowloon peninsula via Tsuen Wan to Castle Peak Bay and thence to Yuen Long and the border with China, and a more direct eastern route of about 21 miles (34 km) requiring tunnelling through the Kowloon hills and thence to the border via Tide Cove (Sha Tin), Tai Po, Fanling and Sheung Shui. Following a detailed survey in 1905, the eastern route was proposed. Although the formal approval of the Colonial Office in London was not given until February 1906, the Governor, Sir Matthew Nathan, had anticipated a positive outcome and had already instructed the Public Works Department to start earthworks on the route from Tai Po Market to Fanling in December 1905.
  The initial estimate for the project was HK$5,053,274, which included the cost of excavating a tunnel through the Kowloon hills at Beacon Hill and reclamation in Kowloon for a terminus.  However, underestimation of the challenges, changes in design, depreciation of the Hong Kong dollar against the pound sterling (much of the equipment had to be imported from Britain), difficulties in recruiting suitable labour coupled with a high mortality and sickness rate amongst the workers (malaria, beri beri and dysentery were endemic in Hong Kong at that time) and right-of-way land acquisition costs greatly pushed up the final cost of the project.
  The most difficult part of the project was the construction of the Beacon Hill Tunnel, which ended up costing about one quarter of the whole project.  Together with the construction of the Sha Tau Kok Line, a two-foot narrow gauge branch railway from Fanling to Sha Tau Kok (making use of the rails and rolling stock used in the construction of the main line and later closed in April 1928), the final cost was HK$12,296,929, making it one of the most expensive railways in the world and, as costs escalated, the subject of much concern in both Hong Kong and London.
  Although the design called for the construction of only a single track of a standard gauge of 4 feet 8½ inches, an important decision made was to ensure that as far as possible the right-of-way of the railway, i.e. all bridges, cuttings, and embankments (with the exception of the tunnels to reduce budget), allowed
caption: £100 bond issued as part of a £1.5 million loan for the Chinese section
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