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MTR Corporation Limited

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Type	Public (SEHK: 0066, OTC: MTRJY)
Industry	Transport, property
Founded	Mass Transit Railway Corporation (1975 (1975)) MTR Corporation Limited (2000 (2000))
Headquarters	Kowloon Bay, Hong Kong
Area served	Hong Kong, China, London, Stockholm, Melbourne
Key people	Jay Walder, CEO Chien Kuo Fung, Chairman
Services	Railways, property developer
Revenue	HK$334.24 Billion, 13.2%
Profit	HK$148.48 Billion, 13.2%
Total assets	HK$1553.24 Billion
Owner(s)	Government of Hong Kong 76% Shareholders 24%
Employees	14,134 (2008)
Website	www.mtr.com.hk
References: Data and info sorce： -《MTRC Press Release》、 All data last updated at 31/12/11

MTR Corporation Limited is a company listed on the Hong Kong Exchange (SEHK: 0066) and Hang Seng Index. MTR runs the Hong Kong MTR metro system, and is also a major property developer and landlord in Hong Kong. It also invests in railways in different parts in the world, and has obtained contracts to operate rapid-transit systems in London, Stockholm, Beijing, Shenzhen, and Melbourne.

History of the Corporation[link]

The Mass Transit Railway Corporation (Chinese: 地下鐵路公司) was established in 1975 as a government-owned statutory corporation so as to look over the initial construction of the Hong Kong Mass Transport System. Later, it operates and manages the functioning transport system. On 30 June 2000 the MTRC was succeeded by the MTR Corporation Limited (MTRCL, Chinese: 地鐵有限公司). As with the MTRC, the MTRCL's principal business is to operate the mass transit railway system. Following a successful initial public offering, the MTRCL was listed on the Hong Kong Stock Exchange on 5 October 2000, however the government is still the major stakeholder in the MTRCL.

On 2 December 2007, the company started running the original KCRC railway system, which the plan is commonly known as the MTRCL-KCRC merger. The Chinese name of the company became 香港鐵路有限公司 (literally translated as Hong Kong Railway Corporation Limited) but English equivalent remained Mass Transit Railway (MTR). The logo of MTR symbolises a railway line connecting Hong Kong Island and Kowloon.

Privatisation[link]

This unreferenced section requires citations to ensure verifiability.

On 5 October 2000, the MTR Corporation Limited became Hong Kong's first privatised rail and metro company, which marked the start of the Hong Kong government's planned initiative to wind down its interests in various public utilities. Prior to its listing on the Hong Kong Stock Exchange, the Mass Transit Railway Corporation was wholly owned by the Hong Kong Government. The offering involved the sale of around one billion shares, and the company now has the largest shareholder base of any company listed in Hong Kong. In June 2001, MTR was transferred to Hang Seng Index.

At the time of the initial public offering, the company was operating with a budget surplus of HK$360 million, which had increased from a surplus of HK$278 million in 1997. However, after the IPO profits decreased as the company lost much of its subsidies (mainly development rights of lands) from the government, dropping to HK$139 million. Yet, this trend seems to have reversed, as profits grew more than tenfold in the fourth quarter of 2004, making it one of the few profitable public transport systems in the world.

MTR Corporation has always been reliant on developing properties next to railway stations for its profits (although the rail lines are profitable themselves); many recently built stations are incorporated into large housing estates or shopping complexes. Examples of this type of construction can be seen at Tsing Yi station, which is built next to the Maritime Square shopping centre, and directly underneath the Tierra Verde housing estate.

Hong Kong Operations[link]

World Wide House, built by the MTR Corporation Limited.

The MTR Corporation Limited is responsible for the operation of MTR (and KCR since 2 December 2007) in Hong Kong. Besides railway operations, the MTRCL is also actively involved in the development of key residential and commercial projects above existing stations and along new line extensions as well as many other commercial activities associated with the railway. The most recent of such developments was the large Maritime Square shopping centre development which was built in conjunction with Tsing Yi station. The MTRCL is also involved in the letting of retail and poster advertising space, ATM banking facilities, and personal telecommunication services. It also provides consultancy services to organisations worldwide.

Rail Services[link]

Mass Transit Railway (MTR) is the rapid transit railway system in Hong Kong. Originally opened in 1979, the system now includes 211.6 km of rail with 155 stations, including 86 railway stations and 69 light rail stops.

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  Map

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  Station

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  Train

MTR-KCR merger[link]

Railway network after merger

Ticket gates at key interchange stations have been removed one year after the merger

There had been some discussion of merging the Kowloon–Canton Railway Corporation (KCRC), which was also government-owned, and the MTR to make the territory's transport system more efficient. The MTRCL backed such a merge while the KCRC opposed the plan. In March 2004, the Hong Kong Government officially encouraged the two companies to merge.

On 11 April 2006, the Hong Kong Government officially announced the details of the proposed merger. Under the non-binding Memorandum of Understanding the Government has signed with KCRC, KCRC would grant a Service Concession to the MTRCL to operate the KCR system, with an initial period of 50 years. The KCRC would receive a one-time upfront payment of HK$4.25 billion, a fixed annual payment of HK$750 million and a variable annual payment based on revenues generated from operation of the KCR system. In addition, MTRCL would make a payment of $7.79 billion for the acquisition of property and other related commercial interests.^[1]

The railway lines the KCRC operated were less profitable than the MTRC, and the KCRC was less active in property development. It was widely considered that the Government's choice was to avoid being criticised for selling assets of the KCRC, which it wholly owned to MTRCL at an underpriced level. Leasing the operation right of the KCR system to the MTRCL could avoid actually selling the KCRC.

On 2 December 2007, the Chinese name of the MTRCL was changed to 香港鐵路有限公司^[2] (literal translation: Hong Kong Railway Corporation Limited) after being granted the Service Concession while the English name will remain unchanged.^[3][4] The KCRC is now a holding company of the KCR system, without actual railway operations. The merger was approved by shareholders of the MTRCL on 9 October 2007. The merger is effective for 50 years.

Fare reductions[link]

All adult Octopus Card holders would be the first to benefit from the merger.^[5] Student and Concessionary Octopus holders would also benefit from the merger by further reducing $0.1 from their 50% off fares.^[5] Student Octopus holders would continue to pay the current reduced concessionary fares on the MTR network. Elderly Octopus holders would be introduced to a new fare system which only the elderly can enjoy a $2 fare to anywhere on the MTR network (excluding Airport Express, Light Rail, and Cross-Boundary Stations).^[6]

Future expansion[link]

The following railway links are being constructed or planned by MTR currently:

• West Island Line (Island Line extended westward to Kennedy Town; under Construction, to be completed in 2014)
• South Island Line (East and West) (Two lines to the south of Island Line, to South Horizons residential area and Wong Chuk Hang; under planning, South Island Line (East) to be completed in 2015)
• Kwun Tong Line Extension (to Ho Man Tin and Whampoa; under planning,to be completed in 2015)
• Sha Tin to Central Link (extension of Ma On Shan Line to Tsim Sha Tsui, Kwun Tong Line extension to Whampoa, and East Rail Line to Admiralty; under planning;)
• Northern Link (New Territories) (Line from Kam Sheung Road to Chau Tau and Lok Ma Chau; under planning)
• North Island Line (absorption of Island Line by the Tung Chung and Tseung Kwan O lines; proposal deferred to 2016)

Property management[link]

Property is one of the main businesses of the MTR with the profits from this arm outstripping those from fares. In 2009 of a net profit of HK$7.3 billion, MTR made HK$3.55 billion from property and HK$2.12 billion from transport operations.^[7] The MTR tries to develop suitable sites related to their new railway projects and their existing railway. For instance, the reclaimed land situated in West Kowloon that is owned by the MTR will be developed into an area with residential, office and retail space. Two of Hong Kong's largest banks, HSBC and the Bank of China are to have office towers there. Furthermore, will be more than 7,000 housing units in the development. The MTR also owns several shopping centres, as well as the new International Finance Centre.

Shopping centres[link]

The MTR Corporation invested heavily to develop large scale shopping centres around MTR stations. An example of such a shopping centre is Maritime Square (青衣城) located at Tsing Yi station. Maritime Square is a nautical-themed mall in which there are supermarkets, boutiques, bookstores, a cinema, and restaurants. Since Tsing Yi station serves as the transportation hub for Tsing Yi, Maritime Square is also easily accessible by other transportation means including buses and taxis. Other shopping centres developed and managed by the corporation include Paradise Mall, Telford Plaza, Luk Yeung Galleria and The Lane.

Overseas Operations[link]

United Kingdom[link]

On 24 November 2004, it was revealed that the MTRC (together with GNER) is one of the main players in acquiring the South Eastern Trains franchise in the United Kingdom. However, Govia has been selected as the operator.

MTR corporation were bidding for the West Midlands Train route in England, but have since withdrawn their bid.

The company and Laing Rail established a joint venture for the London Overground franchise. In December 2006, Govia and MTR Laing were selected to submit "best and final offers" for the franchise. On 19 June 2007, MTR Laing successfully won the London Overground franchise. MTR Laing has since changed its name to London Overground Rail Operations Limited (LOROL), as Laing Rail Group has become acquired by Germany's Deutsche Bahn. LOROL is mainly managed by Laing Rail Group Management moved from their Chiltern Railways division with MTR providing specialists as needed.

In February 2009, MTR Corporation were shortlisted as a possible company to run the Tyne and Wear Metro service in Newcastle upon Tyne, UK.^[8]

They have submitted a bid for the Thameslink and Essex Thameside franchise.

Macau[link]

The company conducted a feasibility report to build a light rail in Macau.

Sweden and Denmark[link]

They are also interested to take over the Öresund trains in Sweden and Denmark together with SJ AB.

On 20 January 2009, it was announced that MTR was awarded the contract to operate the Stockholm Metro. The contract is for eight years with an option to extend the agreement for another six years. MTR started operating the metro on 2 November 2009.^[9]

Australia[link]

In July 2008 there were reports that they are bidding to have the right to operate Melbourne's extensive metropolitan train network, aligned with United Group.^[10] In August 2008 it was confirmed that they had been shortlisted.^[11]

On 25 June 2009 MTR were awarded the rights to operate Melbourne's train network as part of a joint venture with John Holland Melbourne Rail Franchise and United Group Rail Services.^[12] The contract began on 30 November 2009 and it will continue for 8 years, with the option of extending that contract for another 7 years.^[12] It is set to operate as a locally themed consortium MTM (Metro Trains Melbourne). MTR took over from Melbourne's existing network operator (French-owned firm Connex) on 30 November 2009.^[12][13]

People's Republic of China[link]

The company concluded initials concession agreement to build phase 2 of the Longhua Line of Shenzhen Metro, and to operate the whole line on a BOT basis for 30 years. The phase 2 of Longhua Line have been in test-run for passengers since 16 June 2011. The company has also formed a joint-venture Beijing MTR Corp. Ltd. with Beijing Capital Group ("BCG"), and the Beijing Infrastructure Investment Co. ("BIIC") to build and operate Line 4 of Beijing Subway and its extension Daxing Line of Beijing Metro for 30 years since its inauguration.^[14]

See also[link]

• MTR
• Kowloon-Canton Railway Corporation

References[link]

External links[link]

• MTR Corporate Website
• Press release on Wuhan (Adobe Systems Acrobat PDF format)
• History and Development of the Company, EDGAR Online.
• Transport for London press release

MTR Properties and MTR Property Management

• Maritime Square Website
• Paradise Mall Website
• Luk Yeung Galleria Website
• Telford Plaza Website
• Residents Portal

Documentaries

• MTR Underground Iron - The Building of a Railway (1/5)
• MTR Underground Iron - The Building of a Railway (2/5)
• MTR Underground Iron - The Building of a Railway (3/5)
• MTR Underground Iron - The Building of a Railway (4/5)
• MTR Underground Iron - The Building of a Railway (5/5)

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