Chapter 3: Rail Plus Property Program, Hong Kong SAR, China
MTR Corporation
The Mass Transit Railway (MTR) Corporation was established in 1975 as a government-owned enterprise to build, operate, and maintain a mass transit railway system for Hong Kong SAR, China’s public transport needs and to conduct its business according to prudent commercial principles (Dimitriou and Cook 1998). Through the 1980s and 1990s, the government was its sole owner. In 2000, it was succeeded by the MTR Corporation Limited and about 23 percent of its shares were offered to private investors on the Hong Kong Stock Exchange. The presence of private shareholders has exerted a strong market discipline on MTR Corporation, prompting company managers to become more business-minded (Cervero and Murakami 2009). MTR Corporation was one of two rail agencies that served the city, the other being the Kowloon-Canton Railway Corporation (KCRC) fully owned by the government of Hong Kong SAR, China. In December 2007, the company began to operate KCRC’s railway system under a concession agreement with the government, generally called the “Rail Merger.” The merged 218.2-kilometer rail network consists of 10 railway lines with 84 stations serving Hong Kong Island, Kowloon, and the New Territories. A light rail network with 68 stops covers the districts of Tuen Mun and Yuen Long in the New Territories. The MTR Corporation network also includes the Airport Express, which runs between the Hong Kong International Airport and AsiaWorld-Expo in Chek Lap Kok Island, the International Commerce Centre in Kowloon, and the International Finance Centre in Central (map 3.2). MTR Corporation’s chief mission is to construct, operate, and maintain a modern, safe, reliable, and efficient mass transit railway system. Supplemented by a competitive service performance of buses and private vehicles, the integrated network carried about 4.12 million passenger trips a day in 2012 (HKSAR Transport and Housing Bureau 2012b). MTR Corporation’s share of the franchised public transport market in Hong Kong SAR, China, was 46.4 percent that year. Its share of cross-harbor traffic was 66.7 percent and of cross-boundary traffic 54.2 percent. It kept its share to and from the international airport at 21.8 percent. As a result of the high ridership and efficient operations, the company generated a net operating profit of HK$6.694 billion (US$869 million) from its transit operation and achieved farebox recovery of 185.5 percent for 2012 (MTR Corporation 2013). These are outstanding figures when compared to other world-class metro systems’ operating performance. Relations with the Government of Hong Kong SAR, China The government is the majority owner of about 77 percent of the issued MTR Corporation shares under the control of the financial secretary, permitting it to pass special resolutions (which require at least 75 percent of the shares) at MTR Corporation’s general meetings, while it can pass ordinary resolutions on its own with a majority (at least 50 percent of the shares) under the law. MTR Corporation has the power to appoint persons to the board by ordinary resolution—in other words, the government can
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