MTR Corporation
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| MTR Corporation Limited Traditional Chinese: 地下鐵路 |
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| Type | Public - HKSE: 0066.HK |
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| Founded | Hong Kong, (1975) |
| Headquarters | Hong Kong |
| Key people | CK Chow, CEO Raymond Ch'ien Kuo-fung, Chairman |
| Industry | Transport, property |
| Products | Railways, property developer |
| Revenue |  $4,385 million HKD (first 6 months of 2005) |
| Employees | 6,513 (end-2005) |
| Slogan | More time for life |
| Website | http://www.mtr.com.hk/ |
- MTRC may also refer to the Toyota Motor Triathlon Race Car.
MTR Corporation Limited (Traditional Chinese: 地鐵有限公司), previously known as Mass Transit Railway Corporation (香港地下鐵路公司) is a company listed on the Hong Kong Exchange (SEHK: 0066 LSE: MTR) and included in the Hang Seng Index. It is the company that owns and runs the MTR metro system. It also invests and builds railways in different parts in the world.
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[edit] History of the Corporation
The Mass Transit Railway Corporation (MTRC) was established in 1975 as a government-owned statutory corporation in order to oversee the initial construction of the Hong Kong Mass Transport System, and later to run and manage the functioning transport system. On 30 June 2000 the MTRC was succeeded by the MTR Corporation Limited (MTRCL). 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 maintains a majority stake in the MTRCL.
[edit] Privatisation
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 ten-fold 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.
[edit] Operations
The MTR Corporation Limited is responsible for the operation of MTR 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 organizations worldwide.
[edit] Property Management
Property is one of the main businesses of the MTR. 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.
[edit] Shopping Centres
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 centers developed and managed by the corporation include Paradise Mall (杏花新城), Telford Plaza (德福廣場), Luk Yeung Galleria (綠楊坊) and The Lane (連理街).
[edit] Operations outside Hong Kong
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.
The company conducted a feasibility report to build a light rail in Macau. The company concluded initials concession agreement to build phase 2 of the Line 4 of Shenzhen Metro, and to operate the whole line on a BOT basis. The company is also exploring business opportunities in Beijing Subway and a metro system in Wuhan.
MTR corporation were bidding for the West Midlands Train route in England, but have since withdrawn their bid.
They are also interested to take over the Öresund trains in Sweden and Denmark toghether with SJ AB.
[edit] Proposed MTRCL-KCRC merger
There has been some discussion of merging the Kowloon-Canton Railway Corporation (KCRC), which is also government-owned, and the MTR to make the territory's transport system more efficient. The MTRCL backs such a merge while the KCRC opposes the plan. In March 2004, the Hong Kong Government officially encouraged the two companies to merge.
On April 11, 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 will grant a Service Concession to the MTRCL to operate the KCR system, with an initial period of 50 years. The KCRC will 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 will make a payment of $7.79 billion for the acquisition of property and other related commercial interests. [1] [2] [3] [4]
The railway lines the KCRC operates are less profitable than the MTRC, and the KCRC is less active in property development. It is 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 can avoid actually selling the KCRC.
The Chinese name of the MTRCL will be changed after being granted the Service Concession while the English name will remain unchanged. The KCRC will be a holding company of the KCR system, without actual railway operations.
The merger is subject to approval by shareholders of the MTRCL. The Government and management of the MTRCL has stated the major shareholder (75%), the Government, will not vote, i.e. the merger will be decided by minority shareholders.
[edit] Future Expansion
The following railways are constructed or planned by MTR currently:
- South Tseung Kwan O Line Extension (Finish in 2009)
- West Island Line (Finish in 2012)
- South Island Line (Under Planning)
- Kwun Tong Line West Extension (Under Planning)
- Tung Chung Line Extension (Under Planning)
The following railways are constructed or planned by KCR currently, and they are projected to hand over to MTR if the merging of both companies is successful:
- Lok Ma Chau Spur Line (Open in 2007)
- Kowloon Southern Link (Finish in 2009)
- KCR East Rail Island Extension (Under Planning)
- Sha Tin to Central Link (or South-East Kowloon Line) (Under Planning)
- New Territories Northern Link (Under Planning)
[edit] See also
[edit] External links
MTR Properties and MTR Property Management
