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HONG KONG MASS TRANSIT RAILWAY

A SUCCESS STORY

PRESENTED BY

Ir Thomas S K LAICEng, MICE, MIStructE, MHKIE

Chairman HKIE UK CHAPTER

1

BIRTH & GROWTH OF

HONG KONG MASS TRANSIT RAILWAY

UP TO DATE

2

HONG KONG

• LOCATED AT THE PEARL RIVER

ESTUARY ON THE SOUTHERN

COAST OF CHINA

VICTORIA HARBOUR

3

HARBOUR FRONT

4

August 2003 77

5

STAR FERRY

August 2003 66

6

CULTURAL REVOLUTION

• In 1966 – CULTURAL REVOLUTION

RAGING IN CHINA

• SPILLED OVER TO HONG KONG

• FARE INCREASE IN STAR FERRY

• RIOTS

• SERIOUS DISRUPTION

TO PUBLIC TRANSPORT

7

CULTURAL REVOLUTION

HONG KONG IN

CRISIS

8

CULTURAL REVOLUTION

HONG KONG IN

CRISIS

危 机

• Danger Opportunity

PUBLIC LIGHT BUS9

PLB

PLB

10

PLB

• AVAILABLE - FREQUENT SERVICE

• CONVENIENT - PASSENGERS HOP ON

AND OFF ANYWHERE ALONG ROUTE

• PREMIUM FOR SERVICE

• POPULAR WITH PASSENGERS

11

HONG KONG GOVERNMENT

•VIABILITY OF UNDERGROUND RAILWAY SYSTEM

•CONFIRMED BY CONSULTANT‟S FEASIBILITY STUDY

•1975 - MASS TRANSIT PROVISIONAL AUTHORITY

•1976 - MASS TRANSIT RAILWAY CORPORATION

MTRC

12

MTRC

THE MASS TRANIST RAILWAY

ORDINANCE

13

MTRC

• WHOLLY GOVERNMENT

OWNED ENTERPRISE

14

MTRC

• MANDATED TO BUILD AND OPERATE AN UNDERGROUND RAILWAY SYSTEM

• ON PRUDENT COMMERCIAL PRINCIPLES

• HAVING REGARD TO THE REASONABLE REQUIREMENTS OF THE PUBLIC TRANSPORT SYSTEM OF HONG KONG

15

MTRC

HONG KONG GOVERNMENT PUTS IN

INITIAL EQUITY (HK$ 800 M)

MTRC BORROWS REST IN OPEN

MONEY MARKET

16

PREFERRED SYSTEM

INITIAL SYSTEM

LETTER OF INTENT SIGNED WITH JAPANESE

CONSORTIUM FOR THE INITIAL SYSTEM

(20 km) AS A SINGLE DESIGN & BUILD CONTRACT

17

INITIAL SYSTEM

OIL CRISIS

CONSORTIUM WITHDREW

18

19

MODIFIED INITIAL SYSTEM

MIS

(15.6 km)

25 CIVIL & 10 E&M

DESIGN AND BUILD

CONTRACTS

20

MIS

GOVERNMENT SET UP MASS

TRANSIT ADVISER (MTA) TO:

• CO-ORDINATE BETWEEN MTRC & GOVERNMENT DEPARTMENTS

• FACILITATE TIMELY POLICY MAKING & ISSUE RESOLUTION

21

MIS

DIFFERENT LEVEL OF COMMITTEES & WORKING

GROUPS:

• GOVERNMENT / MTR LIAISON COMMITTEE

• GOVERNMENT / MTR PUBLICITY COMMITTEE

• METRO PUBLIC RELATIONS POLICY GROUP

22

MIS

• LAND ACQUISITION CO-ORDINATION COMMITTEE (LACC)

• STATION AND TRANSPORT INTEGRATION COMMITTEE

(STIC)

• SAFETY AND SECURITY CO-ORDINATION COMMITTEE

(SSCC)

• TRAFFIC MAMAGEMENT GROUP (TMG)

• UTILITIES CO-ORDINATION GROUP (UCG)

23

INSPECTORATE OF RAILWAY

(UK)

• APPOINTED BY GOVERNMENT AS

ADVISER ON RAILWAY SAFETY

• PROVIDES INPUT DURING DESIGN

• INSPECTS RAILWAY SYSTEM

• RECOMMENDS OPENING

24

MIS

IMPORTANCE OF PUBLIC RELATIONS

• OBSERVATION WINDOWS ON HOARDINGS

• GROWING FOR YOU

25

MIS

IMPORTANCE OF PUBLIC RELATIONS

• CEREMONIES OF COMMENCEMENT

& COMPLETION OF WORKS

26

MISIMPORTANCE OF PUBLIC RELATIONS

PARTICIPANTS (STAKEHOLDERS) INCLUDE:

CORPORATION REPRESENTATIVES

CONTRACTORS

CONSULTANTS

GOVERNMENT OFFICIALS

LEGISLATORS

DISTRICT COUNCILLORS

LOCAL DIGNITARIES

27

MIS

IMPORTANCE OF PUBLIC RELATIONS

• TEAM BUILDING

• PUBLICISING PROGRESS OF WORKS

GROUNDBREAKING CEREMONY

BY CHAIRMAN SIR NORMAN THOMPSON

AT KWUN TONG28

MIS

WORK STARTED

• NOVEMBER

1975

29

MIS

• FIRST CHAIRMAN – SIR NORMAN THOMPSON

DIRECT ACCESS TO THE GOVERNOR

SIMPLE & CLEAR MESSAGES

• PROJECT MANAGER – HONG KONG &

SHANGHAI BANK HQ BUILDING

30

MIS

• FIRST M.D. – PROF. TONY RIDLEY

• M.D. – LONDON UNDERGROUND

MAJOR IMPROVEMENT TO THE SYSTEM

• PROFESSOR – IMPERIAL COLLEGE

LONDON

31

MIS

• HONG KONG PEOPLE

– EXCITEMENT

– EXPECTATION

– DETERMINATION

32

MIS

• HONG KONG PEOPLE

HIGH DEGREE OF TOLERENCE

&

CO-OPERATION

33

MIS

PROJECT MANAGEMENT APPROACH:

• QUICK DECISION-MAKING

• REGULAR MONITORING OF EFFECT OF CHANGES ON BUDGET & PROGRAMME

• APPROPRIATE DELEGATION OF AUTHORITY

• SHARE RISKS & BENEFITS WITH CONTRACTORS

34

MIS

• BASED ON PROVEN TECHNOLOGY

• PROJECT MOTTO:

IF IT IS ESSENTIAL,

GET ON WITH IT.

IF IT IS DESIRABLE,

FORGET IT.

35

MIS

GOVERNMENT

COMMUNITY MTRC

UNITY IN PURPOSE

MIS

GROUND CONDITIONS

ALLUVIAL DEPOSITS

GRANITE (VARYING DEGREE OF

DECOMPOSITION)

HARD ROCK

36

MIS

37

STATION WALL CONSTRUCTION

MIS

38

STATION CONSTRUCTION

MIS

39

INSITU HORSESHOE TUNNEL

MIS

40

PRECAST CONCRETE TUNNEL

LINING

SGI TUNNEL LINING

41

MIS

NGAU TAU KOK STATION &

VIADUCT42

MIS

KOWLOON BAY DEPOT

43

MIS

ADMIRALTY STATION

EXCAVATION44

MIS

IMMERSED TUBE CASTING

45

MIS

MIS

46

IMT

47

MIS

• FROM KWUN TONG TO CENTRAL

KWUN TONG TO SHEK KIP MEI

– OPERATIONAL ON 1 OCTOBER 1979

48

MIS

• FROM KWUN TONG TO CENTRAL

KWUN TONG TO TSIM SHA TSUI

– OPERATIONAL ON 31 DECEMBER 1979

49

MIS

• FROM KWUN TONG TO CENTRAL

KWUN TONG TO CENTRAL

– OPENED BY PRINCESS ALEXANDRA

ON 12 FEBRUARY 1980

50

MIS

• FROM KWUN TONG TO CENTRAL

ON TIME AND WITHIN BUDGET

51

MIS

ESTIMATED COST IN 1975 HK$ B

(INCL. 7% p.a. ESCALATION TO 1980) 5.8

CONSTRUCTION COST 5.6

INCL. INTEREST AND FINANCE COSTS 7.3

52

MIS

• NO SMOKING

• NO EATING

• NO DRINKING

• NO MUSIC/RADIO

53

MIS

• CLEAN

• QUIET

• EFFICIENT

• RELIABLE

• AIR-CONDITIONED

54

MIS

SUCCESS

55

TSUEN WAN LINE

LAI KING TO KWAI FONG VIADUCT

56

TWL

• ENGINEER‟S DESIGN

• CONTRACTOR‟S ALTERNATIVE

PROPOSALS CONSIDERED &

ADOPTED

LAI KING TO KWAI FONG

CROSS-OVER

57

TWL

• SET UP STRONG IN-HOUSE

PROFESSIONAL PROJECT

MANAGEMENT TEAM

• HANDS-ON STYLE

58

TWL

• PROJECT TEAM RESPONSIBLE FOR:

FEASIBLITY STUDY

PROPOSAL TO GOVERNMENT

SPECIFICATION

APPOINTMENT OF CONSULTANTS

TENDERING

CONTRACT AWARD

DESIGN MANAGEMENT

CONSTRUCTION MANAGEMENT

TESTING & COMMISSIONING

HANDOVER TO OPERATIONS

59

TWL

• TSUEN WAN LINE

– TSUEN WAN

TO CENTRAL

– OPERATIONAL

10 May 1982

(AHEAD OF PROGRAMME)

60

TWL

ESTIMATED COST IN 1978 HK$ B

(INCL. ESCALATION TO 1982) 4.1

CONTRACT COSTS 3.7

CORPORATION COST

CONSULATANTS‟ FEES

LAND ACQUISITION

COMPENSATION 0.7

FINAL CONSTRUCTION COST 3.9

INCL. INTEREST AND FINANCE COSTS 5.3

61

ISL

62

ISL

• ISLAND LINE

– CHAI WAN TO ADMIRALTY

31 MAY 1985

– CHAI WAN TO SHEUNG WAN

23 MAY 1986

FORTESS HILL STATION

63

ISL

ESTIMATED TOTAL COSTS HK$ B

AT 1986 PRICES 10.9

(EXCL. INTEREST AND FINANCE

COSTS)

FINAL COST 10.0

INCL. INTEREST AND FINANCE COSTS 11.9

64

ISL

• CHAIRMAN & CEO :

SIR WILFRID NEWTON STRENGTHENED CORPORATION‟S FINANCE

LAID SOUND FOUNDATION FOR FUTURE

GROWTH

RE-ORGANISED HONG KONG STOCK

EXCHANGE AFTER MARKET COLLAPSE

DIRECTOR OF HONG KONG & SHANGHAI

BANKING CORPORATION (HSBC)

HON. FELLOW - HKIE

CHAIRMAN – LONDON TRANSPORT

OVERSAW JUBILEE LINE EXTENSION

CONSTRUCTION

65

MTR

ARRIVAL & GROWTH OF MTR

COINCIDE WITH :

TRANSFORMATION OF HONG KONG

FROM REGIONAL CITY

TO INTERNATIONAL FINANCIAL CENTRE

66

HONG KONG LEASE

• 99-YEAR LEASE EXPIRES ON 1 JULY 1997

• GOVERNMENT DEPENDS ON SALE OF LAND LEASES FOR REVENUE

• NEEDS TO KNOW ITS FUTURE

• NEGOTIATION BETWEEN LONDON & BEIJING

67

HONG KONG LEASE

• BRITISH PRIME MINISTER VISITED BEIJING

• OFFER TO EXCHANGE SOVEREIGNTY FOR ADMINSTRATION

• OFFER REJECTED BY CHINA

68

HONG KONG LEASE

BUT AGREED TO:

• SET UP JOINT LIAISON COMMITTEE (JLC)

• CONTINUE NEGOTIATION

• MAINTAIN STABILITY & PROSPERITY OF

HONG KONG

69

HONG KONG LEASE

• NEGOTIATION NOT GOING WELL

• UNCERTAINTY

70

HONG KONG LEASE

• JITTERY & GLOOMY

• INVESTMENTS PUT ON HOLD

• STOCK MARKET CRASH

• PROPERTY BUBBLE BURST

71

HONG KONG LEASE

HONG KONG DOLLAR PLUNGES

FROM AROUND HK$ 6 = US$ 1

TO

OVER HK$ 9 = US$ 1

72

HONG KONG LEASE

PEOPLE RUSH TO SUPERMARKET

TO BUY :

RICE

73

HONG KONG LEASE

PEOPLE RUSH TO SUPERMARKET

TO BUY :

RICE &

BABY‟S POWDERED MILK

74

HONG KONG LEASE

• CURRENCY PEG

HK$ 7.8 = US$ 1

75

HONG KONG LEASE

• CALM THE CITY

• STOP PANIC

76

August 2003 85

HONG KONG LEASE

• IN 1984 BRITAIN & CHINA SIGNED

JOINT DECLARATION ON FUTURE OF

HONG KONG

• CHINA TO REGAIN FULL SOVEREIGNTY

ON 1 JULY 1997

77

HONG KONG LEASE

PROMISE TO HONG KONG PEOPLE

• HONG KONG PEOPLE GOVERN HONG KONG

• WITH HIGH DEGREE OF AUTONOMY

• ONE COUNTRY TWO SYSTEMS

• NO CHANGE FOR 50 YEARS

78

HONG KONG LEASE

•ENSHRINED IN

BASIC LAW

•LODGED WITH

UNITED NATIONS

79

HONG KONG LEASE

• CURRENCY PEG

HK$ 7.8 = US$ 1

• REMAINS TO THIS DAY

80

MTRC

• BORROWING IN US$

• REVENUE IN HK$

• ADVERSE IMPACT BY

HIGH INTEREST RATE (12%)

DEVALUATION

81

MTRC

• HONG KONG GOVERNMENT TO

INCREASE EQUITY

(HK$ 2.5 B ISSUED, 2.5 B ON CALL )

• SHIFT BORROWING TO BE

HK$ DENOMINATED

82

MTRC

• IN NO POSITION TO FINANCE NEW

EXTENSIONS

83

EASTERN HARBOUR

CROSSING

EASTERN HARBOUR CROSSING

ENTRANCE84

EHC

• BOT PROJECT BY OTHERS

• LINKING KWUN TONG TO QUARRY BAY

• THIRD CROSS HARBOUR TUNNEL

CARRYING ROAD AND RAILWAY

• RAIL PORTION LEASED TO MTRC

85

EHC

MTRC PAYS SEMI-ANNUAL INSTALMENTS FOR

18½ YEARS TOTALLING HK$ 2.6 B

OTHER CAPITAL INVESTMENT

INCL. ROLLING STOCKS 0.365 B

IMMERSED TUBE CASTING

86

EHC

OPENED BY PRINCE OF WALES

ON 1 OCTOBER 1989

87

AFTER JOINT DECLARATION

• UNCERTAINTY REMOVED

• CONFIDENCE RETURNED

LIPPO CENTRE

CHECKERBOARD IN SIGHT

88

KAI TAK AIRPORT

STEADY AS SHE GOES

89

KAI TAK AIRPORT

DO YOUR WINDOW SHOPPING

BEFORE YOU LAND90

KAI TAK AIRPORT

SEE....I LAND IT ON THE ROOF

91

KAI TAK AIRPORT

HARD RIGHT TURN AND DIVE

92

KAI TAK AIRPORT

BUT LANDING ON THE

RUNWAY...... IS NOT ALWAYS

EASY93

KAI TAK AIRPORT

SOMETIMES.... ENDED UP IN THE

WATER94

KAI TAK AIRPORT

95

AIRPORT CORE PROJECTS

RELOCATE AIRPORT FROM KAI TAK TO CHEK LAP KOK

96

AIRPORT CORE PROJECTS

• APPROVED BY BEIJING

& LONDON

97

AIRPORT CORE PROJECTS

• OBJECTIVES:

– TO STIMULATE ECONOMY

– TO FACILITATE FUTURE GROWTH

– TO ELIMINATE AVIATION HAZARD

– TO BE COMPLETED IN TIME FOR HANDOVER

98

ACP

• AIRPORT AT CHEK LAP KOK

• TSING MA BRIDGE

• LANTAU & AIRPORT RAILWAY

99

ACP

• KAP SHUI MUN BRIDGE

• TING KAU BRIDGE

• HIGHWAYS

• RECLAMATIONS

• THIRD CROSS HARBOUR ROAD

TUNNEL (WESTERN HARBOUR CROSSING)

100

ACP

• HK$ 127 BILLION £ 10 BILLION

101

ACP

CHINA‟S CONCERN:

• ROSE GARDEN PROJECT

• EMPTY TREASURY

• HIGH DEBT

102

ACPAGREEMENT REACHED TO:

• LEAVE HK$ 25 B MIN. IN TREASURY

• CAP GOVERNMENT BORROWING

AT HK$ 5 B UNLESS AGREED OTHERWISE

• CAP ANNUAL LAND SALE

NO MORE THAN 50 ha /year

103

ACP

• ESSENTIAL TO HAVE CHINA‟S

AGREEMENT AND SUPPORT TO

ASSURE INVESTORS

• WRANGLING OVER FINANCIAL DATA

DELAYED PROJECT START

104

ACP

AT TIME OF HANDOVER

ON 30 JUNE/1 JULY 1997

• CHINESE PRESIDENT ARRIVED BY PLANE AT THE NEW AIRPORT

• LAST BRITISH GOVERNOR LEFT ON ROYAL YACHT BRITANNIA

105

ACP

PROJECT COMPLETED IN 1998

HONG KONG INTERNATIONAL

AIRPORT106

TSING MA BRIDGE

(ROAD + RAIL)107

108

LANTAU & AIRPORT LINE

109

LAL

AIRPORT EXPRESS LINE(AEL)

AIRPORT – HONG KONG

23 MINUTES JOURNEY

IN-TOWN-CHECK-IN

110

LAL

TUNG CHUNG LINE(ON SHARED TRACK WITH AEL)

TUNG CHUNG - HONG KONG

COMMUTER LINE

ALSO PROVIDES RELIEF

TO NATHAN ROAD CONGESTION

111

LAL

FINANCIAL SUPPORT AGREEMENT (FSA)

WITH GOVERNMENT

• HK$ 23.7 B ADDITIONAL EQUITY BY GOVERNMENT

• 62 ha LAND FOR DEVELOPMENT

• DEFERRAL OF DIVIDENDS UNTIL 2001

• REVENUE DEFICIENCY PAYMENTS

(80% FOR NO MORE THAN 2 YEARS

IF DELAYED BY OTHERS)

112

LAL

• EXTENSIVE APPLICATION OF

VALUE ENGINEERING

• INTRODUCE PARTNERING

NO MORE SLIDING SEATS

113

TUNG CHUNG LINE

AEL TRAIN

114

AIRPORT EXPRESS

• SPACIOUS SEATING

• PLEASANT AMBIENCE

• BUSINESS CLASS COMFORT

FROM PLANE,

THROUGH TRAIN,

TO HOTEL

115

LALTCL

OPERATIONAL ON 22 JUNE 1998

AEL

OPERATIONAL ON 6 JULY 1998

116

LAL

HK$ B

PROJECT COST 35.1

(INCLUDING CAPITALISED INTEREST)

FINANCED BY:

EQUITY 23.7

DEBT 11.4

117

TSEUNG KWAN O LINE

118

TKL

• TSEUNG KWUN O LINE

– COMMUTER LINE

– FROM PO LAM TO NORTH POINT

– OPERATIONAL ON 17 AUGUST 2002

TKL

I st JULY – 1997

ASIAN FINANCIAL CRISIS

MAJOR REVIEW OF THE

PROJECT

119

120

TKL

INITIAL CAPITAL COST ESTIMATE HK$ B

INCL. CAPITALISED INTEREST 30.5

FINAL COST 16.0

HANG HAU STATION

TKL

121

NORTH POINT CAVERN

122

DISNEYLAND RESORT LINE

123

DISNEYLAND RESORT LINE

124

DRL

• DISNEYLAND RESORT LINE

– FROM SUNNY BAY TO DISNEYLAND

– OPERATIONAL ON

12 SEPTEMBER 2005

125

ASIAWORLD-EXPO STATION

126

ASIAWORLD-EXPO STATION

127

ASIAWORLD-EXPO STATION

AIR STATION –

ASIAWORLD-EXPO

OPERATIONAL ON

20 DECEMBER 2005

128

NGONG PING 360

129

NGONG PING 360

130

NGONG PING 360

131

NGONG PING 360

132

NGONG PING 360

AIRPORT ISLAND STATION TUNG CHUNG TERMINAL

133

NGONG PING 360

• MATERIAL DELIVERY

– HELICOPTERS

– MULES

134

NGONG PING 360

SCHEDULED OPENING 24 JUNE 2006

OPERATIONAL 18 SEPT 2006

OFFICIAL OPENING 9 NOV 2006

NGONG PING 360

OPERATION SUSPENDED 11 JUNE 2007

OPERATION RESUMED 31 DEC 2007

SUBSIDIARY COMPANY SET UP TO

MANAGE & OPERATE THE SYSTEM

135

136

MTR CORPORATION

AN OUTSTANDINGLY SUCCESSFUL

ENTERPRISE

137

MTRC

SUCCESSES PROFILERATING

PROJECT MANAGEMENT

RAILWAY OPERATION

FINANCIAL EXPERTISE

TRAINING & DEVELOPMENT

PROPERTY

AUTOMATIC FARE COLLECTION

138

MTRC

• INVEST HEAVILY IN STAFF TRAINING & DEVELOPMENT

• CORE VALUES :

CUSTOMER SERVICE

RESPECT FOR THE INDIVIDUAL

ON TIME AND WITHIN BUDGET

139

MTRC

• PROVIDES PROFESSIONAL

TRAINING SERVICES TO OTHER

RAILWAYS IN:

– MAINLAND CHINA

– SOUTHEAST ASIA

140

PROPERTY DEVELOPMENT

& MANAGEMENT

• GOVERNMENT ALLOCATE LAND AT

FULL MARKET VALUE ALONG THE

RAILWAY FOR DEVELOPMENT

141

PROPERTY DEVELOPMENT

& MANAGEMENT

• MAJOR & REPUTABLE PROPERTY DEVELOPER AND MANAGER IN TOWN

• JOINT VENTURES

– RESIDENTIAL

– RETAIL

– OFFICES

– HOTEL

142

PROPERTY DEVELOPMENT

& MANAGEMENT

• SUBSTANTIAL CONTRIBUTION

TOWARDS COST OF RAILWAY

• CAPTURED PASSENGERS

(FORMING PART OF 2.4 M DAILY

RIDERSHIP)

143

PROPERTY DEVELOPMENT

& MANAGEMENT

PROCEEDS FROM DEVELOPMENTS HELP TO:

• KEEP FARES AT REASONABLE LEVEL

• MAINTAIN & EXTEND RAIL NETWORK

144

PROPERTY DEVELOPMENT

& MANAGEMENT

TELFORD GARDEN

145

PROPERTY DEVELOPMENT

& MANAGEMENT

PROPERTY DEVELOPMENT

& MANAGEMENT

146

PARK VIEW

PROPERTY DEVELOPMENT

& MANAGEMENT

147

CENTRAL STATION RETAIL

PROPERTY DEVELOPMENT

& MANAGEMENT

148

TELFORD PLAZA

MARITIME SQUARE

149

PROPERTY DEVELOPMENT

& MANAGEMENT

PROPERTY DEVELOPMENT

& MANAGEMENT

150ELEMENTS

2IFC

151

2 INTERNATIONAL FINANCE

CENTRE

152

UNION SQUARE

ICC

153

INTERNATIONAL COMMERCE

CENTRE

• 118 FLOORS

• 490 METRES HIGH

• THIRD TALLEST

BUILDING IN THE

WORLD

154

ICC

ICC

GATEWAY TOWERS

155

• PROPERTY OPEARATIONS

& MANAGEMENT

CHINA – BEIJING

156

GINZA MALL

PROPERTY DEVELOPMENT

& MANAGEMENT

AS AT END 2010:

Investment properties :

• 12 shopping malls + 18 floors at 2 IFC

• 277,942 sq.m in Hong Kong

Managed properties:

• 81,962 residential units in Hong Kong

• 744,214 sq.m commercial properties in Hong Kong

• 776,402 sq.m in Mainland China157

158

AUTOMATIC FARE COLLECTION

• ELECTRO-MAGNETIC CARD

• STORED VALUE CARD

• CONTACTLESS SMART CARD

159

AUTOMATIC FARE COLLECTION

ELECTRO-MAGNETIC CARD

• PLASTIC

• RE-USABLE

• NO LITTER

• ISSUED BY MACHINE / HAND

• FIXED VALUE

• ELECTRO-MAGNETIC

• SINGLE JOURNEY

160

MIS• NO SMOKING

• NO EATING

• NO DRINKING

• NO MUSIC/RADIO

• NO TICKET FLICKING

161

AUTOMATIC FARE COLLECTION

STORED VALUE

• PLASTIC

• RE-USABLE

• NO LITTER

• ISSUED BY MACHINE / HAND

• FIXED VALUE

• ELECTRO-MAGNETIC

• MULTIPLE JOURNEYS

• UNRESTRICTED LAST JOURNEY

• ADVANCE REVENUE COLLECTION

• REDUCTION IN CASH HANDLING

162

AUTOMATIC FARE COLLECTION

OCTOPUS CONTACTLESS SMART CARD

• PLASTIC

• ISSUED BY MACHINE / HAND

• RE-USABLE

• NO LITTER

• MULTIPLE JOURNEYS

• ADVANCE REVENUE

• RADIO FREQUENCY IDENTIFICATION (RFID)

• NO CONTACT AT TURNSTILE

• TOP UP VALUE

• FURTHER REDUCTION IN CASH HANDLING

• ACCEPTED BY BUSINESS PARTNERS

163

OCTOPUS CONTACTLESS

SMART CARD

• RELIABLE TICKETING

• LABOUR SAVING

• DATA FOR:

OPERATIONAL PLANNIN INCLUDING PRICING

164

OCTOPUS CONTACTLESS

SMART CARD

• FORERUNNER OF:

• EZ-LINK – SINGAPORE

• OYSTER CARD – LONDON

• EASYCARD - TAIPEI

165

OCTOPUS CONTACTLESS

SMART CARD

OTHER USES:

PUBLIC TRANSPORTS

CAR PARKS

ACCESS CONTROL TO BUILDINGS

CONFIRMATION OF STUDENTS‟

ATTENDANCE AT SCHOOL

OCTOPUS CONTACTLESS

SMART CARD

AT END OF JUNE 2011:

• 24.3 MILLION CARDS ISSUED (18.7 MILLION ACTIVE)

• 11.7 MILLION DAILY TRANSACTIONS

• HK$ 112.7 MILLION PER DAY

• ADOPTED BY OVER 3000 SERVICE PROVIDERS

166

167

MTR CORPORATION LTD

LISTED ON THE HONG KONG

EXCHANGE

ON 5 OCTOBER 2000

168

MTRCL

EXPANSION

NEW VISION :

• TO BE A WORLD CLASS ENTERPRISE

• GROWING IN HONG KONG & BEYOND

• FOCUSING ON RAIL, PROPERTY &

RELATED BUSINESS

169

MTRCL

• NEW MISSION :

• EXCELLENT VALUE FOR CUSTOMERS

• OPPORTUNITIES FOR STAFF

• DEVELOP RAILWAY NETWORK AS BACKBONE OF PUBLIC TRANSPORT IN HONG KONG

• GROW IN MAINLAND CHINA & CAPTURE OPPORTUNITIES IN EUROPE

170

MTRCL

• NEW CORE VALUES :

EXCELLENT SERVICE

VALUE CREATION

MUTUAL RESPECT

ENTERPRISING SPIRIT

171

MERGER

• HONG KONG GOVERNMENT ANNOUNCED

MERGER PROPOSAL BETWEEN MTRCL & KCRC

ON 11 APRIL 2006

172

MERGER

• KCRC

• ORIGINALLY A GOVERNMENT DEPARTMENT

• TURNED INTO A WHOLLY GOVERNMENT

OWNED PUBLIC CORPORATION

• CHARGED TO OPERATE AND DEVELOP

DOMESTIC, CROSS-BOUNDARY AND INTERCITY

RAILWAY SERVICES

• IN A PRUDENT COMMERCIAL MANNER

173

MERGER

KCRC

• OPERATES:

– EAST RAIL

– WEST RAIL

– LIGHT RAIL

– INTERCITY TO GUANGZHOU

– FREIGHT TO INTERIOR OF MAINLAND CHINA

174

MERGER

KCRC

• PROPERTY DEVELOPMENT

&

MANAGEMENT

175

MERGER

• HONG KONG GOVERNMENT ANNOUNCED MERGER PROPOSAL BETWEEN MTRCL & KCRC ON 11 APRIL 2006

• MTRCL SIGNED MEMORANDUM OF UNDERSTANDING (MOU) WITH HK GOVERNMENT

176

MERGER

MOU PROVIDES FOR:

• REDUCED FARE

• ABOLITION OF SECOND BOARDING CHARGE

• FURTHER DISCOUNTS FOR MEDIUM & LONG DISTANCE JOURNEYS

• INTRODUCTION OF AN OBJECTIVE, TRANSPARENT & PREDICTABLE FARE ADJUSTMENT MECHANISM (FAM)

• FULLY INTEGRATED INTERCHANGE STATIONS FOR SHATIN TO CENTRAL LINK

• IMPROVEMENT ON EXISTING INTERCHANGE ARRANGEMENTS IN THE SHORT TERM

• PROVISION OF SEAMLESS INTERCHANGE ARRANGEMENTS WITH FUTURE EXTENSIONS

177

MERGER

MOU PROVIDES FOR

• JOB SECURITY FOR ALL FRONTLINE STAFF

178

MERGER

DEAL TERMS

• PROVIDE A BALANCED PACKAGE FAIR TO ALL

STAKEHOLDERS

179

MERGERDEAL TERMS

• ACQUISITION OF RENEWABLE OPERATIONAL RIGHT OF

KCR FOR 50 YEARS

– UPFRONT PAYMENT OF HK$4.25 BILLION FOR SERVICE

CONCESSION AND TO PURCHASE CERTAIN RAIL ASSETS

– HK$7.79 BILLION FOR A PROPERTY PACKAGE

– FIXED ANNUAL PAYMENT OF HK$750 MILLION

– VARIABLE ANNUAL PAYMENT BASED ON REVENUES

GENERATED FROM KCR‟S RAIL AND RAIL-RELATED

OPERATIONS

• EXPECTED TO BE EPS & NPV ACCRETIVE FOR MTRCL

180

MERGER

MEET THE GOVERNMENT‟S FIVE PARAMETERS

1. ADOPTION OF A MORE OBJECTIVE AND TRANSPARENT FAM

2. ABOLITION OF THE SECOND BOARDING CHARGE & REVIEW FARE STRUCTURE TO REDUCE FARES

3. EARLY RESOLUTION OF INTERCHANGE ARRANGEMENTS FOR RAIL PROJECTS UNDER PLANNING, NOTABLY THE SHATIN TO CENTRAL LINK

4. ENSURE JOB SECURITY FOR FRONTLINE STAFF

5. PROVISION OF SEAMLESS INTERCHANGE ARRANGEMENTS IN THE LONG TERM

181

MERGER

BENEFITS

• SYNERGY

• ECONOMIES OF SCALE

• COST EFFICIENCY

• INTEGRATED RAIL SYSTEM

182

MERGER

TRANSITION - ONE YEAR OR MORE

SHARE PRICE JUMPED 5.3%

(FROM HK$19 TO 20)

RAIL MERGER BILL APPROVED BY LegCo

on 8 JUNE 2007

OUTLOOK - BRIGHT

MERGED

• COMPLETED ON

2 DECEMBER

2007

• 香港鐵路有限公司

183ONE COMPANY ONE TEAM

184

MERGED

MERGED

• 211 Km ROUTE LENGTH

• 82 STATIONS

• 9 COMMUTER LINES

• AIRPORT EXPRESS

• LIGHT RAIL

• DISNEYLAND RESORT LINE

• FEEDER BUS SERVICE

• CABLE CAR

• INTERCITY PASSENGER SERVICE

• INTERCITY FREIGHT SERVICE

• 3 MILLION DAILY PASSENGERS185

MERGED

• ONE COMPANY, ONE TEAM

186STAFF INTEGRATION

MTR CORPORATION LTD

GROWTH MOMENTUM

187

DUBAI

188

DUBAI

189

METRO & AIRPORT LINES

DUBAI

CONSULTANCY

TO REVIEW DESIGN PROPOSALS IN

RESPECT OF :

OPERATION &

MAINTENANCE

190

VIADUCT CONSTRUCTION

INDIA

Delhi Airport Metro

Express Line

(AMEL)

• Major engineering &

project management

contract191

192

UK BUSINESS

BIDS

193

UK BUSINESS

LORO (MTR/LAING )

FRANCHISE TO OPERATE

NORTH & EAST LONDON

OVERGROUND LINES

FROM 11 NOVEMBE 2007

FOR 7 YEARS

WITH OPTION FOR 2 FURTHER YEARS

SUCCESS

194194194

UK BUSINESS

LOROL (MTR/DEUTSCHE BAHN)

ACTION ON DAY ONE

• OYSTER TICKETING SYSTEM

• NEW TICKETING MACHINES

• STATIONS GATED

195195

UK BUSINESS

(MTR/DEUTSCHE BAHN)

• IMPROVEMENT IN:

1. SERVICE OPERATION

2. PUNCTUALITY

3. SAFETY

4. SECURITY

• TICKETLESS TRAVEL DOWN

• REVENUE UP

196196196

UK BUSINESS

(MTR/DEUTSCHE BAHN)

PROGRAMME FOR:

• CUSTOMER SERVICE TRAINING

• STATION CLEANING AND REPAIR

• STATION REFURBISHEMENT

• STATION REMODELLING

• NEW EXTENSIONS

UK BUSINESS

• “….so gradually all suburban rail services in London

can be brought up to the standard of London

Overground.”

Ken Livingstone

Mayor of London

197

(MTR/DEUTSCHE BAHN)

EUROPE BUSINESS

STOCKHOLM UNDERGROUND

TOOK OVER OPERATION 2 NOVEMBER 2009

(FOR 8 YEARS MINIMUM)

198

AUSTRALIAN BUSINESS

METRO TRAINS MELBOURNE

TOOK OVER OPERATION ON 30 NOVEMBER 2009

(FOR INITIAL PERIOD OF 8 YEARS)

199

200

CHINA BUSINESS

201

CHINA BUSINESS

SHANGHAI

TOGETHER WITH ITS JOINT VENTURE PARTNER,

APPOINTED AS:

OWNER‟S REPRESENTATIVE TO PROJECT MANAGE

DESIGN AND CONSTRUCTION OF LINE 9

OWNER‟S ADVISOR OF LINE 8 & LINE 11

202

CHINA BUSINESS

BEIJING LINE 4

– INITIALLED IN FEBRUARY 2005

– COMPANY FORMED IN JANUARY 2006

– AGREEMENT SIGNED ON 12 APRIL 2006

203

CHINA BUSINESS

BEIJING LINE 4

– PPP

– 30-YEAR CONCESSION AGREEMENT WITH BEIJING

MUNICIPAL GOVERNMENT

– FOR INVESTMENT, CONSTRUCTION & OPERATION

OPENED 28 SEPTEMBER 2009

DAXING LINEOPENED 30 DECEMBER 2010

204

CHINA BUSINESS

SHENZHEN LINE 4

– 30-YEAR BOT PROJECT

– CONCESSION AGREEMENT WITH SHENZHEN MUNICIPAL GOVERNMENT

– „RAIL + PROPERTY‟

– INITIALLED IN MAY 2005

– PHASE 1 TAKEN OVER 01 JULY 2010

– PHASE 2 OPENED 16 JUNE 2011

BUSINESS OUTSIDE HONG KONG

205

COMPANY SHARE

BEIJING MTR CORPORATION LTD. (BJMTR) 49%

MTR CORPORATION ( SHENZHEN) LTD. (SZMTR) 100%

METRO TRAINS MELBOURNE PTY. LTD. (MTM) 60%

MTR STOCKHOLM AB (MTRS) 100%

TUNNELBANAN TEKNIK STOCKHOLM AB (TBT) 50%

LONDON OVERGROUND RAIL OPERATIONS LTD. (LOROL) 50%

MTR HANGZHOU LINE 1 INVESTMENT CO. LTD. 100%

206

MTRCL

• PROFITABLE

0

2

4

6

8

10

12

14

16

Turnover

Operating profit before depreciation (after property development profit)

Net profit excluding investment property revaluation

HK$B

14.2

10.7

8.6

MTRCL

207

MTRCL

208

209

MTRCLCONSOLIDATED P & L A/C

(YEAR ENDED 31 December 2010) HK$ M

• REVENUE 29,500

• PROFIT ON PROPERTY DEVELOPMENTS 4,034

• OPERATING PROFIT BEFORE DEPRECIATION 10,917

• NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 12,059

210

MTRCL

AS AT END 2010:

PATRONAGE ( million)

Yearly 1,564

Daily 4.5

HONG KONG GOVERNMENT

INFRASTRUCTURE INVESTMENT

• 2007-2008 POLICY ADDRESS

ANNOUNCES TEN MAJOR

INFRASTRUCTURE PROJECTS

• ANNUAL EXPENDITURE OF

HK$ 50 BILLION (£ 4 BILLION)

IN COMING YEARS

211

HONG KONG GOVERNMENT

INFRASTRUCTURE INVESTMENT• Transport Infrastructure

1. South Island MTR Line

2. The Sha Tin to Central MTR Link

3. The Tuen Mun Western Bypass and Tuen Mun-Chek Lap KokLink

• Cross-boundary Infrastructure Projects

4. The Guangzhou-Shenzhen-HK Express Rail Link

5. HK-Shenzhen Airport Co-operation

6. HK-Zhuhai-Macao Bridge

7. HK-Shenzhen Joint Development of the Lok Ma Chau Loop

• New Urban Development Areas

8. West Kowloon Cultural District

9. Kai Tak Development Plan

10. New Development Areas (NDAs) 212

213

RAILWAY EXTENSIONS

RAILWAY EXTENSIONS

214XRL

RAILWAY EXTENSIONS

215WIL

RAILWAY EXTENSIONS

216KTE

RAILWAY EXTENSIONS

217SCL

RAILWAY EXTENSIONS

218SIL(E)

RAILWAY EXTENSIONS

EXTENSION PROJECT FUNDING

XRL SERVICE CONCESSION

(GOVERNMENT CAPITAL + MTRCL OPERATIONS)

WIL CAPITAL GRANT

KTE RAIL + PROPERTY

SCL SERVICE CONCESSION

SIL(E) RAIL + PROPERTY

219

220

RAILWAY BUILDING

& MANAGEMENT

FEASIBILITY

IDENTIFY TRANSPORT NEEDS

FEASIBILITY STUDY

ROUTE PROTECTION

PROPOSAL TO GOVERNMENT

221

RAILWAY BUILDING

& MANAGEMENT

PRE-CONTRACT

PREPARATION OF CONTRACT DOCUMENTS

DESIGN STANDARDS MANUAL

MATERIALS & WORKMANSHIP SPECIFICATION

CONDITIONS OF CONTRACT

BILLS OF QUANTITIES

APPOINTMENT OF CONSULTANTS

TENDERING

CONTRACT AWARD

222

RAILWAY BUILDING

& MANAGEMENT

CONSTRUCTION

DESIGN MANAGEMENT

CONSTRUCTION MANAGEMENT

PROTECTION OF ADJACENT PROPERTIES

TESTING & COMMISSIONING

APPROVAL BY RAILWAY INSPECTORATE

HANDOVER TO OPERATIONS

223

IN SERVICE IMPROVEMENTS:

NEW INTEGRATED ENTRANCES

ENTRANCE UPGRADE

RETROFITS - PLATFORM SCREEN DOORS

FACILITIES FOR THE PHYSICALLY IMPAIRED

KIOSKS

CONDITION MONITORING

MAINTENANCE

RAILWAY PROTECTION

RAILWAY BUILDING

& MANAGEMENT

224

MTRCL

A STORY

OF

OUTSTANDING SUCCESS

225

MTRCL

HONG KONG PEOPLE

ENGINEERS MTR STAFF

HAVE REASON TO BE PROUD

This presentation is dedicated to :

All my friends

Especially those of the MTR

226

227

228

BBC NEWS

19 APRIL 2006