Hong Kong MTR Bids for UK Rail

[AliBabaIncorporated]

I wonder how well the MTR will do in the UK. After all, given the UK's crime rate and low density, building property developments on top of railway stations isn't going to be anywhere near as profitable as in Hong Kong. Even if they get lots of land by direct grant the way they do from their connections in Hong Kong. (The MTR Corporation derives most of its HK income from property sales. The properties can sell for such good prices because they're in convenient locations right on top of train stations. They use the property revenue to subsidize train services, which would be money-losing, or cost 3x as much --- comparable to Tokyo prices --- if spun off and operated independently. It's a sort of virtuous cycle.)

Personally, I think they should stick to their core competency of managing urban subway/light rail services, such as the projects it's already pursuing in Shenzhen (Line 4 Meilin to Huanggang section) and Shanghai.

Minor correction to the article: as far as I know, the mainland government does not hold any stake in MTRC, let alone a majority one. So calling them "Chinese state-controlled" is incorrect.

Chinese bid for UK rail franchises
http://www.guardian.co.uk/business/s...358921,00.html
Overseas travel Hong Kong firm, with 99% punctuality record, wants to run south east trains

Andrew Clark, transport correspondent
Thursday November 25, 2004
The Guardian

A Chinese state-controlled rail operator has made a surprise entry into Britain's rail industry, with ambitious plans to bid for franchises covering mainline rail services throughout London and the home counties.

Hong Kong's Mass Transit Railway Corporation (MTR) has struck a deal with the inter-city firm GNER to table a joint bid for a new franchise covering all of Kent.

With a punctuality record of 99%, MTR claims to be the world's most reliable train company. It is listed on the Hong Kong stock market but 77% of its shares are held by Hong Kong's government.

MTR's operations director, Phil Gaffney, said if it were successful in Kent, it could bid for franchises covering Thameslink, Silverlink and South West Trains.

Mr Gaffney said MTR's plans would include parachuting Hong Kong executives into roles at British train operations. He said the firm would commit itself to a substantial improvement in performance.

"We've had to work very hard to get an international reputation," said Mr Gaffney. "There's no way we're going to have that reputation destroyed."

The so-called Integrated Kent rail franchise will comprise all services operated by South Eastern Trains, plus high-speed services on the channel tunnel rail link which opens in 2007. GNER and MTR face competition for the franchise from three other shortlisted bidders: FirstGroup, Denmark's DSB and a joint venture between Go-Ahead and France's Keolis.

GNER's chief executive, Christopher Garnett, said its expertise in long-distance services would complement MTR's knowledge of intensive commuter operations. He said: "Kent's commuters have suffered for too long."
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South Eastern Trains has been operated by the government since the network's French operator, Connex, was sacked for poor financial controls by the Strategic Rail Authority (SRA) a year ago.

Unions say its performance has improved under public ownership. Some 117 MPs have signed an early day motion calling for the refranchising of the service to be halted. More than 3,500 members of the public have sent postcards to the transport secretary, Alistair Darling, calling for it to remain in government hands.

It emerged yesterday that the timetable for the potentially unpopular refranchising has slipped until the autumn - after a likely general election in the spring.

Keith Norman, acting general secretary of the train drivers' union Aslef, said any private bids were unwelcome: "To hand the running of this vital public service back to the private sector will be seen as a victory for bankers and big business over the interests of passengers and the public."

The SRA said it would need to approve MTR's tie-up with GNER. But a spokesman said: "We always welcome possible new entrants to the UK market."

MTR could face a culture shock. In Hong Kong, there is little overcrowding because nearly everybody stands - there are 48 seats in carriages for 300 people. While South Eastern Trains spent £500,000 cleaning graffiti off its trains last year, MTR said vandalism in China was virtually unknown. Mr Gaffney said in Asian cultures, "people value property, in particular other people's property, too much to destroy it".

If it is successful, MTR will sit alongside other foreign players, the Netherlands' Ned Railways - which runs services in Merseyside and is soon to take on trains covering much of northern England - and the French firm Keolis, which is co-operator of Southern Trains.

Roger Ford, technical editor of Modern Railways magazine, said it was foolish to expect overseas operators to work magic: "MTR is a very good operation in Hong Kong. But they have a brand new system which was built by the Brits. They have brand new trains and a brand new track which has been steadily upgraded and improved. Compare that with Kent and what do they know?"

Networking: Three vandals in 25 years

· Hong Kong's rail network comprises 80km of track, 49 stations and carries 2.24 million passengers a day. Kent's railways cover 773km of track, 178 stations and carry 400,000 people a day.

· Commuter railways around London suffer from chronic problems with vandalism and graffiti. In Hong Kong, graffiti is unknown and the rail operator can only recall three instances of vandalism since its operations began in 1979.

· Hong Kong's MTR authority made a profit of HK$4.4bn (£304m) last year and received no subsidy. South Eastern Trains was supported by £49.2m of government cash.

· Punctuality on Hong Kong's railways slipped slightly last year to 98.9%. South Eastern Trains' punctuality was 79%, falling to 75% during rush hours.

· Hong Kong's MTR network is 77% owned by the city's government and is ultimately answerable to the city's chief executive, Tung Chee Hwa. South Eastern Trains has been under the control of the British government since Veolia Environnement's Connex subsidiary was sacked for poor financial management a year ago.

[SunWuKong]

Chinese-state controlled? that mofo is a publicly traded company. probably the only publicly traded subway company in the world.

anyway, on the one hand it surprises me that they're not just going to concentrate on the Pearl Delta Region because there's a lot of work that needs to be done there in terms of infrastructure, especially now that there're plans to actually include some of the surrounding provinces to be officially considered as part of the Pearl Delta Region in order to compete with the Yangtze Delta Region. but on the other hand, it doesn't surprise me that they would "go West" like a lot of rich companies do, because they have been doing pretty well for themselves. the MTR is the most used subway system in the world.