HONG KONG, April 11 (Xinhua) -- The Executive Council has approved the
structure and terms of the merger of Hong Kong's two railways under a package
proposal that will benefit the community and balance all stakeholders'
interests, Secretary for the Environment, Transport and Works Sarah Liao said
In a press conference hours after Chief Executive Donald Tsang announced
the news, Liao said the proposed pact, that would see the merger of the
Kowloon-Canton Railway Corporation (KCR) with the Mass Transmit Railway
Corporation Limited (MTR), will bring tremendous benefits to the community.
According to the proposal, there would be fare reductions upon the merger; a
new fare-adjustment mechanism will allow fares to go down as well as up
according to a transparent formula.
"The traveling public will get immediate benefits," Liao stressed. "There
will be an overall fare reduction on the first day for 2.8 million daily
The Secretary for Financial Services and the Treasury Frederick Ma explained
the transaction structure at the press. Under the proposal, the KCR will grant a
service concession to the MTR to use its assets to operate its rail system, for
an initial 50-year period.
The MTR will retain its listing status, and will be the legal entity of the
post-merger corporation. It will be responsible for daily operation and
maintenance of the KCR system, and will pay all operating capital expenses
during the period, Ma said.
As to job security, MTR Chairman Ch'ien said both the MTR and KCR will do
their utmost to take care of their staff, adding that front-line staff will not
be made redundant.
Initially staff will be retained on their original terms of service and
employment, but eventually there would be a unified package of employment terms.
Staff would be consulted, Ch'ien stressed.
As there will be more development opportunities after the merger,
especially on the Mainland, they expect to have 1,300 job vacancies in the first
few years. "The staff in the new corporation can be given training to adapt to
new duties," he said.
There may be as many as 600 or 700 posts to be eliminated due to synergies, he
added, but staff will be given retraining opportunities and everyone will be treated
in a fair and equitable manner.
Chief Executive Donald Tsang said the merger will create a world-class Hong
Kong railway company and consolidate Hong Kong's status as an Asian world city.
"With the fast expanding railway networks in the Mainland, the rail merger is
a timely move for Hong Kong, which will enhance our potential in connecting
with the railway routes on the Mainland. This will generate additional economic
benefit and opportunities for Hong Kong," Tsang said.
He hoped the general public, lawmakers, staff of the two railway
corporations, and minority shareholders of the MTR Corporation would give
support to the proposal as "it is a fair and balance package". Enditem