MTR Corporation

The Mass Transit Railway Corporation () was established on 22 September 1972 as a government-owned statutory corporation to build and operate a mass transit railway system to meet Hong Kong's public transport needs. 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 (IPO), the MTRCL was listed on the Hong Kong Stock Exchange on 5 October 2000, although the government is still the majority stakeholder in the MTRCL. Partial privatisation On 11 September 2000, the financial secretary of the Hong Kong Government, Sir Donald Tsang, announced the partial privatisation of MTR Corporation Limited. The offering was for one billion shares, but this was increased to 1.15 billion due to high demand. On 5 October 2000, the company was listed on the Hong Kong Stock Exchange with 600,000 shareholders. In June 2001, MTR was added to the Hang Seng Index. At the time of the IPO, the company was operating with a surplus of HK$360 million (US$46.1 million), which had increased from a surplus of HK$278 million (US$35.6 million) in 1997. The MTR has continued to be one of the few profitable public transport systems in the world. In 2024, according to internal business documents, MTR had a net profit of HK$15.8 billion (US$2 billion). MTR–KCR merger There had been some discussion of merging the Kowloon-Canton Railway Corporation (KCRC), which was also government-owned and the MTRCL to make the territory's transport system more efficient. The MTRCL backed such a merger while the KCRC opposed the plan. In March 2004, the Hong Kong Government officially encouraged the two companies to merge. On 11 April 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 would grant a service concession to the MTRCL to operate the Kowloon–Canton Railway (KCR) system, with an initial period of 50 years. The KCRC would 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 would make a payment of $7.79 billion for the acquisition of property and other related commercial interests. The KCRC's lines were less profitable than those of the MTRC, and the KCRC was less active in property development. It was widely considered that the government's choice was to avoid being criticised for selling assets of the KCRC, which it wholly owned, to MTRCL for an unreasonably low price. Leasing the operation rights of the KCR system to the MTRCL avoided actually selling the KCRC. On 2 December 2007, the Chinese name of the MTRCL was changed to ( "Hong Kong Railway Corporation Limited") after being granted the Service Concession while the English name will remain unchanged. The KCRC is now a holding company of the KCR system, without actual railway operations. The merger was approved by shareholders of the MTRCL on 9 October 2007. The merger is effective for 50 years. This also resulted in changing the system's Chinese name from "" ("Subway") to "" ("Hong Kong Railway"). All adult Octopus Card holders would be the first to benefit from the merger. Student and concessionary Octopus holders would also benefit from the merger by further reducing $0.1 from their 50% off fares. Student Octopus holders would continue to pay the current reduced concessionary fares on the MTR network. Elderly Octopus holders would be introduced to a new fare system which only the elderly can enjoy a $2 fare to anywhere on the MTR network (excluding Airport Express, Light Rail, and Cross-Boundary Stations). Revenue model In July 2021, Liber Research Community, an NGO, produced a report which detailed the history of MTR's revenue model. In it, it reported that the "Rail + Property" development model was originally formed to offset unexpected financial difficulties with creating the original MTR lines, with original estimates that MTR's property would account for approximately 20 per cent of its total revenue. == Senior leadership ==