Troubled Ngong Ping 360 sees revenue loss of HK$80m

PUBLISHED : Wednesday, 08 August, 2007, 12:00am
UPDATED : Wednesday, 08 August, 2007, 12:00am

Ngong Ping 360 cable car has been costing the MTR Corporation HK$7 million a month in maintenance, and the losses will continue at least until mid-September when the corporation finishes a probe into the incident that led to its closure two months ago.

The corporation also suffered an HK$80 million loss of revenue from the Lantau attraction over the first half of this year.

Services were suspended on June 12 after an empty cabin fell to the ground during testing.

But MTRC chief executive officer Chow Chung-kong said the financial impact on the corporation was small as the cable car operation made up only a fraction of its revenue.

'The impact is comparatively small. [Ngong Ping 360] composes just 1.5 per cent of our total assets,' he said yesterday after the release of the company's interim earnings.

The MTRC reported a profit of HK$206 million from railway and related businesses in the first six months this year, almost six times that of the same period last year.

The increase was driven by a 2.6 per cent rise in passenger numbers to 429.3 million. The heavy passenger traffic in turn boosted advertising revenue by 3.8 per cent and station retail revenue by 9.5 per cent.

Mr Chow said a fare reduction after the merger of the MTR and KCR rail operations that is expected to cost the future merged company HK$600 million a year would not eat into the corporation's profit.

'We will become a much bigger network after the merger, and we expect the number of passengers to surge by a large margin,' he said.

Mr Chow said railway would make up 40 per cent of the public transport market after the merger. The company's prospects were bright in terms of the few railway projects that would be started in the next few years and also the property sites and development rights obtained by MTRC in the merger deal.

The legal procedures for the merger were completed last month and the deal is now subject to the approval of MTRC's minority shareholders. The corporation expects the deal to be completed this year.

Mr Chow said although the MTR had given up its fare autonomy, it would not affect shareholders' interests. 'I can assure you the possibility of us applying for a fare increase would be no less than what we were allowed to do in the past 23 years,' he said.