French firm completes takeover of Hong Kong Tramways
The French company that bought a 50 per cent stake in the century-old Hong Kong Tramways last year has exercised its right to buy the remainder from Wharf Holdings.
Veolia Transport China, a subsidiary of Veolia Environment, and Wharf Transport did not disclose the price. Veolia first bought half the company and took over the running of the tram system last April, saying at the time that the price was 'far less than Euro100 million [HK$1.06 billion]'.
Daniel Cukierman, Veolia Transport China chief executive, said yesterday: 'From our very first approach to Wharf Transport, it has always been our intention to own the tram business fully. After nearly one year of management of the company, we are confident and ready to execute the option.'
He said the company was conscious that the tram was a cherished part of Hong Kong's heritage, and that the firm would take this into account while improving the network.
Veolia operates transport systems around the world, including tramways in 10 European countries.
Andrew Cheng Kar-foo, deputy chairman of the Legislative Council's transport panel, said: 'There has been no change in the operation of Hong Kong Tramways over the past year since Veolia bought a stake, so I do not think the new operator will ruin the character of our trams in the future. Veolia is a well-known transport operator. I hope they can improve the service of Hong Kong Tramways.'
Veolia has already started modernising the trams and the system and has plans to expand the 163-tram fleet to offer a greater frequency of service.
Last year it began testing a new braking and cable system, trying out new maintenance methods on rail tracks to reduce noise and working with the government on ways to revamp its routes to improve the trams' speed, frequency and efficiency.
Managing director Bruno Charrade said earlier this month: 'We hope passengers will not ride on trams simply because we are the cheapest but also because of our service quality.'
For Wharf, the tram company has not been as profitable a business when compared with its property investment, telecommunications and logistics arms.
Hong Kong Tramways made a profit of around HK$2 million a year between 1996 and 2006, then earnings surged to more than HK$10 million in 2007 and more than HK$30 million in 2008.
Shares of Wharf rose 2.12 per cent to close at HK$40.90 yesterday.