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  • Nov 22, 2014
  • Updated: 5:04am
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MTR lands £1.4b contract to run London Crossrail

Hong Kong company beats three rival bids to operate new railway system for up to 10 years

PUBLISHED : Saturday, 19 July, 2014, 3:42am
UPDATED : Saturday, 19 July, 2014, 3:42am

The MTR Corp has landed a £1.4 billion (HK$18.5 billion) contract to run the Crossrail train line that is being built across London.

It won the deal just two days after announcing that chief executive Jay Walder would step down next month, a year earlier than scheduled, after an internal report criticised him for "poor judgment" over the delayed cross-border railway project.

Walder's departure came at the end of an inquiry by a committee of MTR board members into the two-year delay of the HK$67 billion high-speed railway to Guangzhou.

Transport for London said yesterday the contract would be for eight years with an option to extend to 10 years.

The Crossrail service will connect the town of Reading and Heathrow to the west of London with Shenfield and Abbey Wood in the east, said the local government transport body.

The route will serve 40 stations, including Paddington, and run for 118km through the City and Canary Wharf business districts, as well as the West End theatre and shopping area.

Services will start in phases from 2015 to 2019. It will increase rail transport in London by 10 per cent when fully operational.

"Crossrail will revolutionise east-west transit in the capital, making London an even more attractive place to visit and invest," said London Mayor Boris Johnson. "Many hundreds of additional jobs will be created for local people, with MTR expected to employ around 1,100 staff including almost 400 drivers."

Mike Brown, managing director of London Underground and London Rail, said: "Crossrail will help cut journey times, make it easier for people travelling across the city and create jobs and support growth and regeneration along the route."

The MTR Corp has diversified its business abroad in recent years to avoid relying too much on property-related income. Apart from projects on the mainland, it also runs railway systems in Melbourne and Stockholm.

On the mainland, the MTR is keen to promote its rail-and-property model as a solution to debt-laden railway businesses. The company already has experience working with Transport of London and it also operates and manages the London Overground system.

But analysts doubt if the new project in London will bring a significant boost to earnings as costs are likely to be high.

The procurement process for the Crossrail contract began in 2013, with four companies shortlisted in June last year. The other bidders were European passenger transport providers Arriva, National Express Group and Keolis/Go Ahead.

Additional reporting by Bloomberg

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jayb
well deserved. i have traveled on many subway systems around the world, Hong Kong's MTR is truly the best, at least compared to London, Japan, Singapore.
John Adams
What ON EARTH has the MTR to do with the UK when it cannot even run projects in HK according to budget ?
Zerung
JA,
You have no idea about the construction industry, so goes the case for most of the people in HK.
Lets start by saying that it all started in 2006 (I think), when Donald Tsang let out the following projects (Chronologically).
1. West Island Line
2. South Island Line
3. XRL
4. South Island Line,
etc.
The MTR trained people were already used up in WIL/SIL and by XRL they were limited MTR trained people...
In Short, Construction is a bitxx, cost overrun and cost escalation is very common.
The problem is Politics in HK. I don't think this is going to get solved and we are going to have 6million pocket politicians who is going to make like interesting in the coming years.....
Also run a check for MTR financials....google it. They make a fair amount f money running rail systems in China, Sweden, Australia, UK....So people should not look at a gift horse in the....
rpasea
This is what happens when you privatize a public asset like a rail system. Thanks, Donald. MTRC should have remained a corporation owned by the HK government with a mandate to serve the people of HK with efficient rail service. Full stop.
sipsip1238
How is HK better than Japan?
The Japan system may be complicated, but once you spend 5 mins understanding how the system works, you'd find that the system is very efficiently operated.
What's more, the Japanese are polite enough to move into the carriage (or if they don't, they have people who do the pushing).
It would be quite funny if they re-hire Jay Walder to be their London head.
r6b
Zerung - agreed
Its the dysfunctional politicians that cannot run anything - even for election.
Some how they imagine that if they throw enough temper tantrums that a tunnel boring machine can be made to cut rock at twice its design speed.
 
 
 
 
 

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