MTR directors may have pay cut for delays, Anthony Cheung warns

Directors exploring the possibility of reflecting in their salaries the impact of recent major disruptions to railway network, says minister

PUBLISHED : Sunday, 23 March, 2014, 4:47am
UPDATED : Sunday, 23 March, 2014, 4:47am

The MTR Corporation is considering linking its directors' pay to the company's performance after a string of rail system failures and delays.

Secretary for Transport and Housing Professor Anthony Cheung Bing-leung said yesterday the government was concerned about the recent incidents and an MTR committee was looking into the feasibility of the idea.

The MTR will be stung with a HK$27.5 million fine for 147 disruptions last year. That will be applied this year, meaning that under the fare adjustment mechanism, passengers will save 10 per cent on every second trip.

Fare increases will also be finalised this week, when the government releases its transport salary index. Adjustments are calculated annually according to inflation and wage changes in the transport sector. It is expected passengers will pay an extra 3.5 per cent this year.

"The MTR board is exploring whether it's possible to reflect major disruptions on the railway network in directors' salaries," Cheung said. "It's unfortunate that there have been more frequent disruptions recently."

Cheung added that part of MTR directors' salaries was already linked to service performance, but said disruptions could also be included as a factor.

"Both the MTR and the government think it is important that management staff are held responsible," he said.

Cheung said the MTR and the Electrical and Mechanical Services Department were working on reviews of the railway's overhead cable system after defective electrical insulators caused three hours of delays on the East Rail Line last month. They are investigating whether the problem is systemic.

Those disruptions came 10 days after an electrical fault on the same line forced its partial closure, causing nearly four hours of chaos. In January, a light-rail train broke down in Yuen Long after a mechanical failure, shutting down eight stations for almost three hours. In December, a power failure halted services on the Tseung Kwan O Line for almost five hours.

The MTR raised fares 2.7 per cent last year. Cheung said the fare adjustment mechanism struck the right balance between recognising changes in operating costs and wages, and affordability for passengers.

The MTR recorded HK$8.6 billion of underlying profit last year. Under a new profit-sharing scheme it will give out HK$125 million in second-trip concessions. The formula was adjusted to lessen the impact of fare rises, and a profit-sharing system was introduced in which the railway has to offer certain concessions when its profit exceeds HK$5 billion.

Cheung also said the government had received a consultant's report on developing more railway lines, which it would release as soon as possible. He said he was concerned about overcrowding, and would ask the MTR to add more trains on lines that had the signalling capacity.