Hong Kong MTR

Jay Walder: the man who set in train the high-speed rail link fiasco

MTR boss Jay Walder is known both for his innovative policies and autocratic leadership style

PUBLISHED : Monday, 12 May, 2014, 4:45am
UPDATED : Monday, 12 May, 2014, 4:45am

When Jay Walder, the American chief executive of the MTR Corporation, vacates his post in summer next year, he would have presided over the Hong Kong railway system's most ambitious expansion in a decade.

Walder, 55, will leave the MTR Corp when his contract expires in August 2015. The father of three says his departure is solely because of family reasons. It has nothing to do with the recent barrage of public criticism and calls for him to quit over the two-year construction delay and costly budget overruns in the city's high-speed cross-border rail link project, he says.

The delay of the opening of the 26km Guangzhou-Shenzhen-Hong Kong Express Rail Link to 2017 has raised questions about the MTR's world-class reputation for reliability.

Housing and Transport Secretary Professor Anthony Cheung Bing-leung said he was going to warn legislators in November about the possibility of a delay, but was persuaded not to by Walder. The two-year delay was announced in April and Cheung's comments last week have led to claims of a cover-up.

The public was also earlier angered by "avoidable" faults with the railway system. In February, faulty insulators on overhead wires caused seven hours of delays over two days on the East Rail Line. In December, passengers on the Tseung Kwan O Line were forced to walk on the railway tracks through the tunnel back to the station when a train broke down after an overhead power cable came loose. The fault caused the network to be shut down for five hours.

The blame fell on Walder, as chief of the MTR Corp. But this was not the first time he has been faced with public anger over transport matters.

In his previous job as head of the Metropolitan Transportation Authority in New York between 2009 and 2011, he was also a lightning rod for commuters' anger after they were hit with double-digit fare increases and fewer bus and train services that led to overcrowded carriages.

Walder - who was then paid just a third of his current HK$13 million annual salary - had the dirty job of slashing transport services and laying off staff to balance the MTA's budget, which was suffering a near-US$1 billion deficit, after New York state officials bungled tax forecasts that led to a funding shortage for public transport, said New York's former mayor Michael Bloomberg.

But with fewer metro staff, the railway network saw robbery rates skyrocket 40 per cent, a local newspaper reported at the time.

Still, Walder, in his short two years in New York, is credited with instituting a modernisation programme that allowed the MTA to embrace new technology, including gateless tolls on road bridges and countdown clocks with real-time train information in metro stations.

"He kept the transport system running safely by implementing strict budgetary controls … [But these] led to tension with union leadership," the MTR Corp said in a statement.

As a result of some of his MTA policies, Walder became - and remains to this day - public enemy No1 to New York's Transport Workers Union.

Union president John Samuelsen describes Walder's management style as "autocratic". Meetings with him were like dealing with a "spoilt brat", and when Walder did not get his way, he would have "hissy fits" and "flail his arms like a wild man", he says.

Samuelsen is more supportive of the incumbent MTA chief Thomas Prendergast, despite "never seeing eye-to-eye" with him.

He says Prendergast is an experienced operations man and a good negotiator who understands union issues, all of which Walder is not.

But former New York mayor, Bloomberg, begs to differ. Walder is a "first-rate leader with big ideas" and a "world-class professional that any city would be lucky to have", he says.

As No 2 at Transport for London a few years before his MTA job, Walder had already made a name for himself as finance chief, instituting the hugely successful Oyster electronic card payment system - much like Hong Kong's Octopus card - that boosted revenue and drastically reduced the incidences of fraud.

Then, Walder looked primed to become the company's chief executive. But he was overlooked in 2006, and he left for the private sector soon after.

A former Transport for London colleague once told a British journalist: "I would love to have Jay implement a project for me, but I would not like to see him run an organisation."

In Hong Kong, at the MTR Corp, Walder appears to have failed to win the hearts of his staff.

MTR Staff General Association chairman Wong Yuen-wood says there exists a barrier between the MTR staff and their chief.

"He met us [staff] once when he had just taken over the job, and promised us that there would be no staff cuts during his tenure," he says. "But that was the only time he met the staff."

He added that another meeting would likely be arranged soon, given the recent controversy over the high-speed rail link.

Wong says that while Walder has so far kept his promise not to lay off staff, he is unlike his predecessor Chow Chung-kong, who would initiate meetings with staff every now and then.

Many MTR employees are growing increasingly frustrated as they feel Walder has failed to get the message across to the public that the MTR service has been improving because of their hard work, he says.

"In numbers, we have been told that the service has improved with, say, fewer delays of more than five minutes," Wong says.

"But the public has not been told about that, and staff morale has taken a blow because many feel they are getting only more blame despite all their efforts."

On what he expects of Walder's successor, Wong says the next railway chief should work harder to foster a closer relationship with staff and to understand the local culture.

"Promoting someone within the MTR would be the best option … We do have such talent … after running the rail system for more than 30 years," he says.

Additional reporting by Samuel Chan


Jay Walder

Age 55

Married with three children

Harpur College at Binghamton University, New York
Master's in Public Policy from the John F. Kennedy School of Government at Harvard University

1983-95 Various finance roles, Metropolitan Transportation Authority, New York
1995-2000 Lecturer, John F. Kennedy School of Government at Harvard University
2000-07 Finance and planning director, Transport for London
2007-09 Partner, McKinsey and Company
2009-11 Chairman and chief executive, Metropolitan Transportation Authority, New York
2012-present Chief executive of the MTR Corporation, Hong Kong