Hong Kong MTR

MTR management to face pay cuts over rail disruptions

Transport chief says serious rail incidents will cut into the salaries of senior staff in future

PUBLISHED : Thursday, 15 May, 2014, 3:59am
UPDATED : Thursday, 15 May, 2014, 8:02am

The threat of pay cuts will hang over the MTR's senior management as a penalty for serious service disruptions, the transport minister announced yesterday - as it emerged that he had earlier tendered his resignation at the height of anger over revelations about a two-year delay in the construction of a high-speed railway to Guangzhou.

This month's offer to quit from Secretary for Transport and Housing Professor Anthony Cheung Bing-leung was rejected by Chief Executive Leung Chun-ying, a person familiar with the situation said.

Cheung said yesterday that the MTR Corporation would come down hard on future disruptions to train services by linking part of high-ranking employees' pay to serious incidents.

"The [MTR board] has … decided to include the occurrence of serious service disruptions as a consideration in the payment of performance-based remuneration to the corporation's senior management staff in future," he said.

The board members themselves are already subject to a performance factor in their pay.

Last year, HK$5 million of the HK$13 million MTR chief executive Jay Walder received was connected to his work performance.

Cheung did not specify how much service disruptions would affect wages, or who were considered "senior management". The government has fined the railway giant HK$40.5 million for disruptions in the last two years lasting more than 30 minutes. The money translates into a 10 per cent discount passengers get for every second trip made in a day, under an arrangement between the MTR and the government.

Services were subject to delays again in recent months.

A faulty support wire held up trains for five hours on the Tseung Kwan O line in December. Then in February, two incidents of defective electrical insulators on the East Rail Line caused disruptions of up to four hours.

Last month, the same line came to a halt for 36 minutes after the train tracking system at the central control centre stopped working. The next day, the backup monitoring system also broke down, with service suspended for seven minutes. All three incidents were linked to overhead cables. Cheung has said the MTR expects to complete its review of the system in August.

The MTR did not answer questions on when it made the decision on pay penalties, or how disruptions would be measured.

A remuneration committee under the board would consider, review and recommend to board members the MTR's pay policy, a spokesman said.

Lawmaker Wu Chi-wai, of the Democratic Party, said that if salary cuts did happen, the company should reveal the seniority and department of the employees involved, even if no names were disclosed. The penalty sums should also be published in its annual report, he said.

"The current penalty mechanism fines the MTR," Wu said. "The money is from the public purse [as the government holds a 76 per cent stake]."

Michael Tien Puk-sun, former chairman of the Kowloon- Canton Railway Corporation, said the current pay system considered mainly financial factors and general operating performance, giving little weight to delays. He said disruption-linked wage cuts should apply only to managers involved in operations.