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One Belt, One Road

Hong Kong targets ‘Belt and Road’ countries for transport contracts and links

MTR Corporation eyes Kazakhstan over light rail project, while Cathay Pacific wants to fly to Tehran

PUBLISHED : Saturday, 15 October, 2016, 4:33pm
UPDATED : Tuesday, 18 October, 2016, 10:19am

Iran, Kazakhstan and Myanmar are among the countries being circled by Hong Kong’s transport giants in a bid to seize deals along the “One Belt, One Road”.

The South China Morning Post understands the MTR Corporation is eyeing a role in the Kazakhstan capital in a potential deal to train the workforce of Astana’s new light rail system, and Tehran is on the radar as one of the latest Silk Road destinations to land a Cathay Pacific flight.

Meanwhile, the government has signed new air traffic agreements with Malta and Serbia.

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“One Belt, One Road” is an initiative devised by Beijing to revive old land and maritime routes linking vast areas across Eurasia. Around 65 countries on three continents are on the route.

The MTR Corp, benefitting from its experience in running metro operations in Hong Kong, Australia, Britain, Sweden and mainland China, has been tapped by Astana to use its MTR Academy to train Kazakh personnel in rail management and operations.

However, a source said the MTR Corp was unlikely to run the light rail system.

Meetings took place last month in Kazakhstan during the visit of Financial Secretary John Tsang Chun-wah.

The MTR Corp is also seeking a foothold in Myanmar, with executives set to visit next month. However, the corporation is far more cautious about Myanmar as the elected government is still largely fresh and it remains unclear how the political environment will play out.

In another development, Cathay Pacific has told the Post it is staking out potential passenger and air freight opportunities in the Iranian capital. The country has attracted a surge of investment interest following the lifting of international economic sanctions.

“So at the moment we are looking at Iran. Tehran is on the cards,” said airline CEO Ivan Chu Kwok-leung, who hoped Hong Kong and Iran could soon agree a deal on flying rights.

The total number of air traffic agreements signed with countries stands at 66, on top of deals with the mainland, Taiwan and Macau. Under the Basic Law, Hong Kong can negotiate its own air deals.

Chu said they were also looking at other Belt and Road countries including India as well as the Middle East. “I see the Belt and Road initiative – I think it’s a very serious one ... We will see significant developments across these 60 plus countries, some of which we think can be short- to medium-term destinations.”

Citing opportunities from the Belt and Road initiative, an MTR Corp spokesman said it had “a full suite of expertise to offer in the development of railways and hopes to contribute, for example, exploring opportunities to provide consultancy and training services.” It said it was not “at present” involved in the Astana light rail project.

A spokesman for the Transport and Housing Bureau said the government was “keen” to boost the number of deals to expand Hong Kong’s external aviation links.

Alexious Lee, CLSA head of China industrial research and a Belt and Road expert, singled out the MTR Corp as a potential bright spot. “They have a lot of know-how on how to manage commercial projects, commercial businesses that go hand in hand with providing transportation. They are especially useful to players or countries that work with China on advanced infrastructure like subways,” Lee said.

Another investment bank analyst who was not authorised to comment said the MTR Corp was the “closest thing” to Hong Kong having a sovereign wealth fund vehicle, which the government controls through its 75 per cent stake, and which could “really invest outside of Hong Kong and participate in growth.”