MASS Transit Railway Corp (MTRC) and New World Development will jointly redevelop the railway's headquarters site and depot at Telford Gardens in Kowloon Bay for $2 billion. The joint venture partners propose to replace the existing seven-storey headquarters building with two 16-storey office towers and a four-storey shopping arcade and 200-space car park. This will be tied to a road improvement scheme to alleviate the serious traffic congestion problems dogging the Telford Gardens roundabout. The roundabout and interchange originally had been built to cater for the adjacent housing estates. Today it is one of the busiest junctions in East Kowloon, handling heavy business and industrial traffic that has emerged with the commercial expansion of the Kwun Tong and Kowloon Bay areas. The MTRC said the urgent need to expand the roundabout was one of the prime reasons behind the redevelopment plan. The MTRC said the more than $2 billion to be invested included the cost of road improvements. The redevelopment plan has been submitted to Government for approval. At the joint venture signing ceremony, MTRC chairman Hamish Mathers said: ''The rapid growth in commercial and industrial activities in Kowloon Bay has made the local transport interchange in Telford Gardens one of the major district transport interchanges in East Kowloon. ''In order to cope with the current heavy traffic, it is essential that the existing interchange be expanded.'' Mr Mathers expected the entire project to be completed by late 1996. The office space would total around 51,000 sq m while the retail centre would remain about the size of the existing Telford Shopping Centre at around 32,000 sq m, he said. The MTRC will retain one of the two office towers and two office floors above the shopping arcade for its future headquarters. The retail podium, remaining office tower and car park would be either rented out or sold off, whichever at the time was most appropriate, Mr Mathers said. New World chairman Cheng Yu-tung said he was confident this would be a very successful joint venture, a view shared by analysts because of the high demand for office and retail space in the area and the site's proximity to the MTR.