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Mainland beckons if rival wins Sha Tin rail link

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The MTR Corp is facing a challenging time, with last year's results highlighting the need to expand its non-core revenues.

The 5.3 per cent year on year rise in full-year net profit could be attributed basically to impressive cost savings.

Revenue from train services on the four urban lines and the Airport Express managed to grow marginally on the back of the extra 10 HK cent surcharge last year and longer trips by passengers, but this year's outlook is hazy.

A key question is whether the longer trips will continue and whether the corporation will be able to offset the potential loss of HK$131 million in fare revenue as a result of its decision to shelve a 2.3 per cent fare rise.

An even bigger looming challenge, albeit in the longer run, is how it can grow its subway services if it loses its bid for the HK$30 billion Sha Tin to Central rail link.

The link, between Tai Wai, Hunghom and Central, is an important part of the SAR's future railway network, but the Government is believed to be strongly favouring the corporation's rival, Kowloon-Canton Railway Corp.

If it goes that way, a major threat to the MTR Corp will be soaring competition. It is understood that a response to a losing bid might see the MTR Corp head to the mainland to build and operate railways.

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