The new company would be worth $120b and open the way for lower fares
The government confirmed yesterday it wants Hong Kong's rail companies to merge. But it is leaving it to the two operators to arrange the union - with a deadline of August.
The combined rail giant would be a listed company with assets of nearly $120 billion.
Announcing the conclusions of a 20-month study, the transport and finance ministers said the government wanted to see lower train fares through elimination of duplication of resources and better integration of the train systems. They said the two companies should aim to form a transparent fare-setting mechanism, resolve interchange arrangements - especially on the proposed $35.5 billion Sha Tin-Central rail link - and ensure job security for frontline staff.
They called on the MTR Corporation (MTRC) and the Kowloon-Canton Railway Corporation (KCRC) to conclude their merger talks by the end of August to allow the tabling of the merger plan to lawmakers in the 2004/05 legislative year.
Sarah Liao Sau-tung, the Secretary for Environment, Transport and Works, said the planned merger would eliminate duplication of resources and bring economies of scale, which would result in lower fares and more convenience at interchanges.
'There is room to reduce fares as we can see synergies from the merger,' Dr Liao said.