Tie-up queries left at the station while phase two work starts on Shenzhen line No firm date has been set for the long-awaited merger of MTR Corp and Kowloon-Canton Railway (KCRC) despite assurances from the Secretary for Financial Services and the Treasury Frederick Ma Si-hang that negotiators had agreed on several fundamental issues. Mr Ma declined to comment on when the contentious merger might be finalised. He was attending the ground-breaking ceremony at the work site on the phase two trial section of the Shang Mei Lin Station - one of the 10 stations linked to the Shenzhen Metro Line 4 project. Talk of a merger between KCRC and MTR to make the territory's transport system more efficient has been a contentious issue since 2002. MTR, which was listed in 2000 with the government retaining a majority stake, backed a merger while government-owned KCRC has consistently opposed the plan. Asked if the MTR and KCRC were still divergent over the valuation of their assets, MTR chief executive Chow Chung-kong said there was more at stake in the negotiations than simple valuations. 'It's not simply a matter of how high or low the valuations are, what we are dealing with are the negotiations over the whole financial arrangements. Certainly, valuations are one of our concerns and we are still in talks with the government.' Mr Chow said the merger would create synergies by consolidating managerial and operational resources from both sides, and there would be room for a ticket fare cut once the merger was finalised. The deal to build phase two of the 16km Line 4 project at an estimated cost of six billion yuan was signed in May and the line is expected to be opened in 2009. MTR has spent heavily on the project - the first of its kind in China - through its wholly owned investment arm, MTR Corp (Shenzhen), which has the rights to build, project management, property development and future operation of the new metro line. Line 4 phase one, a 4.5km section between Huanggang and Shaoniangong, began services in December last year. MTR secured a similar deal in Beijing to build a subway as part of the 2008 Olympic Games preparations, but the agreement has not been sweetened with the same rights to property development that is part of the proposed merger. According to the agreement with the Shenzhen municipality, the Shenzhen arm owns the right to develop Long Sheng, Long Tang, Hong Shan and Bai Shi Long stations, covering 80 hectares with an aggregate gross floor area of 2.9 million square metres. The development would take about 10 years to finish, the MTR said. Private developers from the mainland or Hong Kong were welcome to form partnerships with MTR in property projects, Mr Chow said.
