A marriage of convenience
There has been much public emotion, some unpleasant family gossip, and not a little hard-headed bargaining. At last, the young and brash MTR Corporation and the staid and indebted Kowloon-Canton Railway Corporation are walking down the aisle. The government is poised to ask the congregation whether there is any just cause why the marriage should not take place.
Those present include legislators, the staff and management of the two corporations, the government, public shareholders in the MTR Corp, rival transport companies, and (in the background) the men and women who use the two new partners' services. It is all rather like a Jane Austen novel.
The improvident have predictably focused first on the scope for fare reduction. As matchmaker, the government has done everything possible to make meaningful concessions, especially to long-distance passengers and the elderly. The new fare-setting mechanism, which is related to consumer prices, is, in the longer term, an even bigger giveaway. Indeed, it is arguable that the government has gone too far, in that the happy couple may have difficulties making ends meet if their capital costs rise. Given populist sentiment, however, the compromise reached is an astute one.
Price is closely related to quality of service. Despite recent difficulties at the KCRC, no informed guest at the reception is in doubt that the standards of engineering, safety and reliability of both partners are already exemplary. But the unseemly competition for land grants, the lack of co-ordination between management teams, and the absurdity of parallel planning for new stations and tracks are a growing source of concern. The value of 'synergy' is high in dollar terms, and in external benefits, it is simple common sense.
The decision to review the Sha Tin-Central link, which was only comprehensible in its present form in the context of two prima donnas competing rather than co-operating, is wise, as are reassurances from both corporations about increased job opportunities.
Faced with nothing else to criticise, some in the legislature have been making bizarre statements about public shareholders in the MTR Corp being given too good a deal for their purchase of the KCRC's property portfolio. Perhaps they might explain whether they themselves would have accepted less than the fairly assessed market value? Or perhaps they think the taxpayer, as owner of the KCRC, will not benefit from an upfront dowry of $4.25 billion, subsequent annual payments of $750 million, plus a share of the KCRC's own railway revenue after the fourth anniversary?
Of course, MTR Corp share prices have risen now that the government - acting more successfully than Austen's Emma - has resolved years of uncertainty and crafted a win-win deal for both corporations. For its part, the KCRC retains ownership of its rail assets, so there has been no sell-off of the family silver. All in all, not too shabby for an alleged shotgun marriage. But future generations will judge the wisdom of the union from a broader perspective.
It is an old engineering truism that a growing city cannot have too much transport infrastructure. But an economically mature population also demands accessibility, environmental sensitivity and comfort. We can no longer afford the costs of basing our transport system around the unsustainable growth of superhighways in a limited urban area. We have already paid a high price in pollution, congestion, reclamation and loss of economic opportunity.
With the merger between the MTR Corp and the KCRC, the government has taken a real step towards making Hong Kong not just the much-touted international city, but a better place for us all to live, work and travel in. Let the naysayers forever hold their peace.
Andrew Wells is a freelance writer and former senior civil servant
