MTR mixed messages on high-speed rail profitability are off the rails
It is quite astonishing to hear that the Guangzhou-Shenzhen-Hong Kong Express Rail Link will be profitable from day one. Shareholder activist David Webb called such optimism from the transport authorities “deceptive”. I hope a competent accounting firm will analyse MTR’s claims thoroughly.
The government expects the express rail link to earn HK$671 million this year, while operating costs are estimated to be HK$472 million. Officials have not provided any basis for – or explained how they arrived at – such a conclusion.
Again, they have presented revised projected daily passenger figures, at 28,900 fewer nearly 27 per cent less than previously estimated. I don’t think anyone from the public would be up to analysing or challenging this, as this is difficult and time-consuming. The public has no choice but to believe the MTR.
I’m not a mathematician, but I am very confident that a compound interest rate of 3-4 per cent or even 2.5 per cent on the sky-high construction cost of HK$84.4 billion, originally estimated to cost HK$65 billion, was not calculated properly while fixing fares. Also I’m afraid that profits from the Hong Kong MTR, a cash cow, may be ploughed into the high-speed rail to show profitability.
Then, surprisingly, the transport chief said that fares may be cut if seat occupancy is low and to attract passengers during off-peak hours (“Fares for high-speed rail link can be discounted to woo passengers, transport chief Frank Chan says”, August 25). All this is very confusing. The mixed messages on less/more profitability, and low passenger turnout and the need to attract them with off-peak discounts, add to the misleading mess.
A. L. Nanik, Tsim Sha Tsui