It was just after midnight on December 12, and tired railway workers at Ngau Tau Kok MTR station in east Kowloon were preparing to go home at the end of a long day. Hong Kong’s rail network had enjoyed weeks of relative calm, after months of violence and vandalism as anti-government protests spilled into metro stations. Suddenly, the peace was shattered. Black-clad rioters hurled petrol bombs inside Ngau Tau Kok station at about 1am, the MTR Corporation said, damaging escalators, ticket machines and a Maxim’s Cakes shop. The station was evacuated and closed about 30 minutes early. It was the latest in a series of attacks by anti-government radicals, piling on woes in a year when the rail giant should have been celebrating its 40th anniversary. The MTR Corp began 2019 hoping to put a scandalous 2018 behind it, after a series of management crises and construction problems resulted in delays and budget overruns for the Sha Tin-Central rail link, the city’s most expensive rail project at HK$99.1 billion. Heads rolled, and this year Rex Auyeung Pak-kuen and Jacob Kam Chak-pui took over as chairman and CEO respectively. But 2019 has turned out pretty awfully for the rail operator, which serves 5 million passengers a day and once boasted a near-perfect punctuality rate of 99.9 per cent. “All the mishaps such as its management blunders and handling of the social unrest have taken a toll on the long-standing reputation of the MTR,” said newly elected Kwai Tsing district councillor Leung Chi-shing, a train driver on the Tsuen Wan line. The year began with revelations in January about unauthorised changes and missing documents that raised major safety concerns over the Sha Tin-Central link, on top of earlier allegations of a cover-up of shoddy construction on the project. Chief Executive Carrie Lam Cheng Yuet-ngor ordered an ongoing commission of inquiry to extend its investigation to cover the new allegations. In March, images of smashed doors, twisted steel poles and shattered glass shocked Hong Kong as news broke of a train crash, the first on the MTR system. Two vehicles, carrying no passengers, collided during an overnight trial run of a new HK$3.3 billion (US$420.4 million) signalling system meant for seven rail lines. One carriage was derailed, and both drivers had to be sent to hospital. The accident caused a two-day breakdown in service on one line between Admiralty and Central, two major stations on Hong Kong Island. In July, after months of investigation, the MTR blamed its software contractor, French multinational Thales, for the crash, saying it implemented a software change before any site or simulation tests. Actually the MTR is a real estate firm with a side business as a transport operator. Its profits mainly derive from its property business Lawmaker Michael Tien But the government slammed the rail company for being too reliant on its contractor, and disregarding two warnings from an independent safety assessor about compliance problems in Thales’ software development process. Worse was yet to come. When anti-government protests first broke out in June against the now-withdrawn extradition bill, the MTR Corp was mostly not involved. In fact, it increased services when major protests happened, to help people get home. In August, however, it came under scathing attack by mainland Chinese state media accusing the company of facilitating mob action by laying on extra trains. It then began shutting stations near protests and curtailing services. Protesters quickly labelled it the “Communist Party Rail” and it became a key target of radicals’ destructive fury, for bowing to pressure from Beijing and, as they saw it, colluding with the police. In September, the city’s most serious rail accident in more than two decades occurred near Hung Hom station. Three carriages derailed as a 12-car train carrying more than 500 passengers was entering the station. Five passengers were sent to hospital. The company conducted an investigation involving overseas experts, but has yet to reveal its findings. The following month, stations were targeted anew by protesters. When the government announced a ban on masks on October 5, rampaging mobs attacked stations, causing extensive damage. The entire rail network was shut down for the first time in its 40-year history. Through most of October and November, the rail operator closed stations early to get damaged facilities fixed, though critics accused it of imposing a de facto curfew on the city. As of November 24, radical protesters had caused extensive damage to 85 of 94 MTR stations, and 62 of 68 Light Rail stops. Turnstiles, ticketing machines, surveillance cameras, lifts, escalators and rolling shutters were damaged. Some 54 heavy railway trains and 16 Light Rail vehicles were damaged. Passenger numbers are also down since July, falling by 27.4 per cent in October and 27.2 per cent in November compared with the same months last year. MTR Corporation reveals it will incur HK$1.6 billion in costs from protests Earlier this month, the MTR announced more bad news – the opening of the cross-harbour section of the Sha Tin-Central link would be further delayed until the first quarter of 2022, from the end of 2021. It blamed vandalism of the East Rail line by radical protesters for hindering work. It also expected a significant decline in profits this year, saying it would incur HK$1.6 billion in costs as a result of lower revenue from train services, spending HK$500 million to repair damaged facilities, incurring extra expenses to bolster security, and giving concessions to its retail tenants. Aside from protest-related losses, MTR’s 2019 results have also been hurt by HK$2.43 billion in provisions related to the Sha Tin-Central link construction scandal, and a joint venture in Britain called First MTR South Western Trains. Questions are being asked about the future of the company, which has reaped a net profit exceeding HK$10 billion in each of the past five financial years. Quentin Cheng Hin-kei, spokesman for commuter concern group Public Transport Research Team, said: “The MTR has given the public the impression that it toes the line of the government instead of serving the public.” He said the early station closures had effectively driven away passengers, who had turned to buses and ferries instead. “The closure of stations and reduced number of customers has also had an impact on the rental income of its shopping malls,” he said. He said now that protesters have linked the MTR with the government, the rail company can expect more trouble while the political unrest continues. “The protesters will continue to vent their anger on the rail firm,” he said. MTR risks losing future contracts in Australia over Sydney metro chaos Cheng added the MTR had also failed to restore public confidence in its reliability, given the cost overruns and delays for the Sha Tin-Central link, and serious incidents such as the train crash and derailment. “I feel pessimistic about the MTR,” he said. “The management revamp is just old wine in new bottles. The MTR has become complacent with its monopoly of the rail service. It just keeps blaming other parties without improving itself.” He said the government should either sell its 75 per cent stake in the corporation to investors and give it complete autonomy, or buy back the remaining 25 per cent and take full control. “The MTR is a monster. It is only partially privatised but controlled by the government,” he said. “Who is it accountable to – the government or its customers?” However, lawmaker Michael Tien Puk-sun, former chairman of the Kowloon-Canton Railway Corporation (KCRC), remained positive about the MTR’s long-term prospects, given the support it receives from the government. “The protests and the Sha Tin-Central link construction scandal are just single incidents that won’t happen every year,” he said. “Actually the MTR is a real estate firm with a side business as a transport operator. Its profits mainly derive from its property business.” Tien expected the government to grant the MTR Corp development rights instead of operation rights on future rail projects such as the Tuen Mun South extension, guaranteeing long-term profitability. Jason Chan Wai-chung, head of research at uSMART Securities, said the protests were only a minor setback for the MTR as commuters still relied on its rail service as their main mode of transport. “The MTR holds the monopoly of the city’s railway services. Despite its tarnished image, there won’t be a big impact on its patronage next year. The recent slowdown in protests and its resumption of normal services will help restoring its profits,” he said. However, he agreed that recent mishaps might reflect governance problems. “The safety incidents may have something to do with ageing systems and facilities. The MTR is faced with the challenge of maintaining the quality of its maintenance of facilities,” he said. MTR Corp blames vandalism for delay on cross-harbour section of rail link Chan said that to restore public confidence over the MTR’s network safety, the government should enhance its supervision of the railway operator. District councillor-elect Leung agreed with Cheng’s idea of turning the MTR into a fully privatised firm or a fully government-owned organisation. “Semi-privatisation has put the MTR in a very awkward situation as it can’t have a free hand to run its business,” he said. Tam Kin-chiu, vice-chairman of the pro-Beijing Hong Kong Federation of Railway Trade Unions, argued that protest-related vandalism had affected the MTR’s service, but not its reputation. But he felt the MTR management should improve its communication with its own staff. “The occurrence of mishaps shows a real need for the company to hold regular talks with the frontline staff, to learn their difficulties and concerns,” he said.