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Moving Millions

Moving Millions: The Commercial Success and Political Controversies of Hong Kong's Railway

Rikkie Yeung
Copyright Date: 2008
Pages: 332
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  • Book Info
    Moving Millions
    Book Description:

    With the "merger" of the MTRC and the KCRC in 2007, the history of Hong Kong's railways turned a new page. The two government-owned corporations were exceptionally profitable. Yet, this commercially successful railway model was not without social costs and political controversies.   Moving Millions critically examines the governance history of the MTRC and the KCRC over the past three decades, and sheds light on the challenges to Hong Kong's railway after the "merger". The author discusses complex relationships between railway management, government policy and politics. Critical issues are analysed, including corporate governance; railway-property development; funding and managing new projects; mismanagement and controversies; public accountability; and passenger interest in fares, choice and convenience. The book compares how differently the MTRC and the KCRC dealt with the government, civil society, the market, and with each other to achieve commercial objectives and tackle public interests issues in a post-industrial society, where public expectations are rising despite constraints in democracy.

    eISBN: 978-988-8052-57-8
    Subjects: Transportation Studies

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-viii)
  4. Acknowledgements
    (pp. ix-x)
  5. A Note on Referencing, Tables and Endnotes
    (pp. xi-xii)
  6. List of Tables and Figures
    (pp. xiii-xiv)
  7. Abbreviations
    (pp. xv-xvi)
  8. Part I Political and Policy Context

    • 1 Railways as Part of the Hong Kong Miracle
      (pp. 3-14)

      Railways are part of the Hong Kong miracle.¹ The Mass Transit Railway Corporation Limited (MTRC) and the Kowloon-Canton Railway Corporation (KCRC) have been much envied by their international counterparts. These two basically government-owned enterprises are among the few railways in the world that have made money, and indeed big profits, for many years. The MTRC and the KCRC have matched world-class service standards in serving over three million passengers everyday in a densely populated cosmopolitan city. The past safety records of the two railways were reasonably good with relatively few fatal accidents. They have enjoyed a high degree of operational...

    • 2 Serving a Community at Change
      (pp. 15-38)

      The MTRC and the KCRC serve a cosmopolitan community that has been transformed from a small British colony and trading port into the richest and most developed Chinese city under ‘One Country, Two Systems’. Hong Kong’s struggle for socio-economical modernisation and political transformation after the mid-1970s is a fascinating history. As macro-background, this chapter aims modestly to survey the broad political and socio-economic changes in Hong Kong relevant to the corporate history of the MTRC and the KCRC over the last three decades, in particular before and after 1997. Of particular significance are the interrelationships between the government, public bodies...

    • 3 Hong Kong’s Railways versus International Experience
      (pp. 39-64)

      Hong Kong people are heavily reliant on public transport because of the dense population, geographical concentration of economic activities, and government policies. By international standards, Hong Kong’s public transport and railway systems are highly efficient. The railways carry more than 3.5 million of passengers every day and make huge profits. This chapter explains the government’s transport policy framework and railway governance structure behind Hong Kong’s efficient and profitable railways. The government executive dominates public transport policy-making in line with the overall mode of Hong Kong governance as the previous chapter has explained. Until the latest merger reform, the Hong Kong...

  9. Part II Contrast in Corporate Governance

    • 4 Pioneer MTRC versus KCRC Bureaucracy
      (pp. 67-92)

      Part II of the book contrasts the organisational history of the MTRC and the KCRC with a focus on their corporate governance arrangements and issues. The KCRC ran Hong Kong’s oldest railway and had a much longer organisation history but had a shorter history as a corporation than the MTRC. The MTRC was established as a statutory corporation in 1975 whereas the KCRC was restructured from the former Railway Department into a statutory corporation in 1982. While the KCRC had the legacy as a bureaucracy of almost a century of existence, the MTRC has been regarded as a pioneer in...

    • 5 MTRC’s Struggles for Profits and Autonomy
      (pp. 93-124)

      The MTRC is more than a railway business. Today, it runs a financially successful metro system and property development business in Hong Kong, with diversification into commercial sectors and international markets. Before the merger reform in 2007, the MTRC effectively monopolised the urban railway network by carrying over 2.4 million passengers every day on the MTR metro and the Airport Express systems. The MTR network has a total length of 91 kilometres comprising six passenger lines of 50 stations. The six MTR lines are, in the order of opening: the Kwun Tong Line (since 1979 with the East cross-harbour link...

    • 6 KCRC’s Governance Controversies
      (pp. 125-158)

      The KCRC was successful commercially. The statutory corporation was profitable and its performance matched international commercial standards such as ISO accreditation of quality. Nonetheless, the KCRC was less popular than the MTRC and plagued with public controversies in its twenty-five-year corporate history. Although the broad government policies, legal framework, governance structure of the two railway bodies were basically similar before 2000, the KCRC and the MTRC developed in different directions in corporate governance, management and working relationship with the government over the years. This chapter argues that the operating environment and tasks of the KCRC were indeed not the same...

  10. Part III Challenges in Railway and Property Development

    • 7 Leading Railway Builder versus Controversial Project Manager
      (pp. 161-184)

      Part III compares the experiences of the MTRC and the KCRC as project managers in railway construction and property development. This chapter focuses on railway projects and the next chapter on property development and environmental issues in new projects. On the whole, the MTRC is successful as a leading railway builder in Hong Kong and internationally whereas the KCRC faced quite serious controversies in its major railway projects in the past. Differences in new project management strategies offer only part of the explanation for the contrasting experiences. The two public railway corporations developed new railways under different political, social and...

    • 8 Property Development and Environmental Impact of Projects
      (pp. 185-198)

      The two Hong Kong government–owned railway corporations were about more than railway transportation as emphasised in this book. They were major property developers enjoying special government policy advantages. That created special political and business dynamics between the MTRC, the KCRC, the government and private property developers. Their extensive involvement in both railway and property development had profound impacts on the urban and rural environments in Hong Kong in both positive and negative ways. Their environmental management strategies were therefore of significant public interest and attention. This chapter of Part III chronicles the issues confronting the two railway corporations in...

  11. Part IV Passenger Interests

    • 9 Passenger Fares, Choice and Convenience
      (pp. 201-220)

      Local passengers and overseas visitors find travelling on Hong Kong railways a pleasant experience. The stations and trains are clean and bright, especially in the MTRC networks. The railway service is safe and generally reliable. The Octopus is a convenient smartcard that can be used for multiple purposes. In particular, the MTR operation has set a standard for many East Asian cities such as Singapore, Taipei, Beijing, Shanghai and Guangzhou. The commercially oriented railway system in Hong Kong has successfully met the passenger demand for a modern and efficient subway system while ensuring a financially viable operation.

      Nonetheless, passengers are...

    • 10 Rising Passenger Expectations for Reliable Operation
      (pp. 221-232)

      Chapter 9 explained that railway passengers in Hong Kong have been most concerned about fares out of all passenger interest issues. They were less worried about the safety and reliability of MTR and KCR services. This may indicate that railway passengers were generally satisfied with the operational performance of railways. On the other hand, there was a catch for the two railway corporations — people expected highly of them and found their failures to deliver decent performance (such as when delays, incidents or crises occurred) more unacceptable. Expectations grow as society progresses on all fronts. This is not to say Hong...

  12. Part V Looking to the Future from the Past

    • 11 The Future: Two Railways Becoming One?
      (pp. 235-262)

      On 30 June 2006, the eve of the ninth anniversary of the Hong Kong SAR, the government gazetted the Rail Merger Bill, which aimed to merge the operation (not ownership) of all the Hong Kong railway systems under the MTRC Limited. After the first reading on 5 July, the Bill was put under for consideration by a bill committee joined by almost half (29) of Legislative Council members. In addition to the fundamental restructuring of the railway sector, the merger package included explicit and subtle changes to certain longstanding railway policies including fare autonomy and property development described in this...

  13. Epilogue
    (pp. 263-266)

    On 12 December 2007, the history of Hong Kong railways turned to a new page. The operation of all railways systems was merged under the MTRC Limited on that day. The KCRC ceased to be a railway operator and was restructured into a government entity holding the KCR railway assets. The MTRC Limited was given a new Chinese name (香港铁路有限公司 ‘Hong Kong Railways Limited’), aptly reflecting its new status — a railway monopoly in the territory. The burden of assimilating the KCRC operation would be immense on the MTRC management. The complex task was compounded by a more restrictive policy environment...

  14. Endnotes
    (pp. 267-300)
  15. References
    (pp. 301-308)
  16. Index
    (pp. 309-316)