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Following is a question by the Hon Regina Ip and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (February 3):
Question:
The MTR Corporation Limited (MTRCL) is implementing five local railway projects, namely the projects to construct the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL project), the Shatin to Central Link, the extended Island Line to Western District, the South Island Line (East) and the Kwun Tong Line Extension. All of those railway projects have experienced work delays, with the delay in XRL project being particularly serious. Meanwhile, MTRCL has been actively developing its railway-related businesses on the Mainland and overseas. In this connection, will the Government inform this Council whether it knows:
(1) the details of the railway businesses being developed by MTRCL outside Hong Kong at present, including the titles, investment amounts and scales of the projects;
(2) the respective models under which MTRCL develops the railway businesses mentioned in (1) above; the following information of each of the projects developed under a service franchise model: (i) the project title, (ii) the city where the project is located, (iii) the commencement and expiry dates of the franchise, and (iv) the (target) commissioning date of the relevant railway;
(3) the details of the manpower resources deployed by MTRCL to the development of railway businesses outside Hong Kong, including the number of Hong Kong employees who are dedicated to undertaking such businesses and the number of Hong Kong employees seconded from Hong Kong on a short-term basis; the job descriptions of those two types of employees;
(4) the details of the manpower shortage situations encountered by MTRCL in implementing the aforesaid five local railway projects; and
(5) the specific measures and mechanism put in place by MTRCL to ensure that the implementation of local railway projects will not be affected in the course of developing railway businesses outside Hong Kong?
Reply:
President,
Hong Kong is the home base of the MTR Corporation Limited (MTRCL), and the development of local railway businesses is the core business of the Corporation. Railways form the backbone of Hong Kong's public transport. Since railway services are solely operated by the MTRCL, the Corporation is tasked with great responsibilities.
It is the MTRCL's established policy that when developing any business in the Mainland or overseas, the Corporation must keep its primary focus on local businesses. In fact, to strengthen the management, the MTRCL has set risk management indicators for its Mainland and overseas investments. The total investment in the Mainland projects shall not exceed 15 per cent of the Corporation's shareholders' fund (including all equity investment and shareholders' loan). As regards overseas investment, the indicator is that total investment shall not exceed five per cent of the shareholders' fund. The Corporation from time to time reviews the appropriateness of such risk management ratio (in respect of the Corporation's resource allocation) to maintain steady development of the businesses both in and outside Hong Kong.
The Government understands the public's concern about the operational strategies of the MTRCL, and has been proactively carrying out its duty as the Corporation's majority shareholder. The Government has been calling on the Corporation to keep in view its corporate structure and operation, maintain quality local railway services, and carry out the construction works of new railway projects in a satisfactory manner. In recent years, the MTRCL's expansion in railway businesses in the Mainland and overseas has been recognised with admiration because of its sound operation and management. The Government welcomes and encourages the MTRCL, as an international brand of Hong Kong, to continue to develop its Mainland and overseas businesses in a steady manner. At the same time, the Government will continue to remind the MTRCL to keep its primary focus on local railway businesses. The performance of its local railway services and construction projects should not be affected by the development of Mainland and overseas businesses. The MTRCL has also pointed out that it would carefully analyse each and every potential investment project before confirming the Corporation's participation. This includes reviews on the risk and return, local laws, market competition, manpower required from Hong Kong and the local community, etc. Apart from internal assessments, the Corporation also engages external consultants for advice where necessary, with a view to ensuring that the resource allocation is pursued on the principle of striking a balance between risks and reasonable commercial returns, and that it will not affect the Corporation's local businesses.
My reply to the various parts of the Hon Regina Ip's question is as follows:
(1) and (2) The MTRCL has been developing its railway businesses in the Mainland and overseas through joint ventures or wholly-owned subsidiaries. Currently, the MTRCL is involved in the construction and operation of railway projects in three Mainland cities, namely Beijing, Shenzhen and Hangzhou. As regards its overseas businesses, the Corporation operates railway services in London in the United Kingdom, Stockholm in Sweden, and Melbourne in Australia. Besides, the Corporation is involved in the construction and operation of a railway project in Sydney, Australia. The details of these projects are set out in Annex 1.
(3) The MTRCL has pointed out that its management of businesses in the Mainland and overseas follows the principle of "on-the-ground management". This means establishing a subsidiary or setting up a joint venture with other companies. These subsidiaries or joint venture companies will then search for and employ suitable local talents, who will be responsible for the execution and support of the construction or operation of railways. Currently, a total of about 8 200 staff are employed by the wholly-owned subsidiaries or the joint-venture companies, of which the MTRCL is the majority shareholder, in the Mainland and overseas. Under this arrangement, staff deployed from Hong Kong to various Mainland and overseas cities only account for a very small proportion of the total manpower of these companies.
Currently, the MTRCL employs over 17 100 staff in Hong Kong. About 80 of them are dedicated Hong Kong staff responsible for railway businesses outside Hong Kong. Some of these staff work in Hong Kong, with the major responsibilities of coordinating Mainland and overseas businesses, and budgeting, evaluating risks and formulating strategies for various projects. The remaining staff are posted to a subsidiary or joint venture company in the Mainland or overseas to provide support for the construction, daily operation and maintenance of local railways.
Besides, a small number of Hong Kong management or technical staff may be seconded by the MTRCL to different cities on a short-term basis as necessary from time to time. Such staff are responsible for providing professional advice for the local MTRCL subsidiaries or joint venture companies on such matters as the construction, daily operation and maintenance of railways. They can also gain useful overseas experiences through the secondment. The total number of such staff currently stands at about 30.
(4) and (5) As mentioned above, the MTRCL has all along been keeping its primary focus on local railway businesses, and has put in place a mechanism and effective measures to ensure that local businesses will not be affected by any development of railway businesses outside Hong Kong. For implementation of new local railway projects, the Hong Kong section of Guangzhou-Shenzhen-Hong Kong Express Rail Link, the Shatin-to-Central Link, the West Island Line (fully commissioned last year), the South Island Line (East), and the Kwun Tong Line Extension are major underground infrastructure projects of a considerable scale. There are various constructional difficulties and challenges, as well as public opinions on the construction arrangement, encountered in the course of construction. It is unavoidable that there are deviations from the original plan for individual works contracts. As advised by the MTRCL, shortage of construction workers has all along been an issue encountered by local railway projects, which hampers the progress of local railway projects to different extent. Based on the information provided by the MTRCL, the shortage of construction workers in respect of the five local railway projects in the past three years are tabulated in Annex 2. The MTRCL has adjusted its works procedures having regard to the actual conditions of work sites. Additional manpower and machinery have also been deployed in order to overcome the difficulties.
The Transport and Housing Bureau (THB) and Highways Department have all along been closely monitoring the works progress and the construction situation, and providing appropriate assistance where necessary for early commissioning of the concerned railway lines. For the progress of the five above-mentioned railway projects, please refer to the quarterly reports submitted by the THB regularly to the Subcommittee on Matters Relating to Railways under the Legislative Council Panel on Transport.
Ends/Wednesday, February 3, 2016
Issued at HKT 16:25
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