What’s Going on With MTR Corp and the Problems It Encounters/Creates

The Real Hong Kong News

15th June, 2014

What’s Going on With MTR Corp and the Problems It Encounters/Creates


<<This is a summary of various articles on the recent MTR scandals>>

A series of delays on the Hong Kong MTR has uncovered the use of flawed materials in the trains’ insulation system and the need to readjust the maximum train capacity measure. The MTR Corporation has however undertaken measures to correct these errors, and expects to engage a new CEO in 2015. In spite of delays and failures, however, the rail operator will be raising its fares by June 2014.

Continuous delays and failures (Apple Daily)


One of the major complaints against MTR Corp is its recurrent technical failures and resulting delays in 2014.

Earlier in February 2014 two serious technical failures on the East Rail Line leading to temporary service suspension have revealed that the isolators used on the electronic cables of the rails are likely to be products of a flawed batch. MTR has so far refused to provide the name of the isolator producer and the product origine, but have engaged to replace all 65 insulators of the same batch, currently installed on the East Rail Line.

Two cable failures took place within ten days on the East Rail Line. Flaws in the cable isolators were identified as the cause of the first failure. However, just as the corporation has just started replacing four of the 65 insulators, the second failure took place.

MTR operations director Jacob Kam Chak-Pui affirms that it would take ten days to replace all flawed insulators, and has arranged additional technical checks on insulators of the line that are to be replaced. He stressed that MTR will seek liability from the unnamed European isolator producer.

According to Apple Daily’s report on 20th February 2014, the rail operator has not yet identified the name of it’s isolator providor, but has stressed that it has been sourcing from the same producer since the 1990s. The report reveals that the British producer Morris Line Engineering (MLE) produced 11 types of isolators for the former Kowloon-Canton Railing Corporation (KCR) from 1980 to 1997. MLE has also produced similar isolators for the Tuen Mun light rail, Tung Tsung Line, Airport Express and the Disney Line. According to foreign rail reviews, MLR has provided isolators to MTR until last year to date.

MLE was established in 1976 and is specialised in producing high voltage isolating switches. It exports to Hong Kong as well as to different rail operators in the Middle East, Africa, Northern America and other electricity or petroleum corporations. MTR has refused to confirm that the said isolators were produced by MLR, but only stressed that they need to communicate with the provider before revealing it’s name, and that the operator will seek to improve communication with its provider.

Easing the sqeeze (Apple Daily)


Another chief complaint against the local railway is severe overcrowding during rush hours of the city.

Apple Daily has reported on 26th February 2014 that MTR corp has so far underestimated its passenger capacity. In a recent evaluation report, the rail operator has admitted that it has overestimated its’ trains passenger load capacity for over 40% in recent years. According to new measure, the Tseung Kwan O and the East Rail lines are considered as severely overloaded during peak hours. The West Rail, Kwun Tong and Tsuen Wan lines have also closed up to 100% of its capacity limit. MTR is studying the possibility of ripping out more seats to create standing space for passengers, and providing earlybird discounts to encourage passengers to avoid rush hours.

The evaluation report states that all MTR train cabins are designed according to industry standards at the time the rail was built. The passenger factor load is calculated according to the average of maximum of 6 people in every meter square. However, past experience has shown that such estimation is unrealistic. MTR reports that more passengers tend to read newspaper, use mobile phones or tablet computers during their ride, thus consuming more standing space, hence a more accurate estimated passenger density should be at the maximum of 4 people in each square meter.

Considering the example of a train with 340 seats and a passenger density of 6 people per meter square, every ride can carry about 2500 people, but if the passenger density is lowered to the new measure of 4 people per meter square, then each train can only take 1780 passengers at a time. In other words, the rail operator has overestimated its passenger capacity by 40%.

The MTR corp has also provided other reasons that reduce train capacity, one of which is the installation of platform glass doors, which increases each train stop for ten seconds at each platform. An extra ten seconds is also required when the door has to reopen due to doors clipping onto passengers belongings by accident. Another plausible reason is passengers are reluctant to board a train that looks more or less filled but still has sufficient space.

More Trains to Ease Public Unrest – Taking Seats Down Cannot Resolve Overcrowding Problem (Apple Daily)


To ease the squeeze, MTR has engaged to increase train frequencies in order to satisfy growing passenger needs. It has announced that 329 more rides will be added each week on five of the most loaded lines. Island and Kwun Tong lines will increase to two trains per minute during evening rush hours, and the East Rail line will inscrease to one train every 3 minute 20 seconds. The rail operator will also increase the number of rides on weekends. The Eash Rail line will provide one train every 3 minutes 32 seconds on Sundays, and the West Rail line will provide eight additional rides every Friday and weekend evenings from August onwards, making it less than 5 minute between each train arrival.

MTR stresses that the Island line signalling system has reached maximum capacity, it will therefore be impossible to increase train frequencies on the line. It will instead study measures of earlybird discounts to ease the load. By the end of March, Kownloon Station will also carry out the “board on the right, alight on the left” measure, where passengers will have to queue up from the right side of the platform screen door for boarding, and alight on the left side.

 Hike of costs (Apple Daily)


In spite of frequent delays and technical failures and a whooping 13 billion net profit last year, the MTR Corporation will increase ticket fares by 3.6% according to its fare adjustement scheme. This shall be the second largest hike in the last five years. All 4.8 million MTR passengers will have to pay an extra 30 cents on average for every ride. Some Legco members critcise that it is unfair to raise fares as the MTR service has been continuously disappointing, with overcrowding and technical problems remaining unresolved.

MTR Corp announced on 27th March that the fare raise will be at 3.6%, measured according to the annual increases in consumer price and transportation industry nominal wage indexes, after deducting 0.6% of productivity factor. The Corporation will be able to raise the fares by 3.6 % as the raise will be lesser than the household monthly income median increase of 6.16%. The corporation will revise the fares according to the adjustment, and the new fares will be effective in June after audit by independent experts.

This will be the fifth consecutive fare inscrease since in the last five years, the second highest among all. Last year’s increase was at 2.7%.

Transport and Housing Bureau secretary Anthony Cheung Bing-Leung expressed that the fare adjustment scheme has taken into consideration macroeconomic data and citizen’s capability to afford the transport. He reminds that the increase according to this year’s measure will be lower than the inflation rate as well as the wage increase index.

However, Legco members including the vice president of the Legco Panel on Transport Gary Fan and the representative of the Hong Kong Federation of Trade Unions Tang Ka-biu both criticise the fare raise. Gary Fan maintains that it is unfair to increase fares while train service quality is on decline, while Tang Ka-biu points out that the fare raise should be at 1.45% if the new measure was based on real wage index and not the nominal wage index, the latter of which does not measure the inflation effect on wages.

Change of management board (Apple Daily)



Following series of complaints against the Corporation as well as scandals involving the delay of the High Speed Rail project have result in the resignations of two top-level members of the corporations’ management board. It has also been revealed on 12th May that the corporation has not renewed the contract with its current CEO Jay Herbert Walder, which will expire in August this year.

However, the corporation president Raymond Chi’en Kuo Fung claims that it is the result of a mutual agreement over a year ago in August 2013. According to experts of finance regulations, a change of CEO is considered as sensitive inside news of listed companies. If the MTR board of directors has been informed of such an important change, but did not reveal it to its shareholders “as soon as reasonably practicable”, it will then constitute an infringement of the Securities and Futures Ordinance.

Speculations suggest that Leung Chun Ying will seize the opportunity to exert more influence on the MTR board. According to Apple Daily’s report, the government seems to be actively supporting the Transport and Housing Bureau in face of management and technical failures of the MTR, thus passing the entire blame to the Corporation alone. One of the possible motivations for Leung to do so is the abundant source of land provided on top of MTR stations, the control of which will be favourable to Leung, who aims to significantly increase housing supply.


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