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How the MTR turns a profit

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  1. #11

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    if actually read the latest result announcement by MTR, the operation and amortization cost for the train network is high and out of 19.5b of transport revenue only translated into 1.9b of profit.. Without the investment properties MTR would probably run into ground in a few years time like what happened to MRT of Singapore.

    Anyway sometimes i find the public pleasing commentaries from the HK press quite amusing and not well thought out.
    I would assume the best way to use a valuable commodity (i.e. land near to a transport node) is to sell it to a highest bidder, then the money from the high bid used to provide meaningful subsidy to the less privileged.
    But now they want it to be given at low cost to public housing, then further sell them at a discount to common citizens under a balloting system. In the end, the only beneficiaries are the few guys that managed to ballot for the unit and get the unit at a deeply discounted price in consideration of the location, where they can subsequently sell them off for a good profit.
    One good example, the public housing at Stanley in HK. If that land were sold to private developer, the money returned would have provided better ways for government to build more housing. Now we have some lower income chaps living in a high cost environment like Stanley, far from common area of work, expensive to acquire daily items, etc.etc.etc.. Sounds nice (that public housing can be built at expensive location) but economically defeating and super impractical.
    It doesn't make much economic sense to hk as a whole.. And honestly to MTR it does not impact them, if government sets their rules at 30% public 70% private, MTR would just work out the sums and get the government to provide bigger parcel of land or other form of subsidy to close up the gap.. The losing party is still the common people (outside of the 3000 pax that won the ballot) of HK.

    Bear in mind that HK government owns 75% of MTR.. so whether the land is given to MTR at what price, end economic benefit still goes mainly to HK government. If a HK citizen believes MTR is profiteering 'criminally', he/she only needs to buy the shares of MTR.. the remaining 25% are freely traded in the market.

    JAherbert likes this.

  2. #12

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    Recent scandals show that MTR should be more careful about involving dodgy mainland contractors.


  3. #13

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    Quote Originally Posted by Paxbritannia:
    Recent scandals show that MTR should be more careful about involving dodgy mainland contractors.
    isn't leighton an Aussie (OECD country) listed entity ?

  4. #14

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    MTR gives out contracts, who then subcontracts who then subcontracts. Layers and Layers of FAT to slice off and share and give the bones to the actual contractors who does the work.