MTR Corp CEO Jacob Kam Chak-pui (center) and other members of the company’s senior management unveil the 2023 Interim Results during a news conference on Tuesday. With its notable rebound in passenger traffic this year, the company remains committed to enhancing connectivity with the Chinese mainland through the development of high-speed rail networks and facilitating a seamless travel experience. (CALVIN NG / CHINA DAILY)

“Smart” and “sustainable” will be the focus of MTR Corp’s commitment in the coming years, embracing cutting-edge technologies to ease passenger flow in stations and simplifying passenger commutes.

With the ultimate goal of delivering a world-class “Smart Railway”, the corporation is looking to deliver a caring and personalized travel experience to passengers throughthe infusion of advanced technologies, such as upgrading entry and exit gates at stations to offer more e-payment options, MTR CEO Jacob Kam Chak-pui said at a newsconference on Thursday, as he announced the company’sinterim performance results and strategies.

Being ahead of the railway electronic-payment curve, MTR has fared well and solidly on its Octopus system,with a massive penetration rate in the city

With the gradual recovery of Hong Kong and resumption of cross-boundary services since January, the patronage of domestic and cross-boundary services has gradually recovered, with its domestic service patronage recently reaching over 90 percent of the pre-pandemic level, Kamsaid. The stations’ commercial business has also registered a notable improvement. “We have also maintained a world-class level of 99.9 percent for both train service delivery and passenger journeys on time on our heavy-rail network in the first half of this year,” Kamsaid.

READ MORE: MTR may increase fares by 2.3% under new formula

Testament to smart HK

As a nod to Hong Kong’s prevailing ambition of building a smart city with a well-curated collection of smart offerings, MTR Corp continued to “keep cities moving”with its “Smart Railway” initiatives in the first half of this year, Kam said.

Since digitalized transport and payment is an integral part of the “smart” tapestry, the corporation plans to introduce a credit card ticketing service by the end of this year, furthering convenience in smart mobility for passengers.

The company will continue to invest resources in Smart Railway Asset Management, with more than HK$65 billion ($8.32 billion) pivoting to railway asset maintenance and renewal in the next five years, including the establishment of MTR Astrilab, which will explore and maximize applications of such technologies as artificial intelligence and the internet of things. Green features will also be melded in the design, construction and operation of its new railway projects.

The hefty sum of HK$65 billion to be invested over the next five years could mean an equivalent of HK$13 billion spent per year, which may indicate a 30 percent increase in annual expenses for the MTR service provider, said Conita Hung Lai-ping, investment strategy director of Tiger Faith Asset Management. But as the chances are these additional expenses could be offset by the regular maintenance and engineering costs that are currently incurred, the extra expenditures may amount to only a tad over 20 percent of the current status quo, Hungadded. “I reckon this can be managed through increased bank loans or issuing bonds. If sales of (MTR) property continues to generate stable income in the future, it should be manageable. However, in that case, there will be a rise in financial expenses in the long run,” Hung said of the funding and bidding issues that coincide withthe extra investment.

Being ahead of the railway electronic-payment curve, MTR has fared well and solidly on its Octopus system,with a massive penetration rate in the city, said Gary Zhang Xinyu, a legislator who used to work as an MTR service-station manager. The introduction of QR codes and further expansion of electronic payment options to digitalize the entirety of MTR system is “just on cue”, aligning with the onus and vision of smart sustainability adopted by developed cities globally, Zhang said.

Applauding the MTR’s steps along the smart route, Zhang decided that “improvement in railway operations performance hinges on the incorporation of innovative technologies. It will pay dividends to its railway assets management and catering to the demand of millions of customers, through enhanced operation efficiency and a tangibly better user experience.” 

Technological upgrade throughout the metro infrastructures will catalyze Hong Kong to become a smart and green city as the country has pinned its expectations on the special administrative region, Zhangsaid.

Cross-boundary connectivity

Streamlined and fluid connectivity between Hong Kong and the Chinese mainland, in particular the Guangdong-Hong Kong-Macao Greater Bay Area, will continue to be a priority of the corporation.

“In our high-speed rail service, we enhanced the facilities and services at Hong Kong West Kowloon Station during the pandemic and have added new destinations such as the Guangzhoudong (East Guangzhou) and Chengdudong (East Chengdu) stations, reaching a total of 68 directly connected high speed rail stations since January. This expansion provides more convenience for passengers traveling between Hong Kong and the Chinese mainland,” Kam said at the conference.

Tourists, especially from the Chinese mainland and cities in Guangdong covered by the high-speed rail, have always provided a heartening momentum to Hong Kong’s railway business, not only through patronage but also consumption at stores

“With the support from the mainland’s railway authorities and the HKSAR government, the corporation will launch the ‘Flexi-trip’ arrangement for Futianjourneys on Aug 14, further enhancing the travel convenience and flexibility for passengers travelling between Hong Kong and Shenzhen.”

The plan for the Hung Shui Kiu Station on the Tuen Ma Line was gazetted in February, and the Northern Link project is expected to be gazetted later this year, which involves HK$100 billion of investment, added Kam who is convinced that it will boost connections between Hong Kong and the rest of the Greater Bay Area, with the added bonus of employment opportunities and cross-boundary urban dynamics.

Tourists, especially from the Chinese mainland and cities in Guangdong covered by the high-speed rail, have always provided a heartening momentum to Hong Kong’s railway business, not only through patronage but also consumption at stores, Zhang said.

“For example, duty-free shops at railway ports have consistently contributed to over half of the total stations’commercial revenue. Therefore, with the resumption of cross-border travel following the pandemic, it will undoubtedly inject a potent stimulant into MTR’s business,” he said.

READ MORE: MTR: Cross-border railway trip back to 70% of pre-COVID level

“MTR should consider exploring the potential of high-speed rail and airport rail link seamless connectivity, which will give Hong Kong a leg up in the game of tourism appeal.”

Railway top-side property development is indeed on MTR Corp’s radar. Following the soft opening of the Waishopping mall atop Tai Wai Station in July, The Southside at Wong Chuk Hang Station is scheduled to open in phases beginning in the fourth quarter of this year. “We plan to first tender out ‘Sut Tung Chung East Station Package 1’ in the next 12 months or so,” said Kam.

David Tang, MTR property and international business director, said, “Railway business, whether at high-end malls or service-focused stores, is heavily dependent on the consumption of tourists. We’re content with the current outcome, and the business is subject to economic situations in Hong Kong and elsewhere.”