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Financial Sustainability

 

Managing Financial Sustainability

The heavy rail transportation business is long-term and capital-intensive. Our assets require regular and substantial expenditure to maintain, replace and upgrade. We always strive to be prudent to ensure the Corporation is financially sustainable over the long haul, to keep up with the ever-rising cost of providing smooth, safe and reliable services for our passengers.

From the economic value generated through our transport, property and other businesses, we can contribute to our wide range of stakeholders including suppliers, employees, shareholders, Government and the community at large.

Details of our Value Added and Distribution Statement can be found in our Sustainability Report.

Fare Adjustment Mechanism

Fare revenue is one of the major sources of income for MTR. The transparent Fare Adjustment Mechanism (FAM) is based on economic data released by the Government to ensure fair, objective and transparent fare adjustments over time. The inflation tracking mechanism ensures our services remain affordable to all passengers and the Corporation would not run into financial problems when costs to maintain assets escalate over the years.

Every five years, we are scheduled to review the FAM under our Operating Agreement with the Government.

Rail plus Property Model

Since the opening of MTR's first railway line in 1979, our “Rail plus Property” model has brought significant benefits in optimising the integration between our property developments and railway network. The resources that our property development opportunities bring in are in turn used to support railway operations and help fill funding gaps when building new railway lines. It integrates development with the transit hub to create seamless connectivity and builds vibrant communities in Hong Kong where housing is in short supply. Our heavy rail network now covers all 18 districts in Hong Kong which improved accessibility and enhanced development opportunities for many locations. Our Rail Plus Property video provides a more detailed account.

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