Failures of Comprehension


From the SCMP a few days ago:

As compensation to build the potentially money-losing extension in Kennedy Town, the MTR Corp wants to get the police quarters in Ka Wai Man Road - a premium sea view parcel of land with a potential income of HK$6 billion. That is a whopping profit.

Wait a minute; the MTR Corp is a listed company and decisions should be based on business logic.

If it is not profitable, why build the extension? I don't see any reason why we would give the rail operator such a precious parcel of land. If the government auctioned the land, the Treasury would pocket almost HK$3 billion. This money belongs to Hong Kong people and should never be a gift to anyone.

It is just not right from the citizens' view. It is also wrong to subsidise any project and not follow a business logic in business operations. It's like a telephone company asking the government for a large gift so it would extend its phone lines 3km further. What a joke!

Inde Au, Wan Chai

You'd think that experience would help quell the fanatics of the Church of Privatisation. But, even after the disaster that British Railways became, some people still think that every enterprise would be magically better off in private hands, or where a bunch of shareholders can demand short term profits.

Railways don't make a short term profit. Railways make it possible for the businesses they serve to make money by allowing workers to get to work, allowing shoppers to get to shops, even allowing transportation of goods and products (although that's on a relatively small scale in HK).

Urban Railways, when operated as a business by themselves, are extremely unlikely to be profitable. Even in Hong Kong, where the city is small and densely packed, car ownership is low, and there's a fully integrated fare system, the railway does not make money.

Or maybe it does, if you look at it right. With greater access to the Central Business District and the suburbs, it is easier for people to move around and get to work. This greater flexibility means that workers can travel from further away to the CBD and increase the productivity thereof. (Imagine if you had to have a parking space for every office worker in Central...)

This greater productivity leads to (hopefully) greater profits, which leads to larger tax revenues which would lead to greater profits for the largest shareholder of the MTR, HK SAR Govmn't.

So The MTR *is* acting for the financial benefit of it's major shareholder, HK Gov't. By increasing the mobility of HKers, MTR increases the ability of people to find work, consume products or in other ways prop up the economy.

About Me


  • Unsolicited Bulk Email (spam), commercial solicitations, SEO related items, link exchange requests, and abuse are not welcome here and will result in complaints to your ISP.
  • Any email to the above address may be made public at the sole discretion of the recipient.

Other Stuff

  • Powered by Linux
  • (RedHat Linux)


Monthly Archives

About this Entry

This page contains a single entry by dave published on September 7, 2006 1:44 AM.

Crikey! was the previous entry in this blog.

PT Demands is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.