To convert these development rights to land, MTR pays the government a land premium based on the land’s market value without the railway. For new rail lines, the government provides MTR with land “development rights” at stations or depots along the route.
#Mtr corporation plus
The key is a business model called “Rail plus Property” (R+P). One important reason the system has been able to perform so well is that the government of Hong Kong has enabled MTR to make money from the property-value increases that typically follow the construction of rail lines. The average fare for an MTR trip in 2014 was less than $1.00, well under base fares in Tokyo (about $1.50), New York ($2.75), and Stockholm (about $4.00). MTR fares are also relatively low compared with those of metro systems in other developed cities. It not only performs well-trains run on schedule 99.9 percent of the time-but actually makes a profit: $1.5 billion in 2014. MTR’s railway system covers 221 kilometers and is used by more than five million people each weekday.
The whole system operates on a self-sustaining basis, without the need for direct taxpayer subsidies. But even as metro systems get bigger and serve more people, most continue to lose money.įor more than three decades, though, Hong Kong’s MTR Corporation has defied the odds and delivered significant financial and social benefits: excellent transit, new and vibrant neighborhoods, opportunities for real-estate developers and small businesses, and the conservation of open space. Cities around the world are building or expanding public-transit systems to cope with population growth and urbanization.
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