Public transport CEO looks ahead to China's reopening with confidence

With the title "Economic Recovery: Opportunities and Cooperation", the China Development Forum 2023, held from Saturday to Monday in Beijing, has attracted more than 100 overseas participants.

Addressing the issue of the Chinese path to modernization, Jacob Kam, CEO of MTR Corp, said during the forum that high-quality railway services are the key.

'Rail plus Community'

In the past several years, urban rail transit development has played an irreplaceable role in China's economic development. However, despite its enormous external social and economic benefit, rail transit development usually has a low internal return on investment, the company said.

Not only is huge investment needed for railway construction, but the subsequent operation and maintenance also require significant reinvestment. It is hard to break even and achieve sustainability merely from fare revenues. Furthermore, relying heavily on government subsidies may lead to tremendous financial pressure on governments. With the completion of backbone rail transit networks in cities, the sustainability of rail transit infrastructure has emerged as a daunting challenge for all operators and local governments.

Hong Kong is globally recognized for the quality of its public transport systems. Over the past decades, MTR, as the railway service provider in Hong Kong, has been providing passengers with safe, reliable and efficient railway services and building communities along its network through a "Rail plus Community" model, the company said.

As well as building new rail lines, MTR plans and creates fully integrated commercial and residential communities above, or adjacent to, stations along the track alignment. The model requires no direct government financing and provides a sustainable funding framework for railway construction, operation and upkeep as well as a foundation for the generation of diversified revenue streams. This makes the city a benchmark for a successful transit-oriented development strategy.

With that, MTR Corp continues to foster Hong Kong's development by providing high-quality railway services and creating low-carbon communities while ensuring the financial sustainability of the company. It is a winning situation for all parties involved, including the society, government and rail transit operator, the company said.

Keep cities moving

In response to climate change, the central government has taken proactive steps by introducing a new development philosophy, making "green, low-carbon and sustainable" development a priority.

Experience has shown that proactive development of public transportation in densely populated areas is one of the most effective ways to reduce carbon emissions, the company said.

In Hong Kong, about 90 percent of the commuting in the city is on public transport and nearly half of those journeys are on the MTR network. For these 4 million-plus daily passenger trips that make use of the railway system, MTR's energy consumption accounts for only 3.5 percent of the transport sector carbon emissions in the city.

As the operator of a reliable, efficient and environmentally friendly transportation system, MTR is playing its part in moving Hong Kong toward becoming a carbon-neutral city by 2050. The corporation is currently setting a science-based carbon reduction target for its railway and property businesses in Hong Kong by 2030. It has also established a sustainable finance framework.

In 2021, HK$4.8 billion ($611 million) in green finance was arranged under the framework to support its sustainable development by funding projects that can conserve energy, protect the environment, and enhance and expand low-carbon railway services.

The corporation has also made investments in recent years to expand from its home base in Hong Kong, outwards into nine metropolitan cities worldwide, constructing, operating and managing more than 3,500 kilometers of urban and intercity rail transit projects in these nine cities.

MTR Corp is committed to embedding environmental, social and governance considerations and sustainable development concepts into its businesses and operations to create long-term benefits for all stakeholders, the company said.

Moreover, with more than 300 km of operating urban rail transit in Beijing, Shenzhen and Hangzhou, the corporation has been actively sharing its experience and participating in the development of urban rail transit on the Chinese mainland. It will continue working closely with governments and industry peers to contribute to the green and sustainable development of China, the company said.

"As the pandemic subsides, China is reopening to the world. In January, the Chinese mainland and Hong Kong resumed full cross-boundary travel, which is what I hoped for when I used connect' as the keyword for the year ahead at the 2022 CDF. This year, I want to use the word 'prosperity' to wish that people's confidence will be restored, all economic sectors revitalized and the country will prosper as social and economic situations return to normal.

"In the past three years, China has ensured a relatively stable life by taking precise measures for pandemic prevention and control, and therefore has achieved an average annual economic growth rate of about 4.5 percent, higher than the world average of 1.8 percent.

"Looking ahead to 2023, the global economic recovery still faces huge challenges. China's modernization drive, which is recovering from the pandemic and external effects, must aim at high-quality development, with growth focused on both quantity and quality," Kam said.