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Sustainability Report 2010
Project Management and Editorial: Streeter Strategic LtdDesign: CoDesign LtdPhotography: Leong Ka Tai
Performance Metrics+ Performance against
Quantitative Safety Targets 2010
+ Maturity Matrix of BS 8900:2006 Guidance for Managing Sustainable Development
+ Financial Performance
+ Economic Contribution
+ Independent Assurance Report
+ Responding to Stakeholder Expectations
+ CoMET Benchmarking Results 2009
+ Definitions
+ Hong Kong Operating Network with Future Extensions
Vision
We aim to be a globally recognised leader that connects and grows communities with caring service
Vision Misson Values (VMV)
Values
Excellent Service
We are committed to proactively provide safe, efficient and caring service valued by customers.
Mutual Respect
We work in an open team environment based on trust, joint commitment and respect.
We listen and respect the views of the community and other stakeholders.
Value Creation
We create profits through efficient execution, continuous improvement and innovation in delivering products and services valued by customers.
Enterprising Spirit
We have the courage to question the status quo to seek improvement, proactively taking initiatives and having the resourcefulness to overcome obstacles and reach new horizons.
Mission
• Enhance customers’ quality of life and anticipate their needs
• Actively engage in communities we serve
• Foster a company culture that staff can learn, grow and take pride in
• Provide sustainable returns to investors
• Set ourselves new standards through innovation and continuous improvement
• Grow in Hong Kong, Mainland of China and capture opportunities in Europe by extending our core competencies
Contents
About this Report 01
02From the Chief Executive Officer
04Global Organisation
14Engagement
25Low Carbon Future
06Risk
31
Report Cover Story
The West Island Line is a shared vision between company and community. The active dialogue on understanding and respecting expectations has shaped how this and our other future rail projects will serve and grow with local communities.
Collaboration is the operative word behind our dialogue. It reflects awareness of aspirations and genuine response to issues. It requires listening and visibility of action.
It is not just in the regular town hall meetings, but in the on-site presence and daily interaction with residents that assures the vision is alive and well.
Community walkway outside construction works for West Island Line
Ab
out this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
While the many well-established governance and management systems continue to provide a solid foundation for organisational development and business intelligence to manage change, discussion of current actions in terms of risk management and stakeholder engagement demonstrates the inherent resilience of systems and our ability to take timely and appropriate action.
To this end, we share our management thinking and give insight into the many decisions and initiatives we are taking that determine our future as a successful commercial enterprise, while maintaining our social contract and license to operate. The performance metrics cited throughout this document are our report card on how well we have progressed on the sustainability journey.
This report is published to inform our industry colleagues, our constituent stakeholders and the many professional groups and NGOs that we engage with on sustainability. We view discussion as a starting point for the sustainability dialogue and the continued sharing of best practices. This year, discussion widened to cover a broader community inclusion and the long-term impact we are creating as we expand our operational footprint, both in Hong Kong and external markets.
Scope of Report
Discussion within this report principally covers activities in Hong Kong, our major business centre. Information concerning our global and mainland China operations is presented where stated. Reporting performance and achievements is limited in these external markets due to the early operational phases of projects, in particular in mainland China, and to the management autonomy allocated to our subsidiaries or concessions.
In structuring this report, we have applied the AA1000 AccountAbility Principles of materiality, inclusivity and responsiveness as articulated through our Sustainable Competitive Advantage model. The processes within this model give rise to the systematic identification, prioritisation and management of both corporate risks and stakeholders expectations and perceptions. Refer to our website (www.mtr.com.hk/sustainability) for a more detailed discussion of the model’s architecture and its processes that demonstrate how these principles are incorporated.
This report covers the priority organisational and business-unit challenges recognised during the year. We give insight to why they are material to our sustainable development and how we are responding to and managing the impacts. We illustrate our response and resilience at the workplace or at stakeholder interface with the inclusion of several frontline stories throughout the report. The Priority Sustainability Business Risks and Performance 2010 table on page 13 captures our broader organisational sustainability risks, while discussion across the report identifies the material risks within business units. The sustainability website gives further in-depth discussion of these and other significant issues and our efforts to manage them.
PricewaterhouseCoopers (PwC) has been commissioned to provide an independent assurance report on selected quantitative data that confirms progress of key performance indicators. Their report is on page 35 of this report.
Under the Global Reporting Initiative (GRI) framework, we apply the self-assessed A+ level. The 2010 G3 Content Index is located on our sustainability website to facilitate access of more extensive and relevant documents from within the company.
In this 2010 report, we present our sustainability journey in the context of the social and public policy changes in our business environment and the critical challenges these present. We find it most relevant to focus on how we are anticipating, responding to and communicating with stakeholders in the wake of the sharp rise in social and environmental expectations in Hong Kong. We also explore the changing risk profile of the organisation and the challenges we face in managing them.
01
We value your feedback and comments about our sustainability report and overall sustainability journey. Questions or comments can be addressed directly to our Sustainability Development Manager, [email protected] or through our sustainability website.
About this Report
We marked 2010 as a year of strong performance in our rail and property businesses, confirming our resilience as a social asset and commercial entity. Positive economic momentum in both Hong Kong and mainland China has supported gains and our growth in these markets. In Europe and Australia, our expertise and competencies in rail operations continue to improve concession performance. As well, steady progress has been made with our five new rail projects in Hong Kong, with construction under way in two, while three are in advanced stages of planning and approval.
Our mainland China and international business is moving forward. With longer- term concessions and substantial upfront financial commitments required in China, careful consideration is given to investment, partner organisations and industry risks. While it is early days with
most projects, we are on the whole making good progress and leveraging competencies appropriately.
Success, however, does not come without uncertainties. In Hong Kong, we have faced a year of shifting public policy and, more importantly, highly vocal assertion of societal aspirations. These events weigh significantly on our social contract, prompting close scrutiny on how we engage and manage our business. Our challenge is to respond to these changing circumstances and to be seen doing so.
This report tables the most significant impacts and risks that these events and other important challenges bring to our sustainable development journey. We share with you how, when assessing and responding to the challenges, we frame them not as opposing forces, but more as defining influences to achieving sustainable competitive advantage.
“Success, however, does not come without uncertainties. In Hong Kong, we have faced a year of shifting public policy and, more importantly, highly vocal assertion of societal aspirations... Our challenge is to respond to these changing circumstances and to be seen doing so.”
From the Chief Executive Officer
the community liaison groups actively engage concern groups on issues and share progress on work related to the new rail projects. Several positive initiatives have come from engagement, such as the preservation of local heritage sites, strong environmental protection and innovative site practices to keep noise, dust and traffic disruption to a minimum.
Regulators also have an impact on our business environment. Recent announcements in relation to property development are set to reshape industry practices. New standards in building energy management mandate smaller carbon footprints in buildings. More significantly, changes in gross floor area allowances will have an important effect on how we plan and co-develop the properties attached to our rail network. In conjunction with industry bodies, we are seeking consensus on a best solution while maintaining our commitment to societal aspirations and environmental excellence.
A new chapter in our sustainability journey is upon us, marked by growth, expansion and exploration of new opportunities. It is an exciting prospect that we look forward to and a journey that will be shared by and benefit the communities we serve and our broader society.
Yours, C K Chow Chief Executive Officer 28 April 2011
Amongst the most important are the increasingly complex risks related to delivering five new rail projects in Hong Kong over the next decade. To this end, we are maturing our relationships with supply chain partners, the communities affected and the public to cope with the scale and pace of the delivery programme. We believe that partnerships foster more successful solutions. We have also introduced internal programmes to transform work practices amongst our staff that value innovation, engagement, teamwork and knowledge sharing.
The architecture of our response reflects our business intelligence and stakeholder engagement. Combined, these bring clarity, focus and accountability to decisions. They also give critical insight into our management direction when planning and implementing our social, economic and environmental future. However, it is the uniqueness of our corporate culture and Vision Mission Values that shape our reputation and bring these decisions to life at the workplace.
We have invested significant time and resources to prepare our people for the challenges ahead. Programmes to nurture promising managerial talents, enhance competencies needed for the next phase of project construction and attract a new generation of skilled and committed staff are high on the agenda. We are also collaborating with external bodies such as the Construction Industry Council to help steward Hong Kong's future professionals and industry leaders, as well as strengthen existing skills and specialist professions. We are sharing our expertise with our international concessions and have set up a training centre in Shenzhen to foster best practices in mainland China.
Our contract with Hong Kong society is increasingly challenged as we see local communities and the younger generation becoming more decisive in public policy. We are responding with more targeted engagement strategies and programmes that leverage communication and educate stakeholders on our position and capabilities as an urban transport planner and operator. As an example,
03
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
The MTR Corporation is a public company listed and headquartered in the Hong Kong SAR. We have established businesses in mainland China through long-term rail partnerships and property investment. We also undertake rail operation concessions in Europe and Australia and are engaged in rail consultancies in several locations, including the Middle East, Southeast Asia and South America.
The MTR Corporation is a model in self-sustained rail transport and is recognised for its innovation in leading 21st century global urban development.
We seek to operate within a unique rail plus property business approach that supports organisational sustainability. With purchased undeveloped land rights, assets are acquired through co-developed properties adjacent to the built rail infrastructure. By leveraging investment opportunity in these developed property assets and management of properties, long-term financial gains are realised. Through the self-financing of rail assets, competitive fare structures
are established, contributing to sustained patronage of the system.
The rail plus property model establishes a synergy between community and rail, providing transport hubs that encourage social and economic development around stations, revitalising or establishing new centres of activity. By building consensus with the local communities on rail aspirations, we establish a social contract for our services, while contributing to the broader development of our society.
AustraliaMelbourne
People’s Republicof ChinaHong Kong SAR(Headquarters)Shenzhen
Beijing
Hangzhou
United KingdomLondon
SwedenStockholm
Rail
Hong Kong Passenger ServicesA territory-wide rail network connects passengers to their destination in a seamless travel experience that links regional centres through a series of local community hubs. The network is one of the most intensively used mass transit systems in the world and is known for its reliability, safety and operational
218.2km total route length
84 heavy rail stations
68 light rail stops
1 cross-boundary rail passenger service
17 feeder bus routes
NP360 Cable Car
Station Commercial and Rail-Related Businesses
The rail network’s stations provide convenient customer services, including retail shopping, infotainment and social amenities. Our goal is to be a place to be, rather than a place to pass through.
1,254 station shops
21,021 advertising points in stations
23,817 advertising points in trains
3G communication access across network 44 e-instant bonus machines in stations
Rail Project Construction
Five new rail projects will add approximately 56 km of track to the Hong Kong mass transit network, revitalising communities and connecting neighbourhoods to regional centres of Hong Kong and the Pearl River Delta.
In Progress • Express Rail Link (Guangzhou-Shenzhen- Hong Kong Express Rail Link) (operational
• West Island Line (owned by MTR)
Planning and Design • Kwun Tong Line Extension (owned by MTR) • South Island Line (East) (owned by MTR) • Shatin to Central Link (operational model to
)
04
Global Organisation
InvestmentThe rail plus property model provides the opportunity for long-term revenue streams accrued through property assets. Securing retail and commercial space above stations provides the additional synergy between network and community.
HONG KONG
225,650 m2 lettable floor area (retail properties)
41,090 m2 lettable floor area (offices)
11,202 m2 lettable floor area (real estate for other uses)
MAINLAND CHINA
18,351 m2 lettable floor area
DevelopmentWe engage professional property companies to co-develop properties in Hong Kong secured under the rail plus property model. We closely consider societal and environmental aspirations when engaging industry expertise and seek innovation in living spaces and public amenities.
ManagementThe portfolio of managed residential and commercial properties positions the company as one of the largest landlords in Hong Kong. We leverage our management expertise with numerous contracts in major cities of mainland China.
HONG KONG
744,214 m2 managed commercial and office
81,962 residential units
MAINLAND CHINA
776,402 m2 managed property
Property
Mainland China and Overseas Railway Businesses at a Glance
49%
Public-Private- Partnership (PPP)
Sept 2009
30 years
24
28 km
Effective interest of MTR Corporation
Business model
Commencement of franchise/ expected date of commencement of operation
Franchise/concession period
Number of stations
Route length (km)
49%
Operation and Maintenance (O&M) Concession
Dec 2010
10 years
11
22 km
100%
Build-Operate-Transfer (BOT)(2)
Phase 1: Jul 2010Phase 2: Mid 2011
30 years
Phase 1: 5Phase 2: 10
Phase 1: 4.5 kmPhase 2: 16 km
50%
O&M Concession
Nov 2007
7 years
55
110 km
100%
O&M Concession(3)
Nov 2009
8 years
100
108 km
60%
O&M Concession
Nov 2009
8 years
213
372 km
49%
PPP
2012
25 years
31
48 km
PENDING FINALISATION OF AGREEMENT
IN OPERATION
Beijing Metro Line 4 (BJL4),mainland China
Daxing Line ofBJL4, mainland China
ShenzhenMetro Line 4,mainland China
LondonOverground,United Kingdom
Stockholm Metro,Sweden
MelbourneMetro,Australia
HangzhouMetro Line 1,mainland China(1)
(1) The Concession Agreement with Hangzhou Municipal Goverment is subject to approval by relevant authorities in mainland China.(2) Shenzhen Metro Line 4 Phase 1 assets are owned by the Shenzhen Municipal Government. MTR Corporation (Shenzhen) Ltd took over the operation of Phase 1 in July 2010.(3) Rolling stock maintenance under a 50:50 joint venture between MTR Stockholm and Mantena AS.
Hong Kong railway operations and related businesses
Property ownership,management and otherbusinesses
Property development Railway subsidiariesoutside Hong Kong
7,412 1,927 4,670 14,009
7,445 2,062 3,554 13,069
8,255 2,383 4,034 279
8
Operating Profit Contributions (HK$ million)
Total14,951
The analysis of operating profit contribution indicates our strength and efficiency in core business operations. Hong Kong rail operations continue to provide steady returns as the local economy gains strength. Property reflects our strong recurrent base of ownership and management income and the demonstrated continued profitability from sales in completed developments. Railway subsidiaries outside Hong Kong continue to gain strength.
05
About this Report
From the Chief Executive O
fficer
Glob
al Organisation
RiskEngagem
entLow
Carbon FuturePerform
ance Metrics
Corporate Governance
Public Policy
Sustainability Business Drivers
Recognising Challenges
Sustainability Issues
Business IntelligenceOur business intelligence arises out of the many systems, guidelines and practices we employ to make informed business decisions. We optimise the embedded resilience of these tools and leverage intelligence to develop and initiate timely adjustments to keep pace with rapid social change, as seen during the year.
While these platforms in themselves are fact-based, it is the interface of knowledge, ethics and our Vision Mission Values (VMV) that transforms management into sustainable development.
Corporate Governance
Public Policy
Public policy invites collaborative intelligence, involving more than single entities or governments or ways of doing things. We see our most effective contribution to policy and its development by sharing our professional expertise with relevant parties, government departments or industry bodies. We bring best practices to the table at the early stages of planning and development, seeking consensus on sustainable solutions. As an example, we offer advice to Hong Kong city planners on
implementing government’s Hong Kong 2030 Vision and Strategy and the Second Railway Development Strategy. Both these policy documents give focus to rail as the backbone of transport infrastructure for urban growth.
In other areas concerning public policy influence, we join local and regional professional and industry bodies, such as the Hong Kong Green Building Council. With them we engage in constructive dialogue covering issues including climate change, air quality, carbon emissions, green buildings and environmental conservation so as to preserve Hong Kong’s resources and heritage for future generations. We also work in partnership with a number of organisations that focus on the future role of the transport industry in global public policy, such as the International Association of Public Transport (UITP), the C40 Climate Leadership Group and its delivery partner, the Clinton Climate Initiative, a programme of the William J. Clinton Foundation.
Sustainability Business Drivers
Our unique organisational footprint identifies us as a community asset that operates on commercial principles. This commits us to a social contract that embodies our corporate vision to be a globally recognised leader that connects and grows communities with caring service. In parallel, it directs stewardship of organisation and drives business strategy.
The following form the core tenets of sustainability practices that support delivery of this social contract.
We recognise that good corporate governance is fundamental to sustainability. Underpinned by the commitment to ensure high standards of corporate governance in the interest of shareholders, and considering the continuous development of our business activities and changes in the regulatory regime, we devote considerable efforts to designing and implementing effective governance systems, practices and procedures. The Corporate Governance Report of the 2010 Annual Report sheds light on these initiatives.
The Corporate Governance Report highlights the enhanced corporate governance framework. This includes the distinct and separate posts of the non-executive Chairman and the Chief Executive Officer, and the respective responsibility and the inter-linkage of the Board and the Executive Committee in managing the organisation. It also covers the functions of key Board Committees, the principal internal controls, systems and practices such as risk assessment and management, and the governance of subsidiaries and affiliate companies. Communication with shareholders is also addressed. The report is available on our corporate website, www.mtr.com.hk.
06
Risk
We view sustainable development as a resilient process that balances business objectives and stakeholders’ interests within a holistic management framework. This framework, the SCA model, drives the business case through continual management of interacting risks, stakeholder interests and our corporate strategy.
Sustainable Competitive Advantage ModelSustainable Competitive Advantage
The Sustainable Competitive Advantage (SCA) model is our business intelligence architecture. The model combines formalised risk management and stakeholder engagement processes with our unique VMV to create competitive advantage. It drives management decision processes, embedding the business case for sustainability in day-to-day operations.
The risk management process reflects our established Enterprise Risk Management (ERM) framework. It operates within a system and hierarchy that effectively addresses risk in relation to its impact on business, the most important being addressed and reviewed at senior levels on a regular basis.
Stakeholder engagement operates within a more fluid environment in which divisional or even individual departments establish their own particular engagement process to communicate with, understand and reflect stakeholders’ interests. The process itself is uniform, that is, it identifies and prioritises expectation and perception gaps, assigns ownership and creates a series of mitigating treatments to close gaps. Actions are monitored and reported to senior management. Several divisional engagement programmes are in progress and new ones were introduced during the year to cope with the increasing scope and scale of business activities. These are discussed in the Engagement section of this report.
Our VMV and corporate responsibility are the values and ethics filters through which we engage stakeholders, manage risk and develop our corporate culture. Increasingly, they are the yardstick by which stakeholders measure us and serve as our preserve of goodwill with society.
Identify and Prioritise
Actions
Monitor and Report
STAKEHOLDERENGAGEMENT
CorporateStrategy/
VMV
ClosePerception
Gaps
Identify and Prioritise
RISKMANAGEMENT
Take Action
Materiality, Inclusivity and Responsiveness The SCA model provides a clear methodology through which all issues material to the organisation are identified, prioritised, owned, managed, monitored and reviewed. Our sustainability website presents a graphic version of the SCA model that details the processes through which the issues of materiality, inclusivity and responsiveness are managed.
During the year, changes within our risk portfolio highlighted formidable challenges. Commencement of rail construction activities, increased social demands and regulatory changes prompted priority focus on several heightened risk issues relating to rail projects and property development. These changes directly affected stakeholder engagement activities and direction, resulting in the introduction of new management initiatives. The key decisions now lie in how and where we effectively allocate the necessary resources and the means by which we address issues.
Policies and Code of Conduct
Our corporate policies are the software that define how we grow as an organisation. They improve stewardship by directing decision processes, ensuring
transparency of actions and encouraging delivery of best practices. Our policies span a broad range of activities covering business ethics, staff conduct, employment and human resources practices, environmental and supply chain management and safety.
The Code of Conduct is the baseline in corporate conduct. The Code applies to all employees in Hong Kong and entails briefings and renewed sign-on every two years. With this individual commitment, employees pledge to best practices and expectations of conduct.
The Code itself is reviewed on a regular basis to keep it timely and in pace with organisational change and employee expectations. For example, a simplified Chinese-language version is issued to our wholly owned subsidiaries in mainland China. All global subsidiaries are required to comply with relevant local laws and regulations. The core tenets of integrity, ethics, personal conduct and respect remain consistent.
07
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
At the conclusion of 2010, our enterprise risk map profiled us as an organisation challenged by an operating environment of growing regulatory and social pressures across all our businesses. We face increased constraints in skills, expertise and resources, affecting the planning and delivery of new rail projects and business expansion. Escalating customer expectations are also testing our service
Recognising Challenges
We choose to establish performance targets with a strong sense of certainty, usually within a 12-month time frame. This enables continued efficiency in resource use and identification of appropriate work methodologies and points to where management attention is required. This continuous improvement approach proves most effective in the context of the broader business environment that, in itself, thrives on speed and agility to keep pace with the rapid regional developments that impact Hong Kong’s service-based industries.
Successful application of this continuous improvement approach is demonstrated in our consistent improvement in energy efficiency, in particular for rail operations. Since 2005, the several initiatives undertaken have achieved significant improvement in rail asset performance. In 2010, efficiency stood at 4.83 KWh per revenue car km, continuing the five-year improved performance trend.
Continuous improvement management also serves as a powerful tool to reward and motivate staff. Keeping targets within a short time frame focuses and directs work practices. We use the SMART approach, that is, specific, measurable, achievable, realistic and timely to ensure clarity, ease of application and promotion of best efforts.
Targets and Continuous Improvement
The corporation works under the culture and management approach of continuous improvement. The overall objective in setting targets is to establish small, achievable work practices and the systems that generate measurable improvement over time. With this approach, we are realistic and focused, fostering efficiency and agility in work practices.
Continuous improvement aligns with our use of targets and target setting. It also brings a more immediate dimension to setting short-, medium- and long-term sustainability targets. As short-term targets are achieved or not achieved, subsequent longer-term targets can and do change in order to assure that continual improvement is the overall priority and sustainable development remains the goal.
08
Efficiency in MotionThe electronic footprint of the rail network in operation is an exercise in maximum efficiency at work. One movement triggers a cascade of actions to ensure smooth delivery of safe, reliable and on-time passenger services. Signalling works in milliseconds; trains move in synchronised timing; lines interchange in minutes.
Behind this synergy is a well-developed network of protocols, technologies and business intelligence that focus on the optimisation of the many components that comprise this functioning network. Teams of engineers carefully orchestrate studied improvement, collaborating closely with the front line to identify and manage potential risk and opportunity. Safety, traction, maintenance, signalling, train service monitoring and information dissemination are in themselves complex systems managed for their own continuous improvement.
Tsing Yi Operations Control Centre
better working relationships, leveraging of existing project competencies and the development of a skilled and committed workforce.
Reading across, these risks share common elements in the economic, social and environmental issues identified as the priority business risks to our sustainable development. These include such areas as economic viability, safety, patronage streams, staff development and environmental compliance. The 2010 update of our organisational sustainability risk issues, including KPIs and performance measurements, and the year-end snapshot of safety performance and climate change risks are on pages 13 and 32 and page 25, respectively.
In 2010, the corporation was named the “Overall Winner for Outstanding Contribution to the Industry”, a coveted award of the internationally recognised Institute of Risk Management.
capabilities. These risks challenge core business activities, in particular our service standards, resources management and growth prospects.
Taking this profile in the broader context, we operate within the dynamics of an increasingly assertive Hong Kong society that seeks to participate in and direct public policy. Growing concerns over heritage, the environment and social aspirations are changing the business and political landscape. As a community asset, we are at the front line of expected leadership in bringing about change.
How we manage is telling of our organisational resilience.
Risk Management Framework
The Enterprise Risk Management (ERM) framework formalises the recognition and management of the risks to our organisational sustainability. Since its introduction in 2006, it has evolved into a disciplined and measured corporate stewardship strategy. As decision makers, we appreciate:
• The no-surprises management approach. Risks are identified and managed on a timely basis and monitored on a continual basis.
• The ability to allocate resources appropriately. Efficient allocation reduces costs in resources and their management.
• The benefits of resilience. The framework monitors and analyses the effectiveness of our responses to change.
The ERM framework is simple and practical. It currently encompasses over 20 key business areas with over 700 business risks and some 3,000 multi-discipline risks captured within one platform. A detailed description and graphic illustration of the ERM framework and its processes are presented on our sustainability website.
The Enterprise Risk Management Framework
Top 10 + Hot SpotsThe Board (annually)
Executive Commitee (6 monthly)
RISK MONITOR AND REPORT
Top 50 Enterprise Risk Committee (3 monthly)
Divisional Risks
Business Units (Hong Kong,
mainland China and overseas)
Business Development Environment
The pace and scope of delivering five new rail lines in Hong Kong over the next decade leads us into a more complex arena of risk assessment and management. Controlled scaling of new project works and the expertise to ensure areas such as programme, safety, crisis response capabilities, environmental stewardship and local community inclusion prompt the deliberate rethink of how we are contracting and delivering these projects.
We also recognise the opportunity and costs of parallel construction. While benefits arising from shared knowledge and economies of scale across projects leverage opportunities, cost overruns and programme delays within any one rail project can directly impact similar areas in interfacing projects. Such synergies establish a further dimension to the risk and opportunity portfolio, the full impact of which we have yet to realise.
The rapidly changing regulatory and business environments linked to our franchises outside Hong Kong bring greater risk exposure as we seek portfolio expansion. As well, managing current contracts and business partners calls for
09
Enterprise RisksE1, E2, E3, E4
Business Risks
ProjectRisks
RailwayOperationsSafety Risks
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
10
It is an early start when it comes to managing the scale and complexity of risks posed by construction of the new rail lines. “Although safety risk awareness has been part of corporate culture for over two decades, our whole approach to risk management has notched up a gear,” says Andrew Johnson, Engineer - Project Risk. “It’s no longer enough to track and control risks in a single project. We now need to consider interaction of common risks across multiple rail projects, some of which are huge in scope.”
Key project risks are identified and registered at the onset of each project and given oversight at executive level through the Enterprise Risk Management framework. The initial risk register, developed to identify and quantify the project’s risk, will typically scale up to 40 feature-specific registers by the time construction commences. “Having up to 100 risk registers would not be uncommon with a project like the Express Rail Link, where scope, complexity and ground conditions give rise to a high degree of uncertainty,” he adds, giving some context to the challenges faced.
“Risk is decisive at procurement. With so many closely timed projects, we are looking to save costs through economies of scale. Inflation in materials and labour rates are some of our biggest concerns at the moment.” The application of target cost contracts is also proving beneficial. “This suits the complexity issue. It incentivises co-operation between contractor and employer for identification and control of risks through a pain-share,
gain-share mechanism. Risk awareness is strong and delivers risk control more cohesively with joint participation.”
Construction sites pose another challenge. “Preventing catastrophes like a tunnel collapse or a building next to our site being damaged beyond use keep our risk registers very much alive. We are more than vigilant and demand the same of our partners. A lot is at stake here.”
Efforts are being recognised. “By the end of 2010, we had commenced construction on two of the five rail lines. A further two were approved by government and the last is well into the legal process for approval. This is quite remarkable when you think about the challenges we face.”
“We now need to consider interaction of common risks across multiple rail projects, some of which are huge in scope.”
Decisive Risk Management
Tunnel excavation works on the West Island Line
11
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
sensitivity to expectations at the very local level, an internal resilience to disruption consequences and, importantly, an ability to execute contingencies smoothly when circumstances demand.
Safety
The programme for construction of our rail projects commits many more thousands of workers to our sites over the next ten years, exponentially increasing our safety risk exposure. With contractual compliance committing our supply chain and business partners at the procurement stage already well developed, site-based practices that reward best behaviour are a viable addition to safety mitigation measures. There is a recognised need for business intelligence behind these practices to enable cross-project risk learning and continuous improvement as projects progress.
Economic
Recent changes in public policy, industry regulations and societal aspirations are changing ‘business as usual‘ in property development across Hong Kong. Announced changes in development directives by government will transform current practices. While we agree in principle with continuous improvement to provide quality and sustainably built environments, we are taking action to overcome the significant challenges to our rail and property projects in terms of design, technical feasibility and profitability.
Looking outside Hong Kong, a new thinking to securing concessions and growing an international presence is in progress. While ‘asset light‘ remains the focus strategy in more mature markets and investment partnerships the opportune strategy in mainland China, growth hinges on optimising established relationships and projects. We acknowledge the need to leverage our current position and foster the agility to extend our competencies and experience further afield. Developing a rail plus property model in mainland China is also under consideration.
Sustainability Issues
In witnessing the year’s changes in the general business environment and with a younger, more empowered and connected segment of society emerging as a serious organisational stakeholder, an acute awareness of the potential impact on sustainable development has given us pause when assessing what such developments hold.
The following social, economic and environmental challenges share our insight into these developments and the broader context in which corporate risks have emerged or evolved over the past year.
Social
Staff are the face of our organisation. Thinking beyond customers, engaging the broader community and embracing social aspirations is the new normal in services delivery. As management, we are tasked to nurture a more stable, agile and innovative workforce and craft our human resources strategy from this perspective.
In terms of organisational development, we are in a competency race to deliver business commitments. Executing seamless management succession, enhancing existing competencies and attracting the talent and professional disciplines all underpin our ability to deliver. We need to think in terms of several thousands of new positions over a short period of time and in different markets.
To our customers, local communities and broader society, our rail services are part of the fabric of daily life. Disruption to the pattern incurs consequences that affect our license to operate. An enhanced management approach with particular emphasis on communication necessitates
Environmental
Rail construction, by its nature, disrupts the environment in different ways and at different intensities over the project delivery process. Our environmental reputation is on the line as we build five different rail projects across Hong Kong. While we have anticipated and minimised environmental impacts at early stages in design and project planning, the ongoing challenge is to communicate clearly our activities and expected outcomes, to engage for consensus on further actions and to learn across projects for best practices in future. This involves our people, local communities affected by disruptions, our supply chain, government departments, pressure groups and NGOs to explore collectively the optimal environmental solutions as each rail project is planned, developed and implemented.
“In witnessing the year’s changes in the general business environment and with a younger, more empowered and connected segment of society emerging as a serious organisational stakeholder, an acute awareness of the potential impact on sustainable development has given us pause when assessing what such developments hold.”
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Priority Sustainability Business Risks and Performance 2010
Priority Business Risk Key Stakeholder Key Performance Indicator 2008 2009 2010
Economic Financial stability
Government Shareholders Business partners
Operating profit from railway and related businesses before depreciation, amortisation and variable annual payment arising from the rail merger(1)
9,325 9,515 10,917
Social Maintaining passenger numbers
Shareholders Staff
Passenger trips (weekday average in million)
4.27 4.33 4.62
Maintaining rail and other transport services patronage
Passengers Customer Service Pledge items achieved:(a) Train service delivery (%)• Island, Kwun Tong, Tseung Kwan O,
Tsuen Wan, Tung Chung and Disneyland Resort lines and Airport Express
• East Rail Line (including Ma On Shan Line)
• West Rail Line• Light Rail
99.9
99.9
99.9 99.9
99.8
99.9
99.9 99.9
99.8
99.9
99.9 99.9
(b) Passenger journeys on time (%)• Island, Kwun Tong, Tseung Kwan O,
Tsuen Wan, Tung Chung and Disneyland Resort lines
• Airport Express• East Rail Line
(including Ma On Shan Line)• West Rail Line
99.9
99.9 99.9
99.9
99.9
99.9 99.9
99.9
99.9
99.9 99.9
99.9
(c) Train punctuality (%)• Island, Kwun Tong, Tseung Kwan O,
Tsuen Wan, Tung Chung and Disneyland Resort lines
• Airport Express• East Rail Line
(including Ma On Shan Line)• West Rail Line• Light Rail
99.7
99.9 99.8
99.9 99.9
99.7
99.9 99.9
99.9 99.9
99.7
99.9 99.9
99.8 99.9
(d) Train reliability (revenue car-km/incident)
• Island, Kwun Tong, Tseung Kwan O, Tsuen Wan, Tung Chung and Disneyland Resort lines and Airport Express
• East Rail Line (including Ma On Shan Line) and West Rail Line
2,296,511
1,906,355
1,926,928
2,636,479
2,459,083
3,813,015
Developing and retaining staff
Staff • Staff turnover rate (%)• Vacant posts filled internally either by
promotion or transfer (%)(2)
3.6 -
2.0 -
2.6 47%
Ensuring the health and safety of passengers, staff and contractors
(Expanded 2010 safety targets and performance presented on page 32)
Environmental Breaches of statutory environmental requirements
Government Legal compliance (MTR Corporation) - number of successful prosecutions
0 0 0
Contractors Government
Legal compliance (contractors) - number of successful prosecutions
1 2 2(3)
Long-term energy supply without renewables (GHG emissions)
Shareholders Passengers Customers Suppliers Community
Greenhouse gas emissions (tonnes CO2-e)
1,097,151 1,161,431 1,178,776
Climate change (response to climate change risks)
Staff Passengers Customers Community Suppliers Contractors
Annual review of risk - the annual review comprises a risk assessment and a continuous process of risk management actions
Review completed
Review completed
In progress
(1) Revised wording to reflect annual financial report adjustments to operating profit calculation criteria.(2) New performance indicator from 2010. (3) Rail operations contractor fined HK$3,000 for breach of Noise Control Ordinance. Property management contractor fined HK$7,000 for breach of Noise Control Ordinance. 13
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
The lessons learned from the media and the public and community reactions to rail projects have led to the formulation of more strategic and corporate-level stakeholder engagement programmes. The influence of social forces and, more recently, the sharp rise in expectations of our services are driving their development.
In formulating actions we first reviewed internal strategy and programmes. Several new initiatives are now in progress and established methodologies were enhanced to address engagement. We have also given due consideration to the recommendations made under the AA1000 stakeholder engagement gap assessment undertaken in 2009 by our Projects Division. We are now more inclusive in determining the scope of interests and constituents around issues. We are training our people to take independent decisions at the engagement front to ensure immediate and appropriate response when needed. More specifically, the ‘engage to change’ agenda is seen in the following stakeholder areas.
Our People
Our goal is to be a learning organisation. This corporate dynamic fosters collaborative work practices, independent thinking and continuous improvement.
It commits us to building a workforce that embraces change, thrives on innovation and fosters individual thinking.
Our strategy is to build a sustainable, more energetic and agile workforce and management team. To this end, we have in place the programmes and support mechanisms that promote fast-track career paths, diverse management opportunities and specialist training in professional and functional disciplines.
When nurturing our new generation of talent, we are aware of the different aspirations and workplace expectations. Efforts to provide socialised platforms and new technologies that encourage cross-discipline sharing and facilitate management communication are changing workplace practices. Use of online knowledge centres, such as the iShare, PropS and OK Mall is growing, with more communities of practice, added information sharing and extended users. Recognising the value of individual contribution and informal one-to-one mentoring programmes are forging better work relationships.
Underpinning the learning ethos are our corporate values and the growing sense of corporate responsibility. Introducing this software into the workday culture helps guide the needed understanding of social expectations and how we deliver our corporate vision.
Engage to Change
Building Consensus
Stakeholder Panel 2011
The Business of Engagement – A New NormalGlobal social and environmental concerns are changing the status quo and questioning, if not challenging, responsible corporate citizenship. Local communities, NGOs and vested interests are increasingly the arbitrators of best practices, setting new standards while at the same time localising expectations. Businesses, not regulators, are the expected agents of change.
In a similar fashion, we are affected by the growing local social movement, often pushing the limits on our stakeholder relationships. For example, when outcomes have fallen short of expectations, lessons have been learned and applied in regard to our public and stakeholder engagement on new rail projects. We recognise the need to work smarter and communicate better given the scope and scale of future activities and, in response to social trends, construct a more holistic strategy that responds to extended societal expectations.
Engage to Change
08
0.75
Staff Productivity Earnings per employee (Hong Kong businesses excluding
property development)
10
0.80
09
0.75
HK$ MILLION
09
5.8
2.62.2
6.4
10MAN-DAYS
Market average
MTR
Training Man-days Per Employee(excluding offshore employees)
14
Engagement
Station commercial and retail-related business
China and international business
Corporate management and support department
Property and other businesses
Projects
Offshore employees
Operations
EMPLOYEES
20,150
8,632 8,914
6,6721,7941,3621,291
7,0591,3651,3191,242
09
Total Staff Strength
256212
239294
10
Total20,501
PERCENTAGE (%)
16.5
7.08.9
67.5
65.0
8.4 9.217.3
Sweden
China
Australia
Hong Kong
Others
Global Staff Distribution
10
09
0.10.1
VMV Is Us!To reinforce understanding and commitment to practise VMV amongst staff, different types of initiatives have been introduced. Creative and artistic competitions, sharing success through story telling and looking beyond the company for best practices are a few of the many corporate-wide programmes to encourage innovation, teamwork and enterprising spirit.
Smaller initiatives prove just as powerful with sports competitions, chat sessions with senior
management, informal gatherings and experience-sharing sessions organised by different departments. These keep the VMV personalised and part of individual workplace practices.
The team from the Procurement & Contracts Department like to combine vitality, purpose and innovation when expressing VMV. Their desire is to involve everyone and have fun in the process. Group songs that reflect the corporate values, outdoor
programmes with inspired work examples and even party hats to add cheer to workplace festivities show their VMV spirit.
VMV team from the Procurement & Contracts Department
15
“Our strategy is to build a sustainable, more energetic and agile workforce and management team.”
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
A new normal is emerging when it comes to engaging passengers, community and even public institutions. “Society is changing and with it the way people see the MTR. There is a transition to a strong identity with local heritage, culture and the environment,” says May Wong, Deputy General Manager - Corporate Relations in Hong Kong. “Our challenge is how we work with this brave new world of a younger, more vocal and assertive generation that holds our city’s future in their hands.”
“Entrenched communities expect more positive action,” adds PH Tang, Project Liaison Manager. “What has been done in the past is just not good enough. There is this demand for action that is more favourable towards the concerned communities. We have to be more responsive and think on our feet.”
To this end, the internal shift in engagement strategy is accelerating. “Our division is pioneering some new programmes to deliver full-scale community engagement. Everyone is being trained to be a communicator and liaison officer. It is part of the job now,” says PH.
When communicating with the younger generation, social media and cool infotainment about the company are gaining stride. A more human face to the MTR is emerging.
The MTR story needs to be told differently now, May and PH both agree. “We need to be engagement champions, be more transparent about what we do and harmonise with aspirations,” says May.
“Construction of the new rail projects is a case in point. We are being far more active in mitigating disruption to communities now that we are building in their backyards. Our contractors are also being enlisted to help,” PH elaborates.
“It’s about letting society know that we are listening and doing everything to the best of our abilities. But, sometimes expectations are greater than what is possible. In bridging the public perception gap, we must provide sound evidence and convincing reasons and demonstrate our sincerity in the process. This must be how we approach engagement going forward,” suggests May. “In the end, it’s about gaining the public’s trust as this new social order takes hold.”
“Society is changing and with it the way people see the MTR. There is a transition to a strong identity with local heritage, culture and the environment.”
The New Normal in Communication
Community Liaison Group meeting with local community on West Island Line
16
17
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
of non-technical language enables mutual understanding of intentions and actions. These changes augment our regular surveys, feedback channels and the many customer service programmes.
These enhanced tools also provide a powerful communication platform when engaging stakeholders on our network expansion and property developments. Inclusion of the wider spectrum of stakeholders and social interests is now standard. Using social media and internet channels captures this wider spectrum of stakeholders and, importantly, provides accessibility to the databank of factual information on projects. We continue with our focused people-to-people community liaison meetings, initiate NGO and concern group sessions, maintain close cooperation with government departments and continue dialogue with district council representatives.
Safety on Site
As contractors’ rail construction workforce swells to several thousand on each project, managing workplace safety takes on new meaning.
Incentives play an increasingly important role in on-site activities, where most accidents occur. Programmes that recognise and financially reward safe work practices
are now standard. Adopting the ‘near misses reporting’ programme that identifies weakness in the safety awareness chain plays an important preventative role. Falling materials, workers tripping and falling and lifting operations are the most common sources of potential safety hazards. Eliminating these through proactive training and changed behaviour patterns saves lives.
As projects move at varying stages of construction progress, we are sharing and leveraging best safety behaviours across projects. Lessons learned from site accidents are instantly shared across project teams though online communities of practice and the knowledge platform, iShare. Appropriate checks and follow-up reviews ensure against same-mistake repetition.
Roofing the swimming pool complex at Kennedy Town Station, West Island Line
Passengers, Communities and Society
Bridging the gaps in dealing with diverse stakeholders’ expectations is restructuring our engagement approach. Internally, we are building a knowledge bank and work platforms to share information and insights across disciplines, projects and stakeholders. The aim is to use our reservoir of experience and our successes and failures to hone our capabilities and skills and to manage risk more effectively.
In finding better solutions and formulating response to external constituents about our rail operations and performance, we are taking a more holistic approach. The latest social media and internet tools provide new avenues for information dissemination and feedback on our operating performance. Our mediums of communication are more iconic and use
18
Our future is closely linked to how well we integrate with the communities we serve. During 2010, we reorganised the many community focus programmes under a single umbrella programme, Community Care Action. This change consolidates and co-ordinates efforts covering youth, local community outreach, arts and culture and the environment and healthy lifestyle. As well, the programme coordinates management and effectiveness in purpose while raising staff awareness to the opportunity range for participation. During the year, some 198 community service projects were staged, involving over 4,400 company volunteers. Several of these projects are cited on our website.
Supply Chain
Anticipating the needed resources and expertise to deliver the new rail projects to cost and schedule is changing our supply chain management. We now actively invite international collaboration with local contractors to attract anticipated skills requirements and we use economies of scale in resource management. We are enhancing our procurement system with major reviews on safety, quality and environment to tighten performance standards and quality of product. Significantly, we are restructuring contractual terms to establish an equitable basis that reflects the risk exposure in the pace and scale of our projects.
As a result, the relationship with suppliers and contractors is changing. We initiate informative and continuous dialogue with contractors in communicating project needs and specifications. We seek closer co-operation on design and construction, bundle contracts where opportune and use feedback from contractors for other project efficiencies. We are experimenting with pooling contractors’ expertise for time-scaling advantage. We use our own
best practices as contract standards, partnering with suppliers and contractors to support delivery to expectations.
Safety
The 2010–2012 Corporate Strategic Safety Plan refocuses our safety strategy to fit with the changing profile of the company. It reflects growth in mainland China and overseas markets, as well as the construction of new railway lines in Hong Kong. It also addresses a number of the more immediate challenges we face.
Our position is to first mitigate safety risks across the life of the asset by designing out risk at early stages of planning. When addressing construction and operating risks, we contractually share responsibility amongst our partners, contractors and suppliers. Expectations are defined through clear milestone achievements, site and performance audits and a partnering relationship to encourage best practice. This ensures contractor competence and integration of safety standards at the workplace.
Our challenge is to push the safety mindset beyond contractual and operating compliance. It is a continual improvement process requiring attention to human behaviour and the operational interface. For example, we now track near misses on site to understand behaviour patterns and anticipate potential hazards. In our property development business, we work with developers to review procedures and establish guidelines that enhance safety practices on sites.
With rail passenger services, safety continues to focus on educating passengers to use the railway properly. A multi-aspect safety education and promotion programme is launched annually to address common safety problems, such as rushing in stations, continuing to board while train doors are closing and inappropriate escalator
use. Our purpose is to encourage safe passenger behaviour through continual education.
We are on track to completing in 2011 the installation of automatic platform gates at eight outdoor rail stations. We are also modifying the platform end gates on the East Rail Line to reduce the likelihood of passengers trespassing onto the tracks.
The Corporate Strategic Safety Plan is reviewed annually to validate its continual suitability.
“Our challenge is to push the safety mindset beyond contractual and operating compliance.”
19
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
Building Consensus
Acknowledging that engagement is flexible and often delivered in different ways and for different purposes, we have further developed specific engagement groups and tools. The objective is to communicate with target stakeholders in an appropriate manner and build the foundation for consensus.
Rail Passenger and Customer Services
Caring service continues to drive our customer services strategy. For the rail network, new campaigns look to extend caring service to customer behaviour, such as saving priority seats for the disabled. Our rail passenger–nominated best station staff contest continues to grow with more awards and nominations to publicly recognise service excellence.
Increasingly, leadership and more decisive action in passenger management and the preparedness in contingency actions are being expected of our station teams.
Training in these areas is under way to give staff the confidence and agility to enact leadership when needed. In parallel, enhanced information tools, such as iconic signage boards and simplified display messages, are being installed in stations across the network ready for implementation in the event of an emergency.
As we plan the refurbishment of our rail assets over the next decade, we are focusing on the hardware of passenger engagement – technology, station environments and train travel – tuning into the fast pace of social changes and services expectations. As each station is upgraded, we observe and solicit feedback, incorporating best practices and introducing new ones. We collaborate with our supply chain to explore innovation for best technology and equipment as we upgrade. Our recent focus on personal communication technologies, for example, now connects passengers across our network to the highly socialised and global online community.
The Environment
In addition to the mandatory Environmental Impact Assessment (EIA) for project approvals, several initiatives are in progress to educate, communicate and build consensus on best solutions to avoid or mitigate impacts caused by the planning and construction of rail projects. In the major public interest area of trees for example, the community of practice on tree management was established. This practice group invites sharing of information in regards to the trees affected by construction, as well the preservation of the unique tree walls and old tress around our construction sites. Face-to-face meetings with harbour-front pressure groups and NGOs have been productive in the planning of future cross- harbour works and tunnelling. Perhaps the most significant of public engagement initiatives is the translation of very technical EIAs into an online format in layman’s language that visually projects the environmental changes along the new rail lines.
Links to project-specific EIAs are located at www.mtr.com.hk/eng/projects
Issue 2006 2007(1) 2008 2009 2010
GHG Emissions Total (tonnes CO2-e) Corporate-wide 315,066 675,560 1,097,151 1,161,431 1,178,776
Electricity Consumption
Total (MWh) Operations
• Heavy rail
• Light rail + bus
778,442
-
780,673
-
1,290,278
46,738
1,297,006
47,020
1,314,659
49,660
Total 778,442 780,673 1,337,016 1,344,026 1,364,319
Per revenue car km (KWh/car km)
Operations
• Heavy rail
• Light rail + bus
5.73
-
5.68
-
4.86
5.20
4.85
5.25
4.82
5.18
Total 5.73 5.68 4.87 4.86 4.83
Waste Generation
Metals recycled (tonnes) Operations 1,573 1,650 2,035 3,208 2,784
Spent oil recycled (litres) Operations 20,610 36,212 75,910 88,164 94,780
% Total 100 100 100 100 100
Water Usage Water consumption (m3) Operations 290,634 347,771 766,157 860,386 836,877
(1) Excludes KCRC data post rail merger.
Five-Year Key Environmental Data
20
Virtual Journey
Connecting customers to the information highway is our latest in customer services innovation. The MTR Mobile app provides the one-stop location to find rail network information, station locations, street maps, local landmarks and user’s choice in retail and entertainment centres. The ‘Journey Planner’ feature helps to optimise system travel and track the shortest routing between destinations along with maps, fares and operating hours. Another tap and see comments from fellow users and their ranking of hot spots near a selected station for the latest in restaurants, entertainment and retail.
Planning the afternoon’s activities in Central
PERCENTAGE (%)
Market Shares of FranchisedPublic Transport in Hong Kong
10 37.3
15.1
3.3
38.942.6
15.13.4
Trams & ferries
Mini-buses
Buses
MTR
44.3
09
WEEKDAY AVERAGE THOUSANDS
MTR Passenger Numbers
10
Total4,635
118319
3,770433274
09
827
107402240
3,545
4,329
Cross-boundary service
Buses
Airport Express
Intercity
Light rail
Domestic service
In considering our position within the communities we serve, our goal is to be barrier-free and facilitate ease of services interface. Stations are redesigned to improve traffic flow and accommodate specialist groups, including the elderly, young and disabled. Connectivity to the immediate community and other transport modes is a core element of design and the seamless street access and pedestrian walkways increasingly figure as part of the network’s amenities.
21
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
New Rail Projects
We are on track for several years of parallel planning and construction of rail projects in Hong Kong. We will transform entire communities and business centres in the process. Adeptly managing change and the scale and pace of delivery demands a paradigm shift in management thinking.
‘New Lines New Minds’ captures the spirit of the transformation programme formulated to address the external challenges and organisational issues related to the new rail projects. It introduces the entrepreneurial mindset to managing projects and provides the platform to refocus and motivate staff on the complexities inherent in the building programme. It fosters innovation, cross-discipline collaboration, shared decision making and the ability to read across projects for knowledge.
To support transformation, the iShare knowledge centre encourages and facilitates user participation in project
discussions. As well, several communities of practice have been established and intense on-site skills mentoring and training support the programme.
During the year, with the understanding that each project carries its own set of constituent stakeholders, the formal stakeholder engagement groups, Community Liaison Groups, were established for each new rail project. Our success with the West Island Line in securing regulatory approval through community support and the continued buy-in as construction proceeds provides a working model for each group to apply similar collaboration in their respective projects.
Property Business
Having one of Hong Kong’s largest portfolios of managed properties, we carefully consider the lifestyle aspirations of our residents and tenants. Our management teams work directly with residents and tenants to adopt various
Caring ServiceMTR’s caring services now extends to the Pearl River Delta with our joint venture in the operations of the Shenzhen Metro Line 4 Phase 1. Operation of this five-station 4.5 km line marks the beginning of our hallmark customer services and commitment to safety and reliability for the extended Line 4 operations.
Behind the familiar MTR logo are several years of network planning, construction and intense training. In Phase 2, to be opened in 2012, stations are designed to maximise passenger flow and be energy efficient. Highly visible passenger information, infotainment points and convenient retail outlets will enhance the travel experience.
Staff competency is nurtured in the local training centre established for operations, station management and customer services. ‘Exchange students’ are frequently seen at Hong Kong headquarters to share specialist skills and our corporate culture.
Service staff at Fumin Station, Shenzhen Line 4
“‘New Lines New Minds’ captures the spirit of the transformation programme formulated to address the external challenges and organisational issues related to the new rail projects.”
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The Place to BeThe goal of having our stations as places to be, rather than places to pass through, drives our service vision. We think as customers, anticipating where and how we can deliver the best in travel experience and incorporate tomorrow’s aspirations into today’s practices.
We follow network improvements closely, maintaining flexibility and innovation to keep pace with changing expectations. Improved design maximises resource usage and energy efficiencies to reduce the carbon footprint. Remodelling customer areas creates inviting community spaces, encouraging social interaction. Current efforts focus on enabling the network system to keep pace with rapidly evolving technologies and the need for more iconic information points and local community connectivity.
Taking a break at Mongkok East Station
initiatives in improving energy efficiency and waste management programmes in estates.
At the industry level, regulatory goalposts are moving. Proposed new regulations and directives re-interpret the social and environmental benefits in property developments and will affect our future projects. We are actively pursuing public policy dialogue through industry bodies to build a consensus with regulators on the best way forward for the long-term sustainability development of Hong Kong.
Mainland China and International Business
Our business strategies in mainland China and in overseas markets are maturing. We recognise the influence diverse cultures and established work practices
have on integrating our performance expectations into local operations. Our engagement strategy supports our subsidiaries and affiliated franchises to grow their own culture and adapt MTR best practices where opportune. The newly developed governance framework for subsidiaries and affiliates is the latest in support mechanisms to this strategy. For our subsidiaries, this framework imposes certain key internal controls while encouraging development of their own corporate governance systems.
In mainland China, where a project’s scope generally includes long-term operational and maintence agreements, we engage more actively at the workplace and influence through introduction of best practices at the early stages of project start-up. Engagement is more comprehensive in terms of risk management programmes, staff
recruitment and training, as well as with operational maintenance, as we have seen with the recent operations and services assumption for the Shenzhen Line 4 Phase 1. These are modelled on our own Hong Kong practices.
In the mature transport markets of Europe and Australia, we work within the parameters of our concession agreements and engage where opportunity for added value is presented. In London, where we operate the London Overground Rail Operations Limited (LOROL) concession, this approach has brought significant improvement in performance, raised standards and higher profitability in customer services since operations commencement in 2007.
23
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
In January 2011, PwC convened the second independent stakeholder panel meeting. Following on from the first meeting held in late 2009, the theme focus was, “Is MTR delivering on its corporate promise?”. This promise is expressed as the company’s Vision Mission Values.
In this second meeting, panellists examined areas of social, economic and environmental priority that represent where the MTR interprets its own promise delivery points. These included such areas as staff development, community engagement, minimum wage, land bank, external market franchises, greening of the supply chain and managing the company’s carbon footprint. The purpose was to affirm agreement of external perceptions on the many areas, as well as field further issues of concern relevant to the panel’s representative perception of promise delivery.
Consensus held that the MTR is largely robust in its delivery on promise, as seen in its excellent customer services, active staff development and, to a degree, its efforts in community and supply chain engagement. Panellists held a good understanding of the scope, pace and scale of MTR’s new rail projects and the impact this is having on society as a whole.
The more important insights of the panel discussion were focused on the organisational leadership tools that promote MTR’s sustainable development and that of society and how the company is communicating the delivery on its promise.
A disconnect between sustainability leadership in the rail and property businesses was noted. Questions addressed this gap and the ability to implement a genuine organisation-wide sustainability agenda as a result.
Most insightful were discussions on the MTR’s communications with stakeholders and the public. A well-established and
systematic engagement strategy to drive communications is not apparent. Unevenness in communications was also noted. However, strong support from construction industry representatives was expressed in relation to the MTR’s recent public and local community efforts on new rail lines construction.
As with the previous panel discussions, this second session tabled thought-provoking insights into promise delivery and the gaps in perception between the MTR and the constituent stakeholder groups represented. It also revisited outstanding issues from the previous session, as well as confirmed where the promise delivery aligns, as seen in rail customer services and staff development.
A few issues merit further internal review, including a more visible, centralised and consistent engagement strategy, as well as consideration of the mediums of communication that influence perceptions.
This second discussion group closes the loop in the preliminary understanding of the perception gaps in the MTR’s delivery on its corporate promise. It also marks completion of the initial stage of introducing an independent stakeholder group of advisors to organisational sustainability.
Panellists:
Marieke van Raaij, Group Leader, Greater China, Towers Watson
Robert Seng, Deputy Project Manager, Sun Hung Kai Properties
Amie Lai, Environmental Affairs Manager, Swire Properties
Max Connop, Executive Director, Aedas
Christine Loh, Chief Executive Officer, Civic Exchange
Shirlee Algire, Group Sustainability and CSR Manager, Gammon Construction Limited
David Eldon, Director, Noble Group
Representatives of industry and business, public policy, human resources and societal advancement formed the panel. Discussions considered delivery within the context of the increasing social expectations of the MTR’s leadership as a societal asset and sustainability leader.
Stakeholder Panel 2011
24
Enabling the Low Carbon FutureOur network transforms urban environments dramatically. What we plan today, build tomorrow and use for the next century is shaped by how we respect and understand our societal role in Hong Kong and, increasingly, the Pearl River Delta. Our social contract binds us to building and operating mass transit systems that contribute to the sustainability of the communities we operate in, and, importantly, the low carbon future that is an imperative to urban environments worldwide.
To this end, we continually push innovation and responsible stewardship. Our consumption of natural resources, management of greenhouse gas (GHG) emissions and our respect for the ecosystems affected by our operations influences the collective environmental future.
Measuring Our Footprint
Managing climate change impact is an important component of our enterprise risk management. During the year, we identified a number of issues that merit mitigating actions or, at minimum, a preparedness to respond should the impact intensify. Amongst the more recent flagged issues are the effects of super-typhoon winds and water infrastructure. While no high or very high level climate related risks are reported in 2010, it has
been agreed by management to monitor and review the risks more frequently, due to increased visibility of climate change effects and the commencement of construction activities on our rail projects.
Greenhouse gas emissions for 2010 were marginally higher in most categories for the year, due mainly to inclusion of full- year results of the expanded rail network and additions to our managed property portfolio. The Greenhouse Gas Emissions Inventory table on page 28 details emissions changes.
Increased electricity costs
E3
Increased electricity use
B
C
PandemicsA
Additional ventilation and cooling assetsD
Increased deterioration of infrastructureE
Flooding affecting operationsF
Unforeseen regulatory pressureG
E4Reputation impacts
I J
K
Fire risks within North Lantau Country Park
Breaching environmental permits due to ecological collapse
L Rail buckling
H
Freq
uenc
y or
Lik
elih
ood
Consequence or Severity
B
A
C D
E
HI
F
G
LJ
K
E1 Very high risk
E2 High risk
E3 Medium risk
E4 Low risk
Climate Change Risk Map
Measuring Our Footprint
Mitigation and Adaptation
Transforming Carbon Management
Biodiversity
The Enterprise Risk Management (ERM) framework is applied to assess our risks in relation to climate change. The table above represents the latest risks ranked within an E1–E4 rating framework. All risks are allocated to relevant risk registers wherein the process of prioritisation, ownership, mitigation, monitoring and reporting is undertaken. This process is continuous and, like the ERM framework, is sensitive and responsive to the changing business environment and to the influence of stakeholders. The natural environment is considered a principal stakeholder in this process.
25
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carb
on FuturePerform
ance Metrics
Low Carbon Future
26
“It is the simplicity of the idea that makes it so extraordinary,” claims Dr Glenn Frommer of the Sustainability Development Department. “People not only need to see what their neighbourhoods are becoming, but also need to understand how and where the changes are taking place as these projects are constructed. A big concern now is what we are doing to keep the noise, dust and traffic under control.”
The Environmental Impact Assessment (EIA) online programme bridges the environmental information gap when engaging local communities and the many special interest groups across Hong Kong. In a few clicks, even the most internet-challenged can follow the rail alignment and navigate their way through the information.
“The plan is to simplify the increasingly technical environmental reports published around our rail projects and make the information widely available. One of the best features is that we explain what we are doing to solve a problem and show what we have accomplished as we progress. Getting to this point already involves expert opinions, our own assessments, the government’s Environmental Protection Department and public consultation, so that we are listening to all sides from the beginning,” Glenn added.
With local communities and green groups patrolling for better transparency of
actions and environmental stewardship, creating this visual roadmap explains the facts and establishes the baseline in communications. “This programme adds to ongoing local community exhibitions and activities, town hall meetings and our dialogue with concerned parties who seek better understanding of our actions. This is a big step in helping to clarify any misinformation and rumours.”
“It is the simplicity of the idea that makes it so extraordinary... People not only need to see what their neighbourhoods are becoming, but also need to understand how and where the changes are taking place as these projects are constructed.”
Checking environmental updates for the West Island Line
Environment Online!
27
About this Report
From the Chief Executive O
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Greenhouse gas emission reporting continues to improve and mature as a system. We significantly improved our ratings within the Carbon Disclosure Project (CDP 2010). We achieved the leading position amongst the rated Hong Kong reporters and ranked third in the globally measured Industrial – Road and Rail sector. While the CDP focuses only on disclosure of information, it is indicative of our improvements in governance and the robustness in the reporting systems for carbon footprint assessment.
Mitigation and Adaptation
Category Scope 2008 2009 2010
Fuel – rail operations and maintenance and in-house support
1 4,465 6,001 5,441
Fuel – feeder bus services 1 17,310 19,048 18,173
Refrigerants 1 - 14,397 14,194
Electricity – railway operations 2 827,732 863,918 856,302
Electricity – property management and investment
2 223,746 233,898 240,655(1)
Electricity – headquarters 2 14,701 15,120 14,014
Electricity – project site offices 2 0 0 2,197
Water consumption and sewage treatment 3 - 1,036 1,104
Waste disposed to landfill – railway operations and extension projects
3 8,068 5,543 24,131(2)
Corporate paper use 3 - 1,102 1,033
Staff flights 3 1,129 1,368 1,532
Total 1,097,151 1,161,431 1,178,776
(1) Expanded portfolio of managed and investment properties. (2) Construction work for West Island Line and Express Rail Link commenced.
Performance results for the year were slightly up in property electricity consumption due to the expanded investment and managed properties portfolio. Waste to landfill increases were due to construction commencement of the West Island Line and Express Rail Link projects.
Categories and scopes align with “The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard” (2004), jointly published by the World Business Council for Sustainable Development and World Resources Institute. Reference for reporting is also drawn from “Guidelines to Account for and Report on Greenhouse Gas Emissions and Removals for Buildings (Commercial, Residential or Institutional Purposes) in Hong Kong” (2010 edition), published by the Hong Kong Environmental Protection Department and the Electrical and Mechanical Services Department.
Greenhouse Gas Emissions Inventory (tonnes CO2-e) Hong Kong Operations
Electricity Efficiency Ratio of Rail Assets
6
5
4
4.83per revenue car km(KWh/car km)
0605 07 08 09 10
Corporate supporting units
Electricity Purchased
Property investment and management
Railway operations
Project site offices
77.45
20.99
PERCENTAGE (%)
09
1.46
0.16
1.56
10
76.73
21.65
Railway passenger services consume over 76% of our purchased electricity, creating a carbon footprint largely incurred for customer services delivery. The well-established Energy Management Committee manages rail systems optimisation and takes advantage of technology innovation for better asset performance. In early 2010, for example, the programme to install LED lighting in 136 trains commenced. Upon completion in 2014, a measurable reduction of 2,519 MWh each year in electric power consumption is estimated. This contributes to the consistent trend in improved efficiency we have achieved since 2005.
Under the HK SAR Government’s Scheme of Control, electricity supply is limited to two providers, neither of which offers alternative energy choices. Control of electricity consumption is therefore limited to the demand side. Yearly calculation of emissions also takes into account suppliers’ conversion factors.
28
Shared Living SpaceSome 10% of the world’s population of the endangered Black-faced Spoonbill winter in the Lok Ma Chau Wetlands, a protected conservation area adjacent to the rail network. The pivotal role this and nearby wetland habitats play in the regional biodiversity and sustainability of migratory birds is well documented.
As custodian of this fragile reserve, we are committed to maintaining its biodiversity and preserving it for the enjoyment of Hong Kong’s future generations. More so, as new rail lines take shape in the rural areas of Hong Kong, expanding our environmental footprint to include further wetland areas. Rail alignment changes and choice of construction methods have significantly avoided potential impacts during early planning stages. Current works are strictly controlled and monitored to avoid disturbance caused by noise or dust and to mitigate any ecological damage.
Efforts to implement active management have been rewarded with the continued sustainability of habitats and the annual return of migratory flocks.
Rail construction adjacent to the Mai Po Wetlands in Hong Kong
through adopting new technologies and improvement of current assets. As well, additional improvements to the signalling systems could create further savings in propulsion energy consumption.
For property development along our rail network, our Master Control document guides life-cycle energy efficiency best practices. We contractually require use of the Building Environmental Assessment Method certification, BEAM Plus, for all developments tendered from 2009 onwards. We also stipulate energy-efficient building infrastructure for our development projects.
When managing our properties, we address energy efficiency through small improvement programmes adopted across our portfolios. These include use of LED lighting in public areas, controlled lighting operation, energy efficient operation of lifts and escalators and the upgrading and optimising of the central
air-conditioning systems. We monitor and track performance through regular energy audits and equipment checks.
Use of high efficiency T5 tubes for fluorescent lighting, as well as incorporation of Variable Voltage Variable Frequency (VVVF) in lifts installation have been widely adopted as ongoing energy efficiency projects in our managed properties. Through such efforts, we have successfully achieved a total 0.9% reduction in energy consumption for all estates and investment properties in 2010 as compared to the previous year.
In early 2011, the Building Energy Codes were made mandatory in Hong Kong. These Codes are designed to lower Hong Kong’s carbon footprint through energy management of buildings. Since their introduction in 1998 as voluntary measures, we have progressively adopted the Codes, already surpassing the compliance baseline.
In anticipating the carbon footprint created by future operations of new rail lines, careful consideration and review has been given to the electrical and mechanical systems that have potential for energy savings and efficiencies. Several programmes are either in progress or planned that will bring significant improvement to future operations. For stations and rail infrastructures, these include fresh water-cooled air-conditioning systems for all new lines, district cooling for the Kai Tak Station on the Shatin to Central Line to optimise efficiencies through bulk cooling measures and the widespread application of LED lighting use in tunnels and stations. For better power supply management, initiatives such as wayside tractions energy storage using a super capacitator and a separate energy supply for kiosks and concessions are planned to save on maximum demand charge. To optimise rolling stock efficiencies, better traction efficiency will be realised
29
About this Report
From the Chief Executive O
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Global O
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Engagement
Low Carb
on FuturePerform
ance Metrics
The construction of new railway projects has a potential harmful impact on Hong Kong’s already fragile biodiversity. It has been confirmed by local environmental groups that project activities will bring destruction to land and marine habitats, significant tree felling and the infringement by construction activities on protected areas such as the Mai Po Wetlands.
In March 2011, the corporate-wide Biodiversity Policy was issued. It commits us to safeguarding the environmental heritage against impacts caused by
Biodiversity
Green MobilityLOHAS Park, known for its forward thinking in putting environmental responsibility into action, has introduced yet another pioneering initiative to its green living agenda. An electric car has joined the security patrol, marking a first in utilising a zero-emissions vehicle in Hong Kong’s private housing management.
The use of electric vehicles for estate management is part of a wider corporate initiative to ‘green’ our fleet of service vehicles. Using EVs in estate management expands our well-established programme of EV use at rail depots. A fleet of 57 battery trucks and tractors provide green mobility for workers as well as goods and equipment delivery services within depot premises. This successful programme will be applied to all depots on the new rail lines contributing to our efforts in carbon footprint reduction.
Estate security patrol car at LOHAS Park
30
CUBIC METRES (m3)(1) Expanded portfolio of managed and investment properties.
Property investment and management
Total
Railway operations
Railway extension projects
Corporate support functions
Water Consumption
1,792,372
21,336
860,386910,650
Total1,899,032
836,877
20,902
70,993
970,260(1)
1009
participation, we optimise mitigation at all points of a rail asset’s life, in particular those related to the operational phase, where the majority of emissions occur. We believe this to be one of the first initiatives of its kind for the global rail transport industry and will contribute to the broader understanding of how and where carbon can be managed.
Our Climate Change and Biodiversity policies guide the thinking and management decisions behind the many programmes that bring our environmental stewardship to life. These policies are detailed on our sustainability website.
our operations. The Policy guides actions, including compliance, proactive management of sensitive areas affected by our activities and raising awareness amongst stakeholders and the public on the understanding of biodiversity and its implication to our living environment. With this centralised approach to management, the Policy will co-ordinate the sustainable planning of our built environments and bring the agenda for climate change mitigation to the front line of our rail and estates management.
Transforming Carbon Management
We recognise that life-cycle management of assets is pivotal to a low carbon future. Adopting this mindset is transforming strategy to spread carbon costs across the life of an asset.
Unique initiatives to this end are in progress to lay the groundwork for operational application and, in time, wider industry application. We are the first company worldwide to retrofit a rail station with the participation of the CCI Building Retrofit Program in co-operation with the Clinton Climate Initiative. Targeting the station’s building service equipment, we seek to improve the energy efficiency of the station and importantly, establish and share the model for future similar projects. The project is expected to be completed by mid-2011.
In new rail planning and construction, we are developing a protocol that attempts to predict and measure embedded carbon when building and operating a railway. The objective is to consider the life-cycle opportunities that lend themselves to carbon efficiencies. With this holistic approach that includes supply chain
Performance against Quantitative Safety Targets 2010
Maturity Matrix of BS 8900:2006 Guidance for Managing Substainable Development
Financial Performance
Economic Contribution
Independent Assurance Report
Responding to Stakeholder Expectations
CoMET Benchmarking Results 2009
Definitions
Hong Kong Operating Network with Future Extensions
We disclose our social, economic and environmental performance as a key component of our stakeholder communications strategy and as a supporting management dialogue to complement our annual financial report. We have been reporting our performance for over a decade and with each report seek to improve scope and depth of coverage. We frame discussions to reflect our sustainability business case and, increasingly, in the context of the expanding footprint of our operations.
on our business activities and operating franchises or subsidiaries outside Hong Kong is indicated as such when stated, principally in performance graphs and tables.
Although we are, in principle, confident of the integrity of the non-financial data used in the report, we acknowledge that there are limitations that can cause a degree of uncertainty, in particular, those that include accuracy and sampling by environmental measuring equipment; and data sourced from external entities and/or business partners where the company has no controlling interest in projects or contracts. Our practice is to keep within a 5% range in variance and state within data tables where variance is applicable.
We capture quantitative performance results using accepted standards and reporting measurements to assess the year-on-year internal progress and to allow both industry and broader corporate comparability. We also seek to capture the measured progress achieved through our continuous improvement management approach.
Basis of Reporting
When measuring and presenting our corporate sustainability performance, we use selected recognised global and industry standards or best practices. These include the GRI G3 Sustainability Reporting Guidelines, the CoMET benchmarking programme, BS 8900:2006 Guidance for Managing Sustainable Development and the World Business Council for Sustainable Development/World Resources Institute’s GHG Protocol: A Corporate Accounting and Reporting Standard.
The financial and economic contribution data covered in this report are extracted from the MTR Corporation Limited Annual Report 2010. The data is prepared according to and aligns with the accounting policies of the company’s financial statements. We align to the corporation’s 2010 fiscal year except where otherwise stated. Events and data of material value to the corporation after the 2010 year-end and before publication of this report are specified.
The social and environmental data is aggregated internally, from our business partners and from independent bodies. The external sources of such data are identified and stated, where applicable and verifiable. Data presented
31
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From the Chief Executive O
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Performance M
etrics
Performance Metrics
40
30
50
60
20
10
8
6
10
12
4
2
138.2
41.0
77.8
19.4
06 07 08 09 10
Turnover
HK$ MILLION09
18,797
3,32811,498
2,9281,043
10
3,715
12,459
10,144
3,200
Total29,518
45.3
77.3
21.5
Total144.1
10.5
12.8
Railway subsidiariesoutside Hong Kong
Station commercial and rail-related businesses
Hong Kong passengerservice
Property rental, managementand other businesses
Fixed Assets Growth
HK$ BILLION09 10
Service concession assets
Investment properties
Other property, plant andequipment
Debt Servicing Capability
PERCENTAGE (%) TIMES
Net debt-to-equity ratio (left scale)Interest cover (right scale)
Maturity MatrixPerformance 2007–2010
2007200820092010 Reporting
Review
Stakehholderengagement
Key drivers
Leadership, visionand governance
Managing risk
Sustainabilitydevelopment culture
Building capability
Key managementissues
Environmentalassessment
4
3
2
1
Indicator 2008 2009 2010
Passenger and public safety - Hong Kong operations
Fatality Bus Target Performance
0 0
0 1
0 0
Heavy rail Target Performance
0 1
0 0
0 0
Light rail Target Performance
0 0
0 3
0 1(1)
No. of injuries requiring hospitalisation per 100 million passenger journeys
Bus Target Performance
10.00 7.53
9.50 11.16
10.60 7.51
Heavy rail Target Performance
7.70 8.40
7.70 7.56
7.65 7.94
Light rail Target Performance
11.00 12.34
11.00 15.33
14.50 12.30
Staff Safety Fatality Corporate support functions Target Performance
- -
0 0
0 0
Operations Division Target Performance
0 0
0 0
0 0
Projects Division Target Performance
0 0
0 0
0 0
Property Division Target Performance
0 0
0 0
0 0
Property Division – subsidiaries in mainland China
Target Performance
- -
0 0
0 0
China and International Business Division(2)
Target Performance
0 0
0 0
0 0
Lost time injuries per 100,000 man hours
Corporate support functions Target Performance
- -
0.13 0.16
0.13 0.12
Operations Division Target Performance
0.56 0.44
0.54 0.52
0.56 0.48
Projects Division Target Performance
0.20 0.05
0.15 0.04
0.10 0.10
Property Division Target Performance
0.53 0.11
0.48 0.21
0.45 0.20
Property Division – subsidiaries in mainland China
Target Performance
- -
0.48 0.04
0.45 0.00
China and International Business Division(2)
Target Performance
0.31 0.22
0.31 0.32(3)
1.35(4)
0.85(4)
Contractor Safety Fatality Operating railway Target Performance
0 0
0 1
0 0
Hong Kong project construction – railway extension projects
Target Performance
0 1
0 0
0 0
Hong Kong property development and investment projects
Target Performance
0 2
0 7
0 0
Hong Kong property investment and management
Target Performance
0 0
0 0
0 0
Property investment and management in mainland China
Target Performance
- -
0 0
0 0
China and International Business Division(2)
Target Performance
- -
0 0
0 1(5)
Reportable accidents per 100,000 man hours
Operating railway Target Performance
0.23 0.14
0.21 0.33
0.34 0.12
Hong Kong project construction – railway extension projects
Target Performance
0.45 0.42
0.45 0.13
0.40 0.22
Hong Kong property development and investment projects
Target Performance
0.65 0.22
0.58 0.23
0.52 0.21
Hong Kong property investment and management
Target Performance
0.32 0.25
0.30 0.12
0.27 0.16
Property investment and management in mainland China
Target Performance
- -
0.30 0.00
0.27 0.00
China and International Business Division(2)
Target Performance
- -
0.50 0.02
0.50 0.07
(1) Fatality due to cyclist neglience.(2) 2008 and 2009 data include division and majority-owned subsidiaries. From 2010 onwards, targets and performance are based on amalgamation of data from division and all subsidiaries and affiliates.(3) 2009 performance restated because of late confirmation of accident cases, owing to the structure of the claims and insurance industry in some markets.(4) 2010 target revised to reflect full-year operation of rail concessions at Stockholm Metro, Melbourne Metro, Beijing Metro Line 4 and the commencement of Shenzhen Line 4 and Beijing Daxing Line.(5) Contractor fatality at Shenzhen Line 4 works due to welding accident.
Performance against Quantitative Safety Targets 2010
32
40
30
50
60
20
10
8
6
10
12
4
2
138.2
41.0
77.8
19.4
06 07 08 09 10
Turnover
HK$ MILLION09
18,797
3,32811,498
2,9281,043
10
3,715
12,459
10,144
3,200
Total29,518
45.3
77.3
21.5
Total144.1
10.5
12.8
Railway subsidiariesoutside Hong Kong
Station commercial and rail-related businesses
Hong Kong passengerservice
Property rental, managementand other businesses
Fixed Assets Growth
HK$ BILLION09 10
Service concession assets
Investment properties
Other property, plant andequipment
Debt Servicing Capability
PERCENTAGE (%) TIMES
Net debt-to-equity ratio (left scale)Interest cover (right scale)
Maturity MatrixPerformance 2007–2010
2007200820092010 Reporting
Review
Stakehholderengagement
Key drivers
Leadership, visionand governance
Managing risk
Sustainabilitydevelopment culture
Building capability
Key managementissues
Environmentalassessment
4
3
2
1
Principles Practices 2007 2008 2009 2010
Inclusivity Stakeholder engagement 3.7 3.5 3.6 3.6
Integrity Key drivers 3.6 3.6 3.6 3.6
Leadership, vision and governance 4.0 4.0 4.0 4.0
Managing risk 3.8 3.8 3.9 3.9
Stewardship Sustainability development culture 3.5 3.2 3.3 3.4
Building capability 3.0 3.3 3.5 3.6
Key management issues 3.6 3.6 3.6 3.7
Environmental assessment 3.8 4.0 4.0 4.0
Transparency Review 4.0 4.0 4.0 4.0
Reporting 4.0 3.8 3.8 3.8
Maturity Matrix of BS 8900:2006 Guidance for Managing Sustainable Development
Selected Financial Performance
33
About this Report
From the Chief Executive O
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Global O
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Low Carbon Future
Performance M
etrics
Issue 2008 2009 2010
Profit and Loss Account (HK$ million)
Turnover 17,628 18,797 29,518
Operating profit from railway and related businesses before depreciation, amortisation and variable annual payment arising from the rail merger
9,339 9,515 10,917
Depreciation and amortisation (2,944) (2,992) (3,120)
Profit on property developments 4,670 3,554 4,034
Interest and finance charges (1,998) (1,504) (1,237)
Change in fair value of investment properties (146) 2,798 4,074
Profit attributable to equity shareholders 8,284 9,639 12,059
Dividend proposed and declared (2,715) (2,977) (3,405)
Balance Sheet (HK$ million)
Total assets 159,338 176,494 181,665
Loans, other obligations and bank overdrafts 31,289 23,868 21,057
Deferred income 156 167 605
Total equity attributable to equity shareholders of the company 97,801 106,387 117,150
Financial Ratios Operating margin (including railway subsidiaries outside Hong Kong) (%) 53.0 50.6 37.0
Operating margin (excluding railway subsidiaries outside Hong Kong) (%) 53.0 53.5 54.9
Non-fare revenue as a % of turnover (excluding railway subsidiaries outside of Hong Kong)(%)
35.0 35.2 35.7
Net debt-to-equity ratio (%) 42.1 25.8 12.8
Interest cover (times) 6.0 7.1 10.5
Financial Performance
Issue 2008 2009 2010
Financial Performance Turnover (HK$ million) 17,628 18,797 29,518
Profit attributable to equity shareholders (HK$ million) 8,284 9,639 12,059
Return on average equity attributable to equity shareholders (%) 8.8 9.4 10.8
Interaction with Hong Kong, Asian and Global Economics
Number of staff 14,076 20,150 20,501
Staff costs and related expenses (HK$ million) (3,358) (3,387) (3,398)
Energy and utilities (HK$ million) (1,020) (1,020) (1,067)
Maintenance and related works (HK$ million) (856) (915) (912)
Stores and spares consumed (HK$ million) (411) (403) (421)
Total number of passengers - Hong Kong passenger services (million) 1,485.1 1,506.6 1,608.5
Share of franchised public transport in Hong Kong (%) 42.0 42.6 44.3
Interest expenses on borrowings (HK$ million) (2,207) (1,715) (1,399)
Dividends proposed and declared (HK$ million) (2,715) (2,977) (3,405)
Overseas tax paid (HK$ million) (2) (3) (4)
Government funding support recieved (HK$ million) 400 0 12,252
Economic Contribution
34
Inherent limitations
It is important to read the Report and selected data in the context of the Basis of Reporting and limitations explained on page 31 respectively of the Report. Social and environmental data is subject to many more inherent limitations than financial data given both their nature and the methods used for data determination, calculation or estimation.
It is also important that, in order to obtain a thorough understanding of the financial results and financial position of MTR Corporation, the reader should read the MTR Corporation Annual Report for the year ended 31 December 2010.
Conclusion
Based on the work performed and described in this report, nothing has come to our attention to:
• Indicate that the subject matter is not prepared, in all material respects, in accordance with the reporting criteria;
• Indicate that the information presented in the Report relating to the subject matter is not consistent with the findings of our work.
Restriction on use
Our report is intended solely for use by the Directors of MTR Corporation in connection with the Report and is not suitable for any other purpose.
PricewaterhouseCoopers Certified Public Accountants
Hong Kong 28 April 2011
Independent Assurance Report
To the Directors of MTR Corporation
We have been engaged by the Directors of MTR Corporation to perform a limited assurance engagement over selected data reported in the Sustainability Report 2010 (the “Report”). The selected data is the 2010 performance data as set out in the tables titled “Priority Sustainability Business Risks and Performance 2010” and “Performance Against Quantitative Safety Targets 2010” on pages 13 and 32 of the Report respectively (the “subject matter”) which are presented in accordance with the Basis of Reporting as set out on page 31 of the Report (the “reporting criteria”). Definitions of the subject matter are on page 39.
Directors’ responsibilities
The Directors are responsible for the preparation and presentation of the subject matter in accordance with the reporting criteria. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and presentation of the subject matter and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.
Independent accountant’s responsibilities
It is our responsibility to express a conclusion on the subject matter based on our work performed and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
We conducted our work in accordance with the International Standard on Assurance Engagements 3000
“Assurance Engagements Other than Audits or Reviews of Historical Financial Information”. This Standard requires that we comply with ethical requirements and plan and perform the assurance engagement to obtain limited assurance whether any matters come to our attention that causes us to believe that the subject matter does not comply in all material respects with the reporting criteria.
In a limited assurance engagement the evidence-gathering procedures are more limited than for a reasonable assurance engagement, and therefore less assurance is obtained than in a reasonable assurance engagement. The procedures selected depend on the independent accountants’ judgment, including the assessment of the risks of material non-compliance of the subject matter with the reporting criteria.
The overall objectives of our procedures were to:
• Assess whether the subject matter is prepared, in all material respects, in accordance with the reporting criteria;
• Read the Report to assess the consistency of the information presented with the findings of our work.
Within the scope of our work we performed amongst others the following procedures:
• Interviews with management and personnel in Operations, Property, Projects, China & International Business, Finance, Legal & Procurement, Human Resources & Administration divisions and Sustainability Development Department involved in providing information for inclusion in the Report in relation to the subject matter;
• Examination on a test basis of documentary evidence relating to the subject matter;
• Assessment of the relevant sections of the Report relating to the subject matter to check for consistency with the findings of our work.
35
About this Report
From the Chief Executive O
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Global O
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Engagement
Low Carbon Future
Performance M
etrics
Responding to Stakeholder Expectations
Stakeholder Expectation Our 2010 Response
Regulators Comply with Operating Agreement
• Achieved all performance targets and compliant with Agreement as of year-end
Support the sustainable development of Hong Kong and its society
• Express Rail Link and West Island Line on construction programme schedule
• South Island Line (East) and Kwun Tong Line Extension authorised
• Advanced design and planning on South Island Line (East), Shatin to Central Link and Kwun Tong Line Extension
• Shatin to Central Link gazetted
• Employed 731 persons with disabilities, accounting for 5.4% of MTR’s Hong Kong workforce (excluding subsidiaries)
Observe town planning regulations and guidelines with due consideration of community aspirations
• Property development packages in LOHAS Park under review for compliance with new property regulations introduction
Investors Provide shareholder returns
• Full-year dividend of HK$0.59 per share for 2010, an increase of 13.5% from 2009
Sustain economic viability
• Sustained financial credit ratings
• Maintained inclusion in MSCI Hong Kong Indices, FTSE4Good, Dow Jones Sustainability World Index and Dow Jones Sustainability Index Asia Pacific
• Included in the Hang Seng Corporate Sustainability Index established in 2010
• Net profit of HK$12,059 million for the year attributable to equity shareholders, up 25.1% from 2009
Expand in mainland China and overseas markets where opportune
• Shenzhen Line 4 Phase 1 services takeover completed
• Beijing Daxing Line, a 22-km extension of Beijing Metro Line 4, commenced service
• Concession agreement with Hangzhou Municipal Government initialled for investment, construction and operation of Hangzhou Metro Line 1
• Enhanced corporate governance framework established for all subsidiaries and associate companies
Maintain informative investor communications
• Over 300 MTR-initiated investor and analysts meetings and other shareholder forums conducted throughout year
Staff Provide career opportunities, professional development and personal development
• Filled 47% of vacant posts internally, either by promotion or transfer
• 87,224 man days training conducted for Hong Kong-based staff, averaging 6.4 man days per employee
• Under the Enhanced Staff Communication programme, over 5,000 meetings held internally to encourage staff communication and feedback in support of VMV workplace integration
• Projects Division launched new programme to transform mindset and work practices to meet challenges of new rail projects delivery
• Personal mentoring and development programmes introduced, catering to the needs of younger generation of staff
• Maintained healthy-living initiatives
• Community Care Action programme established to internally co-ordinate all community and staff volunteer activities
• Staged 198 community projects involving over 4,400 company volunteers
• Established training centre in Shenzhen for local rail operations and maintenance and customer service
• Simplified Chinese-language version of the Code of Conduct issued to wholly owned subsidiaries in mainland China
Passengers and Customers
Give value for money in services
• Student, disabled and elderly discount schemes continued
• Fees for MTR-managed residential properties reduced in response to owners’ representatives applications
Maintain high standards in rail services and safety
• Achieved all performance targets under the Customer Services Pledge
• Ranked highly in performance amongst participating global metros in annual CoMET benchmarking programme
• Review of contingency planning for rail services disruption undertaken and new programme initiated
• Passenger safety campaigns launched to educate network users on safe behaviour within stations
• Joint anti-crime campaign launched with the Railway District Police to promote crime fighting within the railway network
The following table summarises the significant actions taken during 2010 in response to our stakeholders’ expectations. This table is supplemented on our sustainability website, which cites further initiatives undertaken or in progress during the year.
36
Stakeholder Expectation Our 2010 Response
Passengers and Customers (cont’d)
Respond to evolving aspirations
• Iconic signage introduced in stations to enhance passenger information and to aid management during emergencies
• MTR Mobile app introduced for travel convenience and leisure activities information
Provide world-class travel environments
• Station and network upgrades continued under rail refurbishment programme
• Platform screen doors installation at eight above-ground heavy rail stations on schedule for completion in 2011
Business Partners, Contractors and Suppliers
Provide opportunities for rail projects participation
Participate in supply chain sustainability
• Compliance with new Statutory Minimum Wage regulations included as part of contract requirement
• Good safety practices programmes introduced to rail project sites that financially reward workers
• Collaborated with Hong Kong Construction Industry Council to provide training for needed site skills
• Green procurement meetings held with international supply chain to share best practices for application to future projects
• Collaborated with the Chartered Institute of Purchasing & Supply Hong Kong Branch to promote business ethics and corporate responsibility
• Participated in Eco-Expo Asia to foster green buying with the supply chain community
• Established open supply contracts with social enterprises
• Target cost contracts adopted in projects with a high degree of risk and uncertainty, where collaborative working to address issues is the key
Community Social inclusion and transparency in new rail projects
Preserve local heritage and community life
Demonstrate good corporate citizenship
• Designated Community Liaison Groups established for each new railway project
• Over 400 meetings involving communities and interested groups held in regards to new rail projects
• Individual websites launched for five new rail projects, communicating MTR’s respect for local community aspirations and preservation of heritage, local community life and the environment
• MTR Facebook account opened to communicate with and educate the younger generation about the MTR
• Over HK$1.13 million raised for Hospital Authority Health InfoWorld at MTR Hong Kong Race Walking 2010
International and regional leadership
• Recognised as a Sector Leader in the global travel and tourism industry and awarded the Gold Class from SAM (Sustainable Asset Management)
• Listed in Innovest’s global top 100 sustainable companies
• Chaired Best Practice Committee of the Hong Kong Climate Change Business Forum
• Signatory member of the Hong Kong Green Building Council
• Executive Excellence Consortium of leading Hong Kong companies established to share leadership qualities and executive capabilities
• Hosted the 6th UITP Asia-Pacific Congress and 3rd International Conference on Public Transport Financing
Environment (Climate Change)
Sustainable best practices
• Biodiversity Policy formally adopted March 2011
• EIA online programme launched, enabling wide access to rail project environmental impacts in simplified language and graphic illustrations
• Environmental impact assessments completed for South Island Line (East) and Kwun Tong Line Extension
• Centralised Environmental Management System maintains ISO 14001 certification
• Building Environmental Assessment Method certification, BEAM Plus, required for all new property developments
• Compliant with new Building Energy Codes regulations
• Lok Ma Chau Wetlands biodiversity maintained
• Olympic Station refurbishment commenced under the Energy Efficient Building Retrofit Program
37
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
53.6
Staff EfficiencyCar km per total labour hours
09
78.2
07
65.9
06
62.1
05
38.7
08
60.4
80
60
40
20
44.741.7
09
78.2
07
48.6
0605
Service CostsOperating costs per car km(US$ PPP)
08
64.3
80
60
40
20
100
09
94.4
07
98.1
06
97.7
05
Asset UtilisationCapacity km per route km
08
100
80
60
40
20
09
71.8
07
71.9
06
89.8
05
80.5
Cost per JourneyOperating costs per passenger journeys(US$ PPP)
08
73.680
60
40
20
09
99.9
07
99.9
06
99.9
05
99.9
Customer Service% Passenger journeys on time
08
100
80
60
40
20
09
59.4
070605
N/A
Energy ConsumptionTotal energy consumed per passenger km
08
47.754.4
80
60
40
20
09
47.1
07
100
06
100
05
100
Safety RatioFatality per billion passenger journey
08
100
80
60
40
20
100 99.9
80
60
40
20
09
99.8
0706
99.8
05
99.7
Trouble-Free Journey% Trains trips on time
08
80
60
40
20
09
100
07
100
06
95.2
05
95.5
ProfitabilityTotal commercial revenueper operating cost
08
100
CoMET Benchmarking Results 2009
38
The corporation participates in the Community of Metros (CoMET) programme that annually collects data from large metro system operators around the world to compare performance in a number of common areas. In 2010 (data for 2009), the CoMET benchmarking exercise programme included 13 large metro systems - Beijing, Berlin, Hong Kong, London, Mexico City, Madrid, Moscow, New York, Paris Metro, Paris RER, Santiago, Shanghai and Sao Paulo.
The benchmarking process uses 36 Key Performance Indicators (KPIs), which measure the performance through six categories: growth and learning, customer, internal processes, safety and security, financial performance and environmental performance. Being conducted over several years, trends can be reliably identified. This helps determine which members are changing their practices and shows what improvements are relatively achievable. Where clear differences or improvements in performance have been identified, detailed analysis is carried out through case studies.
Participation in the programme is a needed industry activity. We learn and share with colleagues the best practices, innovation and new technologies that are raising performance bars. Through the many case studies on changes in performance, we understand how response is structured and how different metro operators work towards optimal performance.
Analysing our results in the latest 2009 benchmarking round, we see a number of learning areas to explore. Performance overall improved with ranking amongst the top three participants in six out of the nine KPIs reported, most notably in Profitability. In those areas of ratings decline, we remain competitive and recognise the improvements made by industry colleagues.
In safety, our performance benchmarked against metro colleagues dropped significantly. This is due mainly to the noted high performance safety ratio of our programme colleagues and the inclusion of a new reporting member in this category. Our internal safety ratio (in terms
of fatalities per billion passenger journeys) however, improved from 5.71 for 2008 to 5.11 for 2009.
Reporting on energy consumption demonstrates the importance the industry now attaches to its carbon footprint. In reviewing our comparative performance, we looked at our sources of energy consumption. Possible reasons for the high demand are due to our high standards in services and delivery, such as the need for year-round air-conditioning systems within the network. Such factors are not easily remedied without significant economic, environmental and social impacts on the rail system.
However, under the internal Energy Management Committee, we address continual performance improvement and internally monitor our electricity consumption. Our methodology aligns to the CoMET revenues per car km measurement. The MTR’s electricity efficiency ratio has steadily improved over the last five years. The graph on page 28 shows the year-on-year improvement.
The Community of Metros (CoMET) is a programme of international railway benchmarking, comprising a consortium of 13 metropolitan metros. Results of the annual benchmarking exercise are released in the fourth quarter of the following year.
MTR performance vs Best performance (%) (Best performance = 100)
China and International Business China and International Business includes the China and International Business Division in Hong Kong and our wholly or majority owned subsidiaries operating Shenzhen Line 4, Stockholm metro and Melbourne metro, as well as our minority owned affiliates operating London Overground, Beijing Metro Line 4 and Daxing Line.
Contractor Staff Reportable Accidents
Work-related injuries of contractor staff that resulted in more than three days’ sick leave.
Legal Environmental Compliance (Contractors)
The number of successful environmental prosecutions in Hong Kong incurred by all contractors directly appointed by the Company for the reporting year.
Passenger Fatality Number of passenger fatalities that have occurred in the MTR network in Hong Kong. Figure excludes suicides, attempted suicides, brawls between passengers and injuries due to passengers’ own medical conditions.
Passenger Injuries Requiring Hospitalisation
Injuries that require admission to hospital for observation or treatment immediately after an accident. Figure excludes suicides, attempted suicides, brawls between passengers and injuries owing to passengers’ own medical conditions.
Passenger Journeys on Time Calculated as percentage applying formula: [(Incoming patronage in a month) – (passengers in a month delayed by at least 5 minutes)]/[Incoming patronage in a month] x 100%. Calculated monthly over operating period and then calculating the mean thereof. [Kwun Tong Line (KTL), Tsuen Wan Line (TWL), Island Line(ISL), Tseung Kwan O Line (TKL), Tung Chung Line (TCL), Disneyland Resort Line (DRL)], Airport Express (AEL), East Rail Line (ERL), and West Rail Line (WRL) passenger journeys on time calculated separately using same formula.
Passenger Trips Fare-paying passengers entering the railway network and boarding the bus. A passenger transiting between Tsim Sha Tsui station and Tsim Sha Tsui East station within 30 minutes using the same Octopus card is treated as an interchanging passenger whereby these two separate entries to the railway network are counted as one fare-paying passenger. The number of annual average passenger trips per weekday is reported.
Property Development and Investment Projects
Property development and investment projects include the foundation, building, alteration and addition works for the property developments at Austin, Che Kung Temple, Hang Hau, LOHAS Park, Tai Wai, Tseung Kwan O, Tsing Yi, Tsuen Wan West and Tuen Mun station, and Western Harbour.
Railway Extension Projects Railway extension projects include all civil and electrical and mechanical works for Kowloon Southern Link, Kwun Tong Line Extension, Shatin to Central Link, South Island Line (East), West Island Line and Express Rail Link (Hong Kong Section).
Staff Lost Time Injuries Any work-related injuries of staff that resulted in one or more days’ sick leave being granted.
Staff Turnover Rate Sum of 12-monthly turnovers calculated as number of voluntary staff resignations/total staff strength by month-end. Figure excludes temporary and casual staff, staff of UK Rugby Office and MTR Corporation subsidiaries, as well as staff leaving under the voluntary separation scheme.
Train Punctuality Calculated as percentage applying formula: [(actual train trips in a month) – (train trips in a month delayed by at least "y" minutes)]/[actual train trips in a month] x 100%, where "y" = 2 for (KTL, TWL, ISL, TKL, TCL & DRL), 3 for ERL and WRL, and 5 for AEL and Light Rail. Calculated monthly over operating period and then calculating the mean thereof. Punctuality of different train systems calculated separately using respective formulae.
Train Reliability Calculated as revenue car-km per incident applying formula: (actual revenue car-km run in a month/total number of train failure incidents with trains delayed by at least 5 minutes in a month). Calculated monthly over operating period and then calculating the mean thereof. (KTL, TWL, ISL, TKL, TCL & DRL & AEL) and (ERL and WRL) train reliabilities calculated separately using same formula.
Train Service Delivery Calculated as percentage applying formula: [(actual train trips in a month)/(scheduled train trips in a month)] x 100%. Calculated monthly over operating period and then calculating the mean thereof. (KTL, TWL, ISL, TKL, TCL, DRL & AEL), ERL, WRL and Light Rail train service delivery calculated separately using the same formula.
Train Trip Journeys run by a train from one end of a line or an intermediate point on a line to the point on a line that is scheduled by the corporation to be the destination for that train. In the event of a train being withdrawn from service before reaching its destination point, train trip shall be determined by the corporation on a pro-rata basis based on the distance run by that train between its starting point and the point at which it is withdrawn from service and the distance between its starting point and its destination point.
Vacant Posts Filled Internally Number of job vacancies filled by internal candidates through job promotion or cross-departmental/ sectional transfer. Figures exclude temporary and casual staff, staff of UK Rugby Office and MTR Corporation subsidiaries.
Waste Disposed to Landfill Waste generated from railway extension projects, excluding waste from railway operations, property development projects and managed properties owned by the corporation.
53.6
Staff EfficiencyCar km per total labour hours
09
78.2
07
65.9
06
62.1
05
38.7
08
60.4
80
60
40
20
44.741.7
09
78.2
07
48.6
0605
Service CostsOperating costs per car km(US$ PPP)
08
64.3
80
60
40
20
100
09
94.4
07
98.1
06
97.7
05
Asset UtilisationCapacity km per route km
08
100
80
60
40
20
09
71.8
07
71.9
06
89.8
05
80.5
Cost per JourneyOperating costs per passenger journeys(US$ PPP)
08
73.680
60
40
20
09
99.9
07
99.9
06
99.9
05
99.9
Customer Service% Passenger journeys on time
08
100
80
60
40
20
09
59.4
070605
N/A
Energy ConsumptionTotal energy consumed per passenger km
08
47.754.4
80
60
40
20
09
47.1
07
100
06
100
05
100
Safety RatioFatality per billion passenger journey
08
100
80
60
40
20
100 99.9
80
60
40
20
09
99.8
0706
99.8
05
99.7
Trouble-Free Journey% Trains trips on time
08
80
60
40
20
09
100
07
100
06
95.2
05
95.5
ProfitabilityTotal commercial revenueper operating cost
08
100
Definitions
39
About this Report
From the Chief Executive O
fficer
Global O
rganisationRisk
Engagement
Low Carbon Future
Performance M
etrics
4142
19 01
02
03
04
05
07
28
29 30 45
40
44
46
47
4849
50
27
31
33
35
36
38
39
23
24
26
340910
12
13
15
17
08
11
14
22
20
4325
32
37
18
0651
16
Chau Tau
Lo Wu
Sheung Shui
Fanling
Tai Wo
Tai Po M
arket
University
Tuen Mun
Siu Hong
Tin Shui Wai
Long
Ping Yuen Long
Wu Kai Sha
Ma On Shan
Heng On
Tai
Shui
Hang
City O
ne
Shek Mun
ShaTin
Wai
Che Kung
Temple
Fo Tan
Sha Tin
Tsuen W
an
Tsuen W
an West
Tsing Yi
Sunny Bay
Airport
Tai Wo H
au
Kwai Fong
Lai King
Tai Wai
Choi Hung
Kowloon Bay
Ngau Tau Kok
Kwun Tong
Lam Tin
Yau Tong
Chai Wan
Tai Koo
Sai Wan H
o
Shau Kei Wan
Heng Fa Chuen
Tiu
Keng
Leng
Sai Ying Pun
Kennedy
Town TinHau
Wan
Chai
Wong
Chuk
Hang Ocean
Park
South H
orizons
Aberdeen
Lei Tung
Causeway
Bay
Admiralty
Central
Central S
outh
Cyberport
Wah Fu
Sheung Wan
Nam
Cheong
Disneyland
Resort
Tung
Chung
Olympic
Kowloon Tseung
Kwan O
Po Lam
Hang Hau
Raceco
urse*
Cheung
Sha Wan
Sham
Shui Po
Mong
Kok MaTau
Wai
ToKwa
Wan
Kai Tak
Whampoa
Hung
Hom
Quarry Bay
Mong
Kok East
ShekKip M
ei
Cable CarNgong Ping 360
Lantau Island
Hong Kong Island
New Territories
KowloonAsia
World-
Expo
Kwai Hing
Mei Foo
Lai Chi K
ok
Lok Ma Chau
Prince
Edward
Austin
West
Kowloon
Terminus Tsim
ShaTsu
i
Diamond Hill
Wong Tai Sin
Hin Keng
Lok Fu
East Tsim
Sha Tsui
YauMa
TeiHo
Man Tin
North
Point
Hong Kong
University
KamSheung
Road
LOHAS Park
Shenzhen
Jord
an
TamarHong Kong
Fortress
Hill
Kowloon
Tong
Exhibition
Intercity ThroughTrain Route Map
Projects in Progress
Extensions under Study
Potential Future Extensions
Guangzhou-Shenzhen-Hong Kong Express Rail Link
West Island Line
Kwun Tong Line Extension
Shatin to Central Link
South Island Line (East)
North Island Line
Northern Link
South Island Line (West)
Existing Network
Legend
Station
Interchange Station
Proposed Station
Proposed Interchange Station
Cable Car Ngong Ping 360
Shenzhen Metro Network
Racing days only
Airport Express
Disneyland Resort Line
East Rail Line
Island Line
Kwun Tong Line
Light Rail
Ma On Shan Line
Tseung Kwan O Line
Tsuen Wan Line
Tung Chung Line
West Rail Line
Properties Owned / Developed /Managed by the Corporation
01 Telford Gardens / Telford Plaza I and II
02 World-wide House
03 Admiralty Centre
04 Argyle Centre
05 Luk Yeung Sun Chuen / Luk YeungGalleria
06 New Kwai Fong Gardens
07 Sun Kwai Hing Gardens
08 Fairmont House
09 Kornhill / Kornhill Gardens
10 Fortress Metro Towers
11 Hongway Garden / Vicwood Plaza
12 Perfect Mount Gardens
13 New Jade Garden
14 Southorn Garden
15 Heng Fa Chuen / Heng Fa Villa /Paradise Mall
16 Park Towers
17 Felicity Garden
18 Tierra Verde / Maritime Square
19 Tung Chung Crescent / Citygate / NovotelCitygate / Seaview Crescent / CoastalSkyline / Caribbean Coast
20 Central Park / Island Harbourview /Park Avenue / Harbour Green /Bank of China Centre / HSBC Centre /Olympian City One / Olympian City Two
21 The Waterfront / Sorrento /The Harbourside / The Arch / Elements /The Cullinan / The Harbourview Place /W Hong Kong / International CommerceCentre
22 One International Finance Centre /Two International Finance Centre /IFC Mall / Four Seasons Hotel /Four Seasons Place
23 Central Heights / The Grandiose /The Edge
24 Residence Oasis / The Lane
25 No. 8 Clear Water Bay Road / Choi HungPark & Ride
26 Metro Town
27 Royal Ascot / Plaza Ascot
28 Pierhead Garden / Ocean Walk
29 Sun Tuen Mun Centre / Sun Tuen MunShopping Centre
30 Hanford Garden / Hanford Plaza
31 Citylink Plaza
32 MTR Hung Hom Building / Hung HomStation Carpark
33 Trackside Villas
34 The Capitol/ Le Prestige
35 The Palazzo
36 Lake Silver
Property Developments underConstruction / Planning
23 Tseung Kwan O Station Area 56
34 LOHAS Park Package 2-10
37 Tai Wai Maintenance Centre
38 Che Kung Temple Station
39 Tai Wai Station
40 Tin Shui Wai Light Rail Terminus
41 Austin Station Site C
42 Austin Station Site D
West Rail Line PropertyDevelopment(as Government Agent)
43 Nam Cheong Station
44 Yuen Long Station
45 Tuen Mun Station
46 Tsuen Wan West Station
47 Long Ping Station
48 Tin Shui Wai Station
49 Kam Sheung Road Station
50 Pat Heung Maintenance Centre
51 Kwai Fong Site37 Festival City (Phases 1 & 2)
Kwu Tong
Hong Kong Operating Network with Future Extensions
40
4142
19 01
02
03
04
05
07
28
29 30 45
40
44
46
47
4849
50
27
31
33
35
36
38
39
23
24
26
340910
12
13
15
17
08
11
14
22
20
4325
32
37
18
0651
16
Chau Tau
Lo Wu
Sheung Shui
Fanling
Tai Wo
Tai Po M
arket
University
Tuen Mun
Siu Hong
Tin Shui Wai
Long
Ping Yuen Long
Wu Kai Sha
Ma On Shan
Heng On
Tai
Shui
Hang
City O
ne
Shek Mun
ShaTin
Wai
Che Kung
Temple
Fo Tan
Sha Tin
Tsuen W
an
Tsuen W
an West
Tsing Yi
Sunny Bay
Airport
Tai Wo H
au
Kwai Fong
Lai King
Tai Wai
Choi Hung
Kowloon Bay
Ngau Tau Kok
Kwun Tong
Lam Tin
Yau Tong
Chai Wan
Tai Koo
Sai Wan H
o
Shau Kei Wan
Heng Fa Chuen
Tiu
Keng
Leng
Sai Ying Pun
Kennedy
Town TinHau
Wan
Chai
Wong
Chuk
Hang Ocean
Park
South H
orizons
Aberdeen
Lei Tung
Causeway
Bay
Admiralty
Central
Central S
outh
Cyberport
Wah Fu
Sheung Wan
Nam
Cheong
Disneyland
Resort
Tung
Chung
Olympic
Kowloon Tseung
Kwan O
Po Lam
Hang Hau
Raceco
urse*
Cheung
Sha Wan
Sham
Shui Po
Mong
Kok MaTau
Wai
ToKwa
Wan
Kai Tak
Whampoa
Hung
Hom
Quarry Bay
Mong
Kok East
ShekKip M
ei
Cable CarNgong Ping 360
Lantau Island
Hong Kong Island
New Territories
KowloonAsia
World-
Expo
Kwai Hing
Mei Foo
Lai Chi K
ok
Lok Ma Chau
Prince
Edward
Austin
West
Kowloon
Terminus Tsim
ShaTsu
i
Diamond Hill
Wong Tai Sin
Hin Keng
Lok Fu
East Tsim
Sha Tsui
YauMa
TeiHo
Man Tin
North
Point
Hong Kong
University
KamSheung
Road
LOHAS Park
Shenzhen
Jord
an
TamarHong Kong
Fortress
Hill
Kowloon
Tong
Exhibition
Intercity ThroughTrain Route Map
Projects in Progress
Extensions under Study
Potential Future Extensions
Guangzhou-Shenzhen-Hong Kong Express Rail Link
West Island Line
Kwun Tong Line Extension
Shatin to Central Link
South Island Line (East)
North Island Line
Northern Link
South Island Line (West)
Existing Network
Legend
Station
Interchange Station
Proposed Station
Proposed Interchange Station
Cable Car Ngong Ping 360
Shenzhen Metro Network
Racing days only
Airport Express
Disneyland Resort Line
East Rail Line
Island Line
Kwun Tong Line
Light Rail
Ma On Shan Line
Tseung Kwan O Line
Tsuen Wan Line
Tung Chung Line
West Rail Line
Properties Owned / Developed /Managed by the Corporation
01 Telford Gardens / Telford Plaza I and II
02 World-wide House
03 Admiralty Centre
04 Argyle Centre
05 Luk Yeung Sun Chuen / Luk YeungGalleria
06 New Kwai Fong Gardens
07 Sun Kwai Hing Gardens
08 Fairmont House
09 Kornhill / Kornhill Gardens
10 Fortress Metro Towers
11 Hongway Garden / Vicwood Plaza
12 Perfect Mount Gardens
13 New Jade Garden
14 Southorn Garden
15 Heng Fa Chuen / Heng Fa Villa /Paradise Mall
16 Park Towers
17 Felicity Garden
18 Tierra Verde / Maritime Square
19 Tung Chung Crescent / Citygate / NovotelCitygate / Seaview Crescent / CoastalSkyline / Caribbean Coast
20 Central Park / Island Harbourview /Park Avenue / Harbour Green /Bank of China Centre / HSBC Centre /Olympian City One / Olympian City Two
21 The Waterfront / Sorrento /The Harbourside / The Arch / Elements /The Cullinan / The Harbourview Place /W Hong Kong / International CommerceCentre
22 One International Finance Centre /Two International Finance Centre /IFC Mall / Four Seasons Hotel /Four Seasons Place
23 Central Heights / The Grandiose /The Edge
24 Residence Oasis / The Lane
25 No. 8 Clear Water Bay Road / Choi HungPark & Ride
26 Metro Town
27 Royal Ascot / Plaza Ascot
28 Pierhead Garden / Ocean Walk
29 Sun Tuen Mun Centre / Sun Tuen MunShopping Centre
30 Hanford Garden / Hanford Plaza
31 Citylink Plaza
32 MTR Hung Hom Building / Hung HomStation Carpark
33 Trackside Villas
34 The Capitol/ Le Prestige
35 The Palazzo
36 Lake Silver
Property Developments underConstruction / Planning
23 Tseung Kwan O Station Area 56
34 LOHAS Park Package 2-10
37 Tai Wai Maintenance Centre
38 Che Kung Temple Station
39 Tai Wai Station
40 Tin Shui Wai Light Rail Terminus
41 Austin Station Site C
42 Austin Station Site D
West Rail Line PropertyDevelopment(as Government Agent)
43 Nam Cheong Station
44 Yuen Long Station
45 Tuen Mun Station
46 Tsuen Wan West Station
47 Long Ping Station
48 Tin Shui Wai Station
49 Kam Sheung Road Station
50 Pat Heung Maintenance Centre
51 Kwai Fong Site37 Festival City (Phases 1 & 2)
Kwu Tong
41
Project Management and Editorial: Streeter Strategic LtdDesign: CoDesign LtdPhotography: Leong Ka Tai
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