Legco gets rail merger back on track

Hong Kong's controversial rail merger is back on track after lawmakers gave the go-ahead following a marathon debate.

The proposed tie-up between the MTR Corp and Kowloon-Canton Railway Corp, which had been blocked many times by government opponents fearing monopolization, was finally endorsed by 30 to 17 votes in the Legislative Council Friday after 24 hours of debate over the past three days.

There was only one abstention.

All 11 amendments to the Rail Merger Bill, mostly proposed by government critics, were rejected.

The bill was backed by pro-government parties, including the Democratic Alliance for the Betterment and Progress of Hong Kong and the business-oriented Liberal Party.

The merger is expected to be completed by the end of the year, subject to approval by minority shareholders of MTRC, in which the government has a controlling 76 percent stake.

Critics of the merger and legislators from the pro-Beijing camp engaged in a war of words before the bill was passed, with both sides accusing each other of ignoring the public's welfare.

Democrat Andrew Cheng Kar-foo condemned the DAB for keeping silent throughout the debate and failing to explain why it supported the merger plan although the deal would not include fare cuts for the Light Rail and there would be no public toilets at stations.

"They chose to remain silent, and they supported the government blindly," Cheng said, while expressing appreciation for independent lawmaker Chim Pui-chung's call on members to vote with conscience.

Tam Yiu-chung of the DAB hit back, saying their silence was because they did not want to follow other parties in using tactics to stall the bill.

Fellow DAB member Lau Kong- wah hailed the passage of the bill, saying it will benefit the public, which will enjoy immediate fare reductions and a two-year fare freeze.

Democratic Party chief Albert Ho Chun-yan said it was a shame that some kept silent.

Mandy Tam Heung-man of the Civic Party said passage of the bill will mean the government and the Legislative Council will lose power to monitor railway fares in future.

Secretary for the Environment, Transport and Works Sarah Liao Sau- tung said the merger will create synergy which, in turn, will create an opportunity for fare cuts.

A spokesman for the Environment, Transport and Works Bureau said: "With the passage of the Rail Merger Bill today, we will submit the relevant subsidiary legislation to the Legislative Council, which has already set up the Subcommittee to Study the Draft Subsidiary Legislation Relating to the Rail Merger.

"We hope the legislative procedures for approving the subsidiary legislation can be completed before the current Legislative Council session ends on July 11.

"MTR Corporation will then immediately proceed with the necessary steps required under the listing rules and convene an extraordinary general meeting. If the merger proposal is approved by the minority shareholders of MTRC, the two railway companies will prepare for merger implementation.

"These procedures are expected to be completed within a few months after completion of the legislative process."

The spokesman said merging the two rail systems can create synergy, which creates an opportunity for fare reduction.

A total of 2.8 million daily rail passenger trips will benefit from reduced fares from day one of the merger.

MTRC has also said there would be no fare increase up to June 2009.

MTRC chief executive Chow Chung-kong said the corporation will call for an extraordinary shareholders' meeting in September, and he is confident the company will get support from minority shareholders.

If more than half of the shareholders vote for the merger, it will take place by the end of this year.

Chow said he understood the public's petition for fare cuts in the Light Rail and assured that the new rail company will study the issue.

Ko Pak-kwan, chairman of the KCRC Workers' Union, said the staff look forward to the merger, saying they have been assured their jobs are safe and they will be treated fairly.

KCRC Operating Staff Association chairperson Rainbow Lau Choi-hung hopes the new company will communicate with staff to help cope with changes.

But MTR staff union chief Chan Sin-wo expressed concern over their staff's future since many details have yet to be thrashed out, particularly job arrangements.

All the proposals put forward by democrats, included setting up a railway development fund, and installing automatic platform screens at all MTR stations, were voted down Thursday.

Legco debated Friday for more than six hours on three amendments on the installation of public toilets, noise and future development rights Friday. All amendments were vetoed.

Cheng, who proposed installing toilets in all underground MTR stations, said they were for the the public. Independent "Long Hair" Leung Kwok- hung also questioned why there are staff toilets at MTR stations but no public toilets, saying the public's interest should come first.

Liao argued that installing public toilets in underground stations would involve construction difficulties, adding the MTRC will build toilets inside or near stations when they build new ones.

Democrat Lee Wing-tat suggested open tenders for property development rights at MTR stations.

He said the current practice of not having an open tender on land the MTR develops property is not fair. He said it provides a form of indirect subsidy to private developers since the MTRC develops property with private developers, with the land sold to MTR below market prices.

Transport chief Liao said the current financing of railway development is an effective way for railway and property management.