Transit Equipment 

Hong Kong

Overview                                                              

* Figures include railroad equipment and services.  All figures are in US$ million.  The above statistics are unofficial estimates.  Exports of transit services statistics are not available.

Hong Kong has five different rail systems: the heavily utilized Mass Transit Railway (MTR) network, the suburban Kowloon-Canton Railway (KCR), the Light Rail Transit (LTR) system, the Peak funicular tramway and a street tramway.  The MTR is operated by the Mass Transit Railway Corporation Limited (MTRC, a listed company with Hong Kong Government holding 76 percent shares in MTRC) while the KCR and LRT are operated by the Kowloon-Canton Railway Corporation (a wholly Government owned public corporation.)  Both MTR and KCR are profitable and operate without any Government grants.  The MTRC is currently waiting for the Hong Kong legislature to approve a merger with the KCR.  This merger aims to increase the overall efficiency of the combined railroad system and to maximize utilization of existing facilities.  The tramways are owned by private operators.

Railroads account for 31 percent of daily domestic passenger travel and over 80 percent of cross-boundary passenger trips to Mainland China.  The Government’s transport policy is to use railroads as the backbone of the public transport system.  As outlined in the Railway Development Strategy 2000, the rail systems are being extended.  An estimated US$13 billion will be spent on six additional rail lines targeted for completion between 2008 and 2016. 

Exports of railroad equipment to Hong Kong increased by five percent from approximately US$113 million in 2005 to US$119 million in 2006.  Exports of railroad equipment should pick up in the next two years to coincide with the start of a new purchasing cycle for the upcoming projects planned in 2008.  The U.S. supplies US$22 million worth (or 18%) of railroad equipment to Hong Kong.  It is important to note that these statistics understate the total actual participation of U.S. companies in the Hong Kong railroad market.  This is largely due to the fact that some large U.S. companies provide consultancy and project management services that are not captured by these statistics.  U.S. export of railroad-related services is estimated to increase by six percent from US$102 million in 2005 to US$108 million in 2006.

Best Products/Services                                                               

Historically, large U.S. building and construction companies have not been very active in the Hong Kong transit industry.  In railroad projects, civil contracts are still the largest share of all contracts.  Electrical and mechanical (E&M) contracts contribute a smaller share (e.g. E&M contracts only account for 22 percent of all the Airport Railroad contracts).  American building and construction companies should consider forming strategic alliances with local firms.  Local experience is crucial in winning any railroad projects and large civil engineering contracts have been won by construction consortia.

Other best prospects for U.S. companies include railroad project management, environmental impact assessment consultancy projects, controls and communications projects and rail security. 

Opportunities                                                                           

MTR’s Planned Projects in Hong Kong

MTR operates a railroad network of 90.0 kilometers with 52 stations.  Its seven-line commuter network has a daily patronage of over 2.4 million passengers and a design capacity of up to 85,000 passengers per hour.  Upcoming extension projects include the West Island Line and South Island Line.   The implementation program and detailed design were completed in August 2006 and contract procurement will be conducted in 2007.  Construction of the West Island Line will take four years to complete.  MTR is currently discussing the South Island Line project with the Government.  The design and statutory processes will take two years to complete, followed by another four years to complete the construction of the South Island Line.

KCRC Planned Projects

Resources                                                                               

Mass Transit Railway Corporation: http://www.mtr.com.hk

Kowloon Railway Corporation: http://www.kcrc.com

Hong Kong Commercial Specialist’s Contact:

Alice Lai

Email: alice.lai@N0SPAM.mail.doc.gov

Tel: (852) 2521-4638; Fax: (852) 2845-9800