Hong Kong metro rail operator MTR Corp is looking for more public-private partnerships outside its home market, although it intends to take what a spokesperson said would be a very “prudent” approach.
The company is interested in projects in the UK and China, he told Inframation on the sidelines of a press conference on Thursday (7 March). Financial feasibility and contract risk profiles will be central to any decision, the person said, declining to give details on any specific UK contracts the company is looking at.
The net profit from MTR’s international segment — comprising of railway businesses in the UK, Sweden, Australia and Macau — declined 17% to HKD 668m (USD 85m) last year. The company operates two phases of London’s Crossrail operating concession: a 32.5km, 14-station route between Liverpool Street Station and Shenfield, and a second phase providing services between Paddington Station and Heathrow Airport. It has also teamed up with FirstGroup on England’s South Western Railways franchise through a 30%-controlled associate.
MTR is interested in bidding for a third metro PPP project in Hangzhou, in the eastern Chinese province of Zhejiang, the company said in a statement. It already has two metro PPPs in the city, including the 49%-owned Hangzhou Metro Line 1 and the 60%-owned Hangzhou Metro Line 5. MTR is also considering investing in intercity rail projects in the province, according to the statement.
In the Chinese capital of Beijing, MTR is seeking potential PPP and O&M projects for urban rail lines, following an MOU signed in October 2018 with the Beijing Municipal Commission of Transport, BIIC and Beijing MTR to upgrade services. MTR saw its 2018 EBITDA for mainland China business increase by 44.4% from a year earlier to HKD 208m, helped by passenger growth in Shenzhen Metro Line 4.
In Canada, the company has partnered with Danya Vered, John Duffy and Lise Jolicoeur of Strategy Corp for a pre-qualification bid to DBFOM the Toronto Regional Express Rail. The project, if awarded to MTR, would be its first railway deal in North America.
“We’ve been following up on that since 2017 and hopefully could see a good result this year,” the spokesperson said.