12 April 2000
1999 marks a year of solid progress for KCRC
The 1999 Annual Report of the Kowloon-Canton Railway Corporation (KCRC) has been published and was tabled in the Legislative Council today.
In the report, KCRC Chairman and Chief Executive Mr K Y Yeung said: "1999 was a year of solid progress for the Corporation, as Hong Kong emerged from one of the worst recessions in recent memory. It was a good year in many respects, with marked improvements in virtually every area of activity.
Although there was a small decline in East Rail's domestic ridership from 204 million in 1998 to 200 million in 1999, the number of trips taken on Light Rail grew modestly from 114 million in 1998 to 114.7 million in 1999.
The net reduction of 1% in overall domestic ridership was more than offset by the rapid increase in cross-boundary ridership, from 65 million passenger trips in 1998 to 75 million last year.
As a result, total recurrent revenue rose 7% to $4,426 million.Net profit for 1999 went up 16% to $1,903 million.
On new capital projects, Mr Yeung said the Corporation had embarked on construction of West Rail, Phase I, in earnest and proceeded to detailed design of the three East Rail Extensions and improvement of the Light Rail network.
"In the process of carrying out all of these activities, the Corporation has, in recent years, acquired a growing and highly skilled project management capability and team," he said.
"Together with the capital projects management systems which we have developed, this team can be readily augmented and deployed to new projects when required.We can, therefore, look forward with confidence to the outcome of the Government's Second Railway Development Study.
Mr Yeung also noted that KCRC launched a successful borrowing programme last year and had established itself as a serious player in the world's debt capital markets.
Mr Yeung said KCRC held fare levels steady last year.Yet it was able to earn increased profits even though expenditure continued to rise.
"This was due in large part to the substantial investment we have been making to enhance our productivity, by completing both refurbishment of our entire East Rail fleet of trains and installation of an Automatic Train Protection signalling system on the same line," he said, adding both measures would increase East Rail's passenger carrying capacity by 38%.
Mr Yeung added: "Our continuing success as a Corporation does not rely simply on demographics.Rather, it is based on our ability to maximise earnings and the use of our assets.
During the year, KCRC clamped down on fare evasion, reducing the evasion rate from 0.45% at the beginning of the year to 0.06% in December.It also successfully persuaded the Government to permit in-bound duty free sales of dutiable commodities, increasing the revenue earning potential of KCRC's duty free concession.
In addition, KCRC had arranged all seven East Rail feeder bus services to come under the franchise of Kowloon Motor Bus Company Ltd.As a result, the Corporation gained the same benefit of fuel duty exemption as that already enjoyed by franchised bus companies and non-rail bus passengers must now pay a fare for the first time.
KCRC also maximised the use of its assets through leveraged leases.Two leveraged lease transactions were carried out in 1999: one for its fleet of train cars and the other for the Automatic Train Protection signalling system.

1999 Annual Report