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Bricks can resist the epidemic, MTR must make good use of its profits to benefit the people's livelihood

2021-05-29T04:48:17.917Z


MTR Chairman Ouyang Boquan said before attending the company’s shareholders meeting on Wednesday (26th) that property development projects under the epidemic have performed relatively well, and the sale of buildings above railway stations will continue in the short term, and 100 billion yuan will be invested in the construction of new railways in the future.


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Written by: Commentary Editing Room

2021-05-27 17:20

Last update date: 2021-05-27 17:20

MTR Chairman Ouyang Boquan said before attending the company’s shareholders meeting on Wednesday (26th) that property development projects under the epidemic have performed relatively well. The sale of buildings above railway stations will continue in the short term, and 100 billion yuan will be invested in the construction of new railway lines and small buildings in the future. The superstructure of Haowan Depot.

MTR is a public utility and enjoys a monopolistic position. Its property projects have always been well-placed and profitable. It has a greater ability to subsidize its transportation industry and improve the quality of Hong Kong people’s living. It uses its status as a “state-owned enterprise” to solve residential problems. There are two major problems in travel.

The epidemic has severely hit all industries, and it is inevitable that MTR’s revenue from train services and rental services will drop significantly.

However, the MTR real estate business has so far withstood the epidemic. Last year, the property development business brought 5.507 billion attributable profits to the company’s shareholders, which was only a slight drop of 1.3% from the 2019 high. Most of the profits came from local sales, and the amount was enough to make up for it. Recurring business losses.

In recent months, the sales of units in Wong Chuk Hang Jinhuan and Tai Wai Boao Zhuang have been booming. Future projects are also in the center of the area. The flow of people is guaranteed. In addition, Ouyang Boquan has given reassurance for future development projects. Profits are believed to continue to be substantial.

MTR has been given preferential treatment by government policies, including regional planning mostly centered on railway stations, bringing stable passenger volume to the MTR, and excluding direct competition from the same industry or other modes of transportation, and its status is like a "state-owned enterprise."

Although MTR has been investing part of its profits on railway operations and future railway construction projects, judging from the huge profits over the years and the geographical advantages of new projects, companies still have room to give back to the society, and first make good use of the superstructure properties and profits.

Lowering the fares of the MTR can effectively reduce the cost of living of the people.

(Profile picture)

Make good use of the value of railway superstructure

But how to make good use of profits is worth discussing.

In recent years, the community has increasingly questioned that the residential projects above railway stations should be privately owned, and they have forgotten the urgent task of solving basic housing needs for the public.

Under the pressure of the people, the government and the MTR agreed to reserve 10,000 units above the Siu Ho Wan Depot for public housing.

At the meeting of the Legislative Council in the middle of this month, Member Suk-yee Ip suggested that half of the properties on the Tuen Mun South Extension and Northern Link should be reserved for HOS housing, while other members suggested that the government cap the profits of the MTR.

The construction of HOS housing on the roof does allow more middle-income families to share convenient transportation and surrounding facilities to achieve certain social goals. However, in terms of releasing the value of the land, leaving the housing on the roof for private buildings helps MTR to obtain the most income from the sales of buildings. Income can be effectively returned to the pockets of citizens, making money is not a problem.

As for capping the profits of the MTR, requiring companies to allocate part of their profits, after all, it violates the wishes of shareholders and even the initial listing expectations.

Chen Fan responded to a question from Legislative Council Members on the 12th of this month, saying that he would review whether there is room for subsidized housing on the Northern Ring Road.

(Photo by Yu Junliang)

Use property returns to subsidize car fares

To make the railway benefit all people, the government must start with planning and subsidies.

In terms of planning, the government leaves all the residential land near the upper building to public housing, and does a good job of connecting railway stations and housing estates.

At the same time, the government should directly repurchase the MTR, instruct the MTR to separate the transportation and property sectors, and then relist the latter as a housing trust fund.

The government and MTR's transportation department can use the holding stocks and future dividends to subsidize the transportation business.

The combination of the two measures is expected to narrow the gap in the lives of different classes.

The transformation of the MTR structure is a complex issue. For example, the government and the MTR have to re-establish railway financing arrangements.

At present, since the property and railway business belong to a single enterprise, the government adopts the "railway plus property" model to grant the right to develop the property above the railway station to subsidize the cost of railway construction.

After the partial stripping of the railway part from the property in the future, the railway part will not have enough funds to build a new line for some time in the future. However, the overrun and delays of the Shah-Zhongsha-Central Line and the high-speed rail confirmed that the government’s wholly-owned "service management rights" model failed. Borrow or issue bonds from the government or the business community to raise funds. When the railway project is completed, the land will be sold to the housing trust fund and repaid.

Undoubtedly, the MTR controls the lifeblood of local railways and is essentially an enterprise with the government as the major shareholder. It should give priority to the implementation of government policies, and should not deviate from its goals regardless of whether it is listed or not.

From the perspective of the government, the government should use the MTR to solve social problems, rather than allowing the MTR to become the source of housing and transportation problems.

Since the chairman of the MTR is optimistic about the future property development, the government should lead the MTR to make good use of land and housing resources to benefit the people's livelihood, instead of allowing the MTR to "fatify itself."

Transparency is not equal to reasonable MTR must actively review the fare mechanism

Why does the MTR's property sales revenue have to "flow into other people's land"?

Reform capitalism to buy back MTR!

|Yu Pinhai

MTR Ouyang Boquan Kanazawa 01 Viewpoint

Source: hk1

All news articles on 2021-05-29

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