Track record: how trust grew a public transport giant

Every day, Hong Kong’s MTR takes five million journeys, with residents and visitors trusting it to deliver them to school, the office or shops.

"About 20 years ago, we took the decision to expand outside Hong Kong into mainland China and into other countries as well, to drive further growth.”

The fact MTR manages a 99.9 per cent punctuality rate in one of the world’s busiest financial hubs is a study in how a complex business can succeed if it has the right investment in technology and people.

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The MTR Hong Kong control room that backs up the services 99.9 per cent on time schedule in that city. 

MTR’s Finance Director, Michael Fitzgerald, says that despite having one of the busiest public transport systems in the world under its care, an important part of the organisation’s strategy is being focussed on growing in other markets.

“About 20 years ago, we took the decision to expand outside Hong Kong into mainland China and into other countries as well, to drive further growth.”

Today, MTR operates railway systems in markets including Australia, China, Sweden– bringing to life their purpose of “keeping cities moving”.

“The new M1 Metro line under Sydney, that's operated by us. And we're doing something similar in Melbourne, a new line under the centre of Melbourne.”

The Melbourne Metropolitan Railway network is 60% MTR-owned.

But how do you operate and maintain transport in a huge metropolis, while also growing around the globe?

For MTR, it is about having partners who will back them through highs and lows.

ANZ has had a partnership with MTR that spans more than 17 years. It’s a relationship that has enabled MTR to grow and thrive.

Origins of the business

The MTR Corporation was established in 1975 as the Mass Transit Railway Corporation to build and operate Hong Kong's public transport system. Operations started in 1979.

It was re-established as the MTR Corporation Limited in June 2000, after the Hong Kong Special Administrative Region Government sold 23 per cent of its issued share capital to private investors in an Initial Public Offering.

MTR Corporation shares were listed on the Stock Exchange of Hong Kong on 5 October 2000. Today it is a share market mainstay.

Facing the global financial crisis

MTR’s enormous geographic footprint – spanning from Europe to Asia to Australia - means wider global or financial system challenges can have an impact on MTR’s business.

Michael said one experience – amid the Global Financial Crisis (GFC) – reinforced MTR’s long-held belief that it was critical to have banking partners who will be there for the long haul.

He said that, like many companies with capital-intensive businesses at that time, MTR had a number of long-term high value leases as part of its overall funding strategy.   

“And in 2009, at the height of the GFC, a very well-known international bank suddenly decided that they didn't want to continue to provide letters of credit for one of our long-term leases.”

“If we had not been able to renew the letter of credit, then breaking one of those leases would have been extremely expensive, but ANZ stepped in.”

He said many years later, ANZ is still providing those letters of credit.

“I think the fact that 15 years on, we still talk about one bank stepping out and ANZ stepping in, tells you something about the value of support in tough times, in fast-moving, challenging situations. That shows you the importance of mutual commitment and understanding, dialogue and relationship.”

Different times, different geographies

The relationship has seen ANZ play a role in helping fund MTR’s Metro Trains Melbourne projects, as well as a number of Sydney projects, including the Sydney Metro Northwest and Sydney Metro City and Southwest Project.

ANZ has also been involved with MTR in London, providing a performance bond for the Elizabeth Line business, in addition to being a lender and Global Markets hedge provider to them in HK.

“We've been able to work with ANZ at different times in different geographies.”

Future challenges

Michael says that for long-term relationships to flourish, his business needed to have an open dialogue about future challenges.

He said there were a huge number of infrastructure projects coming in Hong Kong and these will require a lot of funding and hedging.

“This is a long-term relationship, and ANZ has shown that it can and will step up when necessary.”

Michael says another key part of finding the right partners to fund such huge operations is ensuring MTR can think laterally about solutions.

“I think another thing I like is the approach, the attitude.”

Delivering consistently

Recently, MTR printed a landmark U.S. dollar 3 billion public bond, the largest U.S. dollar bond deal in Hong Kong under the Reg-S format, where funds will help drive infrastructure development in Hong Kong.

ANZ acted as a joint lead manager for the deal.

“Our priority is making sure that the huge amount of funding we have to raise is going to be diversified.”

“I would say there are opportunities for ANZ to approach us and say, ‘have you considered this, have you considered that?  We don’t want to rely always on the same funding formats, however attractive and familiar they may be.”

“Where we’re not on the ground every day, we can rely on ANZ for their deep local insights and expertise, introducing us to new ideas that we might never have thought about otherwise.”

“That reflects the long-term relationship, the long-term discussions that we have. We are able to work together where there is overlap between ANZ’s footprint and ours.”

“There's shared interest in evaluating solutions that make sense for both of us.”

Jessie Denis, Head of Conglomerates, HK Corp, ANZ Institutional