MTR Corporation Re Contract

  MTR Corporation - Re Contract

RNS Number : 3263E
MTR Corporation Ltd
29 May 2012




Hong Kong Exchanges and Clearing Limited  and The Stock Exchange of Hong  Kong 
Limited take no responsibility for the contents of this announcement, make  no 
representation as to its accuracy  or completeness and expressly disclaim  any 
liability whatsoever for any loss howsoever  arising from or in reliance  upon 
the whole or any part of the contents of this announcement.
                           MTR CORPORATION LIMITED
                       香  港  鐵  路  有  限  公  司 
                               (the "Company")
              (Incorporated in Hong Kong with limited liability)
                               (Stock code: 66)

                           DISCLOSEABLE TRANSACTION

                       CONTINUING CONNECTED TRANSACTION
On 24  November  2008, the  Company  entered into  a  preliminary  entrustment 
agreement with the Secretary  for Transport and Housing  for and on behalf  of 
Government,  providing  for  the  design   of,  and  site  investigation   and 
procurement activities in relation to, the Shatin to Central Link (the  "SCL") 
( "Preliminary Entrustment Agreement").

On 17 May  2011, the Company  entered into an  entrustment agreement with  the 
Secretary for  Transport and  Housing  for and  on  behalf of  Government  for 
advance works relating to the SCL (the "Advance Works Entrustment Agreement").

The scheme  in  respect of  the  SCL was  first  gazetted under  the  Railways 
Ordinance (Cap.  519 of  the Laws  of Hong  Kong) on  26 November  2010,  with 
amendments and corrections gazetted on 15 July 2011 and 11 November 2011.  The 
scheme, as  amended with  such minor  modifications as  deemed necessary,  was 
authorised by  the  Chief  Executive  in  Council  on  27  March  2012  (  the 
"Authorisation").

On 29 May 2012, pursuant to the Authorisation, the Secretary for Transport and
Housing for  and on  behalf of  Government  and the  Company entered  into  an 
agreement for  construction and  commissioning of  the SCL  (the  "Entrustment 
Agreement").

In consideration of the  Company executing or procuring  the execution of  the 
Entrustment Activities  (other  than the  Miscellaneous  Works (if  any))  and 
carrying out  its  other  obligations under  the  Entrustment  Agreement,  the 
Preliminary Entrustment Agreement and the Advance Works Entrustment Agreement,
Government shall pay to the Company the Project Management Cost on a quarterly
basis and,  in  consideration  of  the  Company  executing  or  procuring  the 
execution of  the Miscellaneous  Works (if  any) and  carrying out  its  other 
obligations under the Entrustment Agreement  in relation to the  Miscellaneous 
Works (if any), Government  shall pay to the  Company the Miscellaneous  Works 
Fee. Government  is also  required  to bear  certain  Third Party  Costs,  any 
Interface Works Costs and any Direct Costs.

Certain  of  the  Railway  Works  involve  modifications  to  or  upgrades  or 
expansions of a group  of assets (including  rolling stock, signalling,  radio 
and main control  systems), for  which the  Company is  responsible under  the 
existing service concession agreement with KCRC. The Company will  contribute 
approximately HK$7.0 billion (in 2011 prices) in respect of the costs relating
to such modifications,  upgrades or  expansions. This  will predominately  be 
covered by the reduction in future maintenance capital expenditure during  the 
construction period of the SCL Project which the Company would have  otherwise 
incurred.

Pursuant to the Entrustment Agreement, the Company shall carry out or  procure 
the carrying  out  of  the  Entrustment  Activities  in  accordance  with  all 
applicable laws,  regulations,  by-laws,  the  MTR  Ordinance,  the  Operating 
Agreement and the Entrustment Agreement.

Government shall use  reasonable endeavours  to provide the  Company with  any 
information or assistance of a non-financial nature reasonably required by the
Company, so  as  to enable  the  Company to  meet  its obligations  under  the 
Entrustment Agreement.

As Government is  a substantial  shareholder of  the Company  and therefore  a 
"connected person" of the  Company (as defined in  Chapter 14A of the  Listing 
Rules), the Entrustment  Agreement is a  continuing connected transaction  for 
the Company  under Rule  14A.13 and  Rule  14A.14 of  the Listing  Rules.  As 
disclosed in previous  announcements by  the Company, the  Stock Exchange  has 
granted the Waiver to the Company which exempts it from strict compliance with
the requirements under Chapter 14A of the Listing Rules which would  otherwise 
apply to continuing connected transactions between the Company and Government,
subject to conditions  described below  under the heading  "GENERAL". Had  the 
Waiver not been granted, the Entrustment Agreement would have been subject  to 
the   announcement,   reporting   and   independent   shareholders'   approval 
requirements under Chapter 14A of the Listing Rules.

The Entrustment Agreement constitutes  a transaction under  Chapter 14 of  the 
Listing Rules.  As  each  of the  revenue  ratio,  the assets  ratio  and  the 
consideration ratio, as applied  in respect of  the Entrustment Agreement,  is 
more than 5% but less than  25% and each of the  other ratios is less than  5% 
(or does  not apply),  the Entrustment  Agreement constitutes  a  discloseable 
transaction  for  the  Company  which  is  subject  to  the  notification  and 
announcement requirements under the Listing Rules.

This announcement is made in accordance with the conditions of the Waiver  and 
Rules 14.34 and 14A.47 of the Listing Rules.

Details of the  Entrustment Agreement  will be  disclosed in  the next  annual 
report of the  Company in accordance  with the  terms of the  Waiver and  Rule 
14A.46 of the Listing Rules.
THE ENTRUSTMENT AGREEMENT
The Entrustment  Agreement relates  to the  SCL which  is one  of the  railway 
projects recommended for  implementation in  Government's Railway  Development 
Strategy 2000.  The SCL  comprises  two parts;  firstly  it will  extend  the 
existing Ma On Shan Line from Tai Wai  to the West Rail Line via East  Kowloon 
and secondly it will extend the existing East Rail Line across the harbour  to 
Wan Chai North and Admiralty. The Entrustment Agreement contains (inter alia)
the terms described below:
Parties:
(1)                       the Company; and
(2)                       Secretary for  Transport  and  Housing  for  and  on 
                          behalf of Government.
The Company's obligations
Pursuant to the Entrustment Agreement, the Company shall carry out or  procure 
the carrying  out  of  the  Entrustment  Activities  in  accordance  with  all 
applicable laws,  regulations,  by-laws,  the  MTR  Ordinance,  the  Operating 
Agreement and the Entrustment Agreement.

The Company  and Government  may agree  that the  Company will  carry out  (or 
procure the carrying  out of)  certain additional works  for Government  (such 
agreed additional works being "Miscellaneous Works"). Miscellaneous Works  (if 
any) are to be carried out  by the Company in the  same manner as if they  had 
formed part of the Entrustment Activities.

The Company will provide to  Government by the end  of each calendar month,  a 
progress report on  the Entrustment Activities  that were carried  out in  the 
immediately preceding calendar  month and, within  three months following  the 
earlier of handover  of the SCL  Project to Government  or termination of  the 
Entrustment Agreement, a final report on the Entrustment Activities.

The Company will let all contracts with Third Parties under its conditions  of 
contract and act  in accordance  with certain  of its  management systems  and 
procedures specified in the Entrustment Agreement.

The Company will, to the satisfaction of Government, carry out or procure  the 
carrying out  of  the Entrustment  Activities  for  the RRIW,  the  EPIW,  the 
Property Development Enabling Works and  the Miscellaneous Works (if any),  in 
accordance with  specifications  and/or standards  to  be agreed  or,  in  the 
absence of agreement,  reasonably stipulated by  Government or other  relevant 
public bodies.

In reaching  any  commercial settlements  with  Third Parties  which  are  not 
strictly in accordance with the terms of the relevant contract or which  amend 
the terms of the relevant contract, the Company will seek to ensure that  such 
settlements are  in  the best  interests  of the  SCL  Project, shall  act  in 
accordance with its relevant commercial  settlement procedures and shall in  a 
timely manner consult with the Project Supervision Committee in respect of any
proposed commercial settlement  before such  settlement is  considered by  the 
Company's internal project control group.

The Company shall be responsible for  the care of all works constructed  under 
the SCL  Project from  the  commencement of  construction  until the  date  of 
handover of those works (if any) to  Government (or to a third party  directed 
by  Government)  and  for  completing  or  procuring  the  completion  of  any 
outstanding works and/or defective works  identified prior to the handover  of 
the works.

During the period  of twelve  years following the  issue of  a certificate  of 
completion in respect of works carried  out under any contract with any  Third 
Party, the Company shall be responsible for the repair of any defects in  such 
works that are identified following the expiry of any defects liability period
under the relevant  contract. In relation  to certain Interface  Works to  be 
constructed by the Company,  during the period of  twelve years following  the 
issue of  a  certificate of  completion  by the  Company  in respect  of  such 
Interface Works,  the Company  shall  be responsible  for  the repair  of  any 
defects in such Interface Works.
Project Supervision Committee
The Project  Supervision  Committee  shall hold  monthly  meetings  to  review 
progress  under  the   Entrustment  Agreement  and   to  monitor   procurement 
activities, post-tender  award  cost  control and  resolution  of  contractual 
claims, in each case, associated with the SCL Project, in accordance with  its 
terms of reference.

Unless otherwise agreed between Government and the Company, the Company  shall 
send a representative or representatives to attend all meetings of the Project
Supervision Committee and such representatives shall provide such information,
co-operation and  assistance  as,  in each  case,  Government  may  reasonably 
require, and  be  entitled  to  receive any  papers  which  are  prepared  for 
consideration at the meetings of the Project Supervision Committee.
Warranties
Under the Entrustment Agreement the Company warrants that:
(A)                       in the  case of  those Entrustment  Activities  that 
                          relate  to  the  provision  of  project   management 
                          services,  such  Entrustment  Activities  shall   be 
                          carried out with the skill and care reasonably to be
                          expected of  a  professional and  competent  project 
                          manager;
(B)                       in the  case of  those Entrustment  Activities  that 
                          relate to  the provision  of design  services,  such 
                          Entrustment Activities shall be carried out with the
                          skill and  care  reasonably  to  be  expected  of  a 
                          professional and competent design engineer; and
(C)                       in the  case of  those Entrustment  Activities  that 
                          relate to the  carrying out  of construction  works, 
                          such Entrustment  Activities  shall be  carried  out 
                          with the skill  and care reasonably  to be  expected 
                          of, and by utilising such plant, goods and materials
                          reasonably to  be  expected from,  a  competent  and 
                          workmanlike construction contractor.
FINANCIAL UNDERTAKINGS
The Company and Government's obligations

In consideration of the  Company executing or procuring  the execution of  the 
Entrustment Activities  (other  than the  Miscellaneous  Works (if  any))  and 
carrying out  its  other  obligations under  the  Entrustment  Agreement,  the 
Preliminary Entrustment Agreement and the Advance Works Entrustment Agreement,
Government shall pay to the Company the Project Management Cost on a quarterly
basis and,  in  consideration  of  the  Company  executing  or  procuring  the 
execution of  the Miscellaneous  Works (if  any) and  carrying out  its  other 
obligations under the Entrustment Agreement in relation to the  Miscellaneous 
Works (if any), Government  shall pay to the  Company the Miscellaneous  Works 
Fee. Government is also required to  bear certain Third Party Costs,  certain 
Interface Works Costs and any Direct Costs.

Certain  of  the  Railway  Works  involve  modifications  to  or  upgrades  or 
expansions of a group  of assets (including  rolling stock, signalling,  radio 
and main control  systems), for  which the  Company is  responsible under  the 
existing service concession agreement with KCRC. The Company will  contribute 
approximately HK$7.0 billion (in 2011 prices) in respect of the costs relating
to such modifications,  upgrades or  expansions. This  will predominately  be 
covered by the reduction in future maintenance capital expenditure during  the 
construction period of the SCL Project which the Company would have  otherwise 
incurred.

Government shall  bear  all  land acquisition,  clearance  and  related  costs 
(including all amounts arising  as a result of  any claim for compensation  by 
any third party) and those costs which are incurred by the Lands Department in
connection with the SCL Project.

The maximum aggregate  amount payable  by Government  to the  Company for  the 
Entrustment Cost  under  the  Entrustment Agreement  is  limited  to  HK$3,000 
million per annum and a total in aggregate of HK$15,000 million. The  maximum 
aggregate amount payable by the Company  to the Government in relation to  its 
contribution to the Railway Works  under the Entrustment Agreement is  limited 
to HK$4,000 million per annum and a total in aggregate of HK$15,000 million.

Government shall  use  reasonable  endeavours  to  provide  the  Company  with 
assistance of a non-financial nature reasonably required by the Company, so as
to enable the Company to meet its obligations under the Entrustment Agreement.
Term

The Entrustment Agreement commences on 29  May 2012 and remains in full  force 
and  effect  until  the  completion  of  the  Entrustment  Activities   unless 
terminated earlier in accordance with the terms of the Entrustment Agreement.
Modifications to SCL Project
Under the terms  of the  Entrustment Agreement,  either of  Government or  the 
Company may propose  material modifications  in writing  to the  scope of  the 
entrustment works,  the scope  of the  Entrustment Activities  and/or the  SCL 
Project programme. If the relevant party  wishes to proceed with the  material 
modification proposed by it, the parties will endeavour to agree on the  terms 
of such modification. Any increase in cost shall be borne by Government.
Mutual Co-operation
Each of  Government  and  the  Company  shall  use  reasonable  endeavours  to 
co-operate with the other in relation to the preparation of any submission  or 
other document to  various authorities including  the Legislative Council  and 
relevant District Councils.


REASONS FOR THE TRANSACTION
The Company's principal activities include  activities in relation to  railway 
projects  of  the   nature  provided   for  in   the  Entrustment   Agreement. 
Consequently, the  Company  believes  that  its  entry  into  the  Entrustment 
Agreement will reinforce the Company's position as a leading provider of  such 
services in Hong Kong.
The Directors (including the independent non-executive Directors) believe that
the terms of the Entrustment Agreement are on normal commercial terms, in  the 
ordinary and usual course of business  of the Company and fair and  reasonable 
and in the interests of the shareholders of the Company as a whole.
GENERAL
As Government is  a substantial  shareholder of  the Company  and therefore  a 
"connected person" of the  Company (as defined in  Chapter 14A of the  Listing 
Rules), the Entrustment  Agreement is a  continuing connected transaction  for 
the Company  under Rule  14A.13 and  Rule  14A.14 of  the Listing  Rules.  As 
disclosed in previous  announcements by  the Company, the  Stock Exchange  has 
granted the  Waiver  to the  Company  which, subject  to  certain  conditions, 
exempts it from strict compliance with  the requirements under Chapter 14A  of 
the Listing Rules which  would otherwise apply  to connected transactions  and 
continuing connected transactions between  the Company and Government.  Under 
the Waiver, the Company is required to make an announcement in respect of  the 
Entrustment Agreement in accordance with Rule 14A.47 of the Listing Rules  and 
to disclose details of the Entrustment Agreement in its next annual report  in 
accordance with Rule 14A.46  of the Listing Rules.  The Waiver also  requires 
the Company to make the Entrustment  Agreement subject to the approval of  the 
Board, with the Directors appointed by  the Government under Section 8 of  the 
MTR Ordinance and any  Director who holds a  position in the Government  being 
required  to  abstain  from  voting.  Accordingly,  each  of  Professor  Chan 
Ka-keung, Ceajer, the Secretary for Transport and Housing and the Commissioner
for Transport had left the relevant  Board meeting prior to discussion of  the 
Entrustment  Agreement  and  voting  by  the  Board  on  the  relevant  Board 
resolutions.
The Entrustment Agreement constitutes  a transaction under  Chapter 14 of  the 
Listing Rules.  As  each  of the  revenue  ratio,  the assets  ratio  and  the 
consideration ratio, as applied  in respect of  the Entrustment Agreement,  is 
more than 5% but less than  25% and each of the  other ratios is less than  5% 
(or does  not apply),  the Entrustment  Agreement constitutes  a  discloseable 
transaction  for  the  Company  which  is  subject  to  the  notification  and 
announcement requirements under the Listing Rules.

This announcement is made in accordance with the conditions of the Waiver  and 
Rules 14.34  and 14A.47  of the  Listing Rules.  Details of  the  Entrustment 
Agreement will  be disclosed  in the  next  annual report  of the  Company  in 
accordance with Rule 14A.46 of the Listing Rules and the terms of the  Waiver. 
Had the Waiver  not been granted,  the Entrustment Agreement  would have  been 
subject  to  the  reporting,  annual  review,  announcement  and   independent 
shareholders' approval requirements under Chapter 14A of the Listing Rules.
As the Entrustment Agreement is a continuing connected transaction, the  terms 
of the Waiver also require, amongst other things, the following:
(a)         the independent  non-executive Directors  shall review  the 
                   transactions under the Entrustment Agreement every year and
                   confirm  in   the  Company's   annual  report   that   such 
                   transactions have been entered into:
                   (1)              in the ordinary  and usual  course of  the 
                                    business of the Company;
                   (2)              either on normal  commercial terms or,  if 
                                    there   are   no   sufficient   comparable 
                                    transactions to judge whether they are  on 
                                    normal commercial terms, on terms no  less 
                                    favourable  to  the  Company  than   terms 
                                    available to  or  from  independent  third 
                                    parties; and
                   (3)              in   accordance   with   the   Entrustment 
                                    Agreement  on  terms  that  are  fair  and 
                                    reasonable and  in  the interests  of  the 
                                    shareholders of the Company as a whole;
(b)          the auditors of  the Company shall  provide a  confirmation 
                   letter to the  Board each year  (with a copy  to the  Stock 
                   Exchange at  least  10  business days  prior  to  the  bulk 
                   printing of the Company's annual report) in accordance with
                   the terms of the Waiver;
(c)                the Company  shall  allow,  and shall  use  its  reasonable 
                   endeavours to  procure  that  Government  will  allow,  the 
                   auditors of the Company sufficient access to their  records 
                   for the purposes  of giving the  confirmation in  paragraph 
                   (b) above;
(d)          the Company shall  state in its  annual report whether  its 
                   auditors have  given  the  confirmation  in  paragraph  (b) 
                   above; and
(e)         the Company shall  notify the Stock  Exchange promptly  and 
                   publish an  announcement  if  it knows  or  has  reason  to 
                   believe the independent non-executive Directors and/or  the 
                   auditors of  the  Company will  not  be able  to  give  the 
                   confirmations in paragraphs (a) and (b) above.
PRINCIPAL ACTIVITIES OF THE COMPANY
The principal activities of the Company and its subsidiaries are:
(a)                the operation of  a modern railway  system with lines  from 
                   Central to Tsuen Wan (Tsuen Wan  Line), from Yau Ma Tei  to 
                   Tiu Keng Leng (Kwun Tong Line), from Po Lam and LOHAS  Park 
                   to North  Point (Tseung  Kwan  O Line),  from Chai  Wan  to 
                   Sheung Wan  (Island Line),  from Hong  Kong to  Tung  Chung 
                   (Tung  Chung  Line),  from  Hong  Kong  to  the  Hong  Kong 
                   International Airport and then AsiaWorld-Expo both at  Chek 
                   Lap Kok  (Airport Express),  from Sunny  Bay to  Disneyland 
                   Resort (Disneyland  Resort  Line),  from Hung  Hom  to  the 
                   boundary at Lo Wu  and Lok Ma Chau  (East Rail Line),  from 
                   Tai Wai to Wu Kai Sha (Ma  On Shan Line), from Hung Hom  to 
                   Tuen Mun (West Rail Line), the North-west Railway (commonly
                   known as Light Rail) in  the North-West New Territories  of 
                   Tuen Mun, Tin Shui Wai and Yuen Long, an intercity  railway 
                   system between  Hong  Kong and  some  major cities  in  the 
                   Mainland of China,  and feeder bus  services in support  of 
                   West Rail Line, East Rail Line and Light Rail;
(b)                property development, either  as owner or  as an agent  for 
                   KCRC,  at  locations  along   the  related  railway   lines 
                   including the Tseung Kwan O Line, the Ma On Shan Line,  the 
                   East Rail Line,  the Light  Rail, the West  Rail Line,  the 
                   Kwun Tong Line Extension and the South Island Line (East);
(c)                related commercial  activities,  including the  letting  of 
                   advertising and  retail space,  enabling  telecommunication 
                   services  on  the  railway  system,  asset  management  and 
                   leasing  management  of  investment  properties  (including 
                   shopping malls  and offices),  and property  management  of 
                   office buildings and residential units;
(d)                the investment in a  50% equity share  in the operation  of 
                   the   seven-year   UK's   London   Overground   Concession, 
                   consisting of five London railway lines;
(e)                the investment in  the operation  (including rolling  stock 
                   maintenance which is undertaken  by a 50:50 joint  venture) 
                   of the  eight-year  Sweden's  Stockholm  Metro  Concession, 
                   consisting of three  lines, linking  the Swedish  capital's 
                   central areas with surrounding suburbs;
(f)                the investment  in  a  60% equity  share  in  Metro  Trains 
                   Melbourne of an eight-year concession for the operation and
                   maintenance of the Melbourne train system, consisting of 15
                   lines, linking Melbourne's  central business district  with 
                   surrounding suburbs;
(g)                the design and construction of  the West Island Line as  an 
                   extension of the Island Line;
(h)                the  design,  construction,  procurement  of  services  and 
                   equipment, and all other  matters associated with  bringing 
                   the Hong Kong Section  of the Guangzhou-Shenzhen-Hong  Kong 
                   Express Rail Link into service;
(i)                the design and construction of the Kwun Tong Line Extension
                   and the South Island Line  (East) as the system  extensions 
                   of the railway network;
(j)                the planning  and design  of  the SCL  as a  major  railway 
                   project for which Government has confirmed policy support;
(k)                the operation of  the Tung  Chung to Ngong  Ping Cable  Car 
                   System and the Theme Village in Ngong Ping, Lantau  Island, 
                   Hong Kong;
(l)                worldwide    consultancy    services    and     contracting 
                   opportunities covering all areas  of expertise required  in 
                   the project management, planning, construction,  operation, 
                   maintenance  and   up-grading   of   railways   plus   fare 
                   collection,   property    integration/development    advice 
                   including other  property related  services and  advice  on 
                   generation of non-fare revenues;
(m)                investment in Octopus Holdings Limited, a subsidiary of the
                   Company, which has  business activities both  in Hong  Kong 
                   and overseas including the operation of a contactless smart
                   card system by its subsidiary Octopus Cards Limited for the
                   collection of payments for both transport and non-transport
                   applications in Hong Kong;
(n)                equity investments and long term operations and maintenance
                   contracts outside of Hong Kong;
(o)                property management, shopping  mall investment and  railway 
                   related property development  business in  the Mainland  of 
                   China;
(p)                the investment in a 49% equity interest in a joint  venture 
                   for the investment, construction  and operation of  Beijing 
                   Metro Line 4, under a 30 year concession agreement with the
                   Beijing   Municipal   Government,   and   operations    and 
                   maintenance of Beijing Metro  Daxing Line, an extension  of 
                   the Beijing Metro Line  4, under a  10 year operations  and 
                   maintenance concession agreement with Beijing Metro  Daxing 
                   Line Investment Company Limited, a wholly owned  subsidiary 
                   of Beijing Municipal Government;
(q)                the investment  in  the  design,  construction  and  future 
                   operations of Phase  2 of Shenzhen  Metro Line 4;  together 
                   with the  operations  of  Phase  1,  a  double-track  urban 
                   railway running  from  Futian Checkpoint  at  the  boundary 
                   between  Hong   Kong  and   Shenzhen,  under   a  30   year 
                   Build-Operate-Transfer  concession   agreement   with   the 
                   Shenzhen Municipal Government; and
(r)                the acquisition of the land use right of the land lot above
                   the  Shenzhen  Metro  Line  4  Depot  by  two  wholly-owned 
                   subsidiaries of the Company in August 2011. The lot with a
                   total gross  floor  area of  approximately  206,167  square 
                   metres  will  be  used   for  residential  and   commercial 
                   development.
DEFINITIONS
In this announcement,  unless the  context otherwise  requires, the  following 
expressions have the following meanings:
"Board" means the board of directors of the Company.
"Concession Approach" has the meaning ascribed  to that term in the  Operating 
Agreement.
"Direct Costs" means  any and all  charges, costs and  amounts payable to  any 
Government department, bureau, agency or  body in relation to the  Entrustment 
Activities, including  without limitation,  any  internal charges,  costs  and 
amounts of Government, any Government department, bureau, agency or body.
"Directors" means members of the Board.
"Entrustment Activities"  means  all  activities,  including  the  procurement 
thereof, as detailed in the Entrustment Agreement which are related to, as the
case may be, the Railway Works,  the EPIW, the RRIW, the Property  Development 
Enabling Works  and the  Interface  Works and  all activities,  including  the 
procurement thereof, as agreed  between Government and  the Company which  are 
related to the  Miscellaneous Works  (if any), and  which, in  each case,  are 
required for  the planning,  design, construction,  testing and  commissioning 
thereof in relation to the SCL Project.
"Entrustment Cost"  means the  total  cost to  Government of  the  Entrustment 
Activities including, but not limited to:
(a)            the Third Party Costs less the aggregate of Funding  Percentage 
               Amount;
(b)            the portion of the Project  Management Cost in relation to  the 
               Entrustment Activities;
(c)            the  Interface  Works  Cost  (subject  to  the  terms  of   the 
               Entrustment Agreement); and
(d)            the Miscellaneous Works Fee (if any).
"Essential Public Infrastructure Works" or "EPIW" means any item of work which
is described as such in the Entrustment  Agreement as the same may be  updated 
from time to time and, for the avoidance of doubt, is not described as forming
part of the Railway Works but is associated with the SCL.
"Funding Percentage Amount"  means in  respect of  each relevant  item of  the 
Railway Works,  the  amount to  be  borne by  the  Company, as  calculated  in 
accordance with the Entrustment Agreement.
"Government" means the government of Hong Kong.
"Hong Kong" means the Hong Kong Special Administrative Region of the  People's 
Republic of China.
"HK$" means Hong Kong dollars, the currency of Hong Kong.
"Interface Works" means any item of work which is described as such under  the 
Entrustment Agreement.
"Interface Works Cost" means the costs  incurred by the Company in  completing 
the Interface Works as  described as such in  accordance with the  Entrustment 
Agreement.
"KCRC" means the Kowloon-Canton Railway Corporation.
"Listing Rules" means  the Rules Governing  the Listing of  Securities on  The 
Stock Exchange of Hong Kong Limited.
"Miscellaneous Works Fee" means an amount the Company is entitled to be  paid, 
being an amount equal  to the Relevant Fixed  Percentage of Third Party  Costs 
attributable to the Miscellaneous Works from time to time.
"MTR Ordinance" means the Mass Transit Railway Ordinance (Cap. 556 of the Laws
of Hong Kong).
"Operating Agreement" means the operating  agreement dated 9 August 2007  made 
between Secretary for Transport  and Housing for and  on behalf of  Government 
and the Company, as contemplated in Section 4(2) of the MTR Ordinance.
"Project Management Cost" means  HK$7,893 million, to be  paid on a  scheduled 
basis to  the  Company  by  Government  in  accordance  with  the  Entrustment 
Agreement.
"Project Supervision Committee" means the committee established by  Government 
for the purposes of carrying out the activities specified in the heading above
entitled "Project Supervision Committee".
"Property Development Enabling Works" means, as at the date of the Entrustment
Agreement , the enabling works at To Kwa Wan Station and Wan Chai North  work 
sites comprising enhancement of the  foundation and structure of the  station, 
installation of necessary piles along the tunnels and station to preserve  the 
topside development  potential  of the  sites  concerned. Excluding,  for  the 
avoidance of doubt, property development enabling works at Ho Man Tin.
"Railway Works" means  any item  of work  which is  described as  such in  the 
Entrustment Agreement.
"Relevant Fixed Percentage"  means, in respect  of each item  of work  forming 
part of the Miscellaneous Works, a  fixed percentage to be agreed between  the 
Company and Government.
"Reprovisioning, Remedial and Improvement Works" or "RRIW" means, any item  of 
work which is described as such in the Entrustment Agreement.
"SCL Project" shall be construed to  include the works comprising the  Railway 
Works, the  RRIW,  the EPIW,  the  Property Development  Enabling  Works,  the 
Interface Works and the Miscellaneous Works (if any).
"Stock  Exchange" means The Stock Exchange of Hong Kong Limited.
"Third Party" means any contractor,  consultant, adviser or other third  party 
employed  or  otherwise  engaged  by  the  Company  in  connection  with   the 
Entrustment Activities.
"Third Party Costs"  means costs payable  to Third Parties  pursuant to  Third 
Party Contracts entered into in relation  to the Railway Works, the RRIW,  the 
EPIW, the Property Development Enabling Works and the Miscellaneous Works  (if 
any).
"Waiver" means the waiver  granted by the Stock  Exchange to the Company  from 
the requirements  under Chapter  14A of  the Listing  Rules whose  terms  were 
contained in  announcements made  by the  Company on  13 January  2005 and  24 
October 2005 (as amended from time to time and subject to certain conditions).
                                                     By order of the Board

                                                   Gillian Elizabeth Meller
                                                       Company Secretary
                                                    MTR Corporation Limited
Hong Kong, 29 May 2012
As at the date of this announcement:
Members of the Board:  Dr. Raymond Ch'ien  Kuo-fung (Chairman)**, Jay  Herbert 
Walder (Chief  Executive Officer),  Vincent Cheng  Hoi-chuen*, Christine  Fang 
Meng-sang*, Edward Ho  Sing-tin*, Alasdair George  Morrison*, Ng  Leung-sing*, 
Abraham Shek Lai-him*,  T. Brian Stevenson*,  Professor Chan Ka-keung,  Ceajer 
(Secretary for Financial Services and the Treasury)**, Secretary for Transport
and Housing (Eva Cheng)** and Commissioner for Transport**
Members of  the  Executive  Directorate:  Jay  Herbert  Walder,  William  Chan 
Fu-keung, Chew Tai Chong, Jacob Kam Chak-pui, Lincoln Leong Kwok-kuen, Gillian
Elizabeth Meller, David Tang Chi-fai and Jeny Yeung Mei-chun
*    independent non-executive Director
**     non-executive Director
This announcement  is  made  in English  and  Chinese.  In the  case  of  any 
inconsistency, the English version shall prevail.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


CNTBGGDULUDBGDC -0- May/29/2012 12:01 GMT
 
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