Under study: Secretary for the Environment, Transport & Works Dr Sarah Liao says the final assessment of the merger proposal will take several more months to complete.

The KCR and MTR Corporations have submitted a report on their merger discussions, Secretary for the Environment, Transport & Works Dr Sarah Liao says, adding the final assessment will take several more months to complete.

The Government will discuss the issue further with the corporations and examine the report carefully before deciding the way forward. The MTR's proposals for preliminary transaction terms of the possible merger will also be studied.

Speaking to the media today, Dr Liao said details of the proposed merger cannot be disclosed as the proposal involves transport policies and a publicly listed company. Due to the sensitivity of the issue, it is inappropriate for the Government to release the details at this stage.

She expected the merger to provide an opportunity for more effective use of resources and a reduction in fares.

The Government invited the two corporations in February to explore the feasibility of a merger.

Merger beneficial

To ensure the public can benefit from the merger exercise, the Government has set a number of key parameters for the talks. They are:

* the adoption of a more objective and transparent fare adjustment mechanism;

* the abolition of a second boarding charge and review of the fare structure with the objective of reducing fares;

* the early resolution of interchange arrangements for rail projects under planning;

* the corporations' assurance of job security for frontline staff at the time of the merger; and,

* the provision of seamless interchange arrangements in the long run.

The report includes a joint assessment on how the Regional Express Line can be accommodated in the railway network as the Government requested last month.

Dr Liao thanked the two corporations and their staff for the hard work they have put into the merger discussions.

When asked about the progress of the proposed Sha Tin to Central Link, Dr Liao pointed out studies are going on and the proposed merger will not hinder the progress.

Staff interests considered

MTR Corporation Chief Executive Officer Chow Chung-kong and KCR Corporation Acting Chief Executive Office Samuel Lai said the report has adressed the Government's concerns and taken into account interests of all parties, including staff and passengers.

Both pledged to ensure staff interests are looked after in the event of a merger, and believed new projects and future business expansion will create new opportunities for staff.