The merging of the two railways will bring about a win-win situation, Secretary for the Environment, Transport & Works Sarah Liao says, adding that it will provide a necessary framework to pursue the adoption of a more objective and transparent fare-adjustment system.

Under a merged structure, the second boarding charge should be abolished, she said.

Speaking on a radio talk show this morning, Dr Liao said a merger will provide an opportunity for synergies that can benefit the public at large.

It will lead to larger economies of scale in the railway operations, maximise the use of the existing railway facilities, streamline the management structure and reduce overlaps in service provision.

She said the Government is concerned about the two corporations' frontline staffs' job security, adding that it has made it a parameter for the negotiations that the corporations should ensure the merger will not cause job losses.

Both companies have made the pledge, she added.

Government does not have the final say

As a single owner of the Kowloon-Canton Railway and the biggest shareholder of the Mass Transit Railway, the Government will not have a final say on the merger, she said, adding that the consent of the 400,000 MTRC minority shareholders must be obtained.

She said the merger is a complicated issue as the Government has to protect the public's interests and the smooth operation of the stock market.

The Legislative Council will also be consulted in due course, she added.