A new start: MTRC Chief Executive Officer CK Chow, Chief Secretary for Administration Henry Tang and MTRC Chairman Raymond Chi'en officiate at the rail merger celebration ceremony.

Today's merger of Hong Kong's two rail companies will enhance the effectiveness and long-term planning of the city's entire rail system, Chief Secretary for Administration Henry Tang says.

Speaking at the merger celebration ceremony today, Mr Tang said the move will benefit commuters with fare reductions and more convenience.

Secretary for Transport & Housing Eva Cheng said the successful merger is an important chapter in Hong Kong railway history and will bring commuters annual savings of $600 million.

"The Mass Transit Railway Corporation will have greater flexibility in planning the alignment, stations and interchange arrangement for new railway lines. This will enhance co-ordination and reduce duplication of railway lines and resources," Ms Cheng said.

The corporation has taken up the transport services of the Kowloon-Canton Railway Corporation, including the East and West Rail and Light Rail Transit networks.