In 2007, the Hong Kong MTR Corporation Limited (MTRC) was proposed 20% stake in Metronet Rail (Metronet), one of the two private consortia engineering contract to run and maintain the London Underground rail network, 30-year public-private partnership (PPP) agreement with London Underground Limited (LUL). These investments have the potential to transform the MTRC from the local train operator in the international player, giving the company a foothold in the major operating systems of urban railways in Europe. However, LUL PPP was widely known as one of the most complicated mechanisms of private funding in the UK public sector, and there were a lot of uncertainties in the Hong Kong MTRC fight on their ability to achieve a successful project. This case would allow students to explore the motives of PPP agreements for state-owned assets and the effects of PPP for the operational management and financial strategy. At the same time, students can also evaluate the proposal on MTRC and the desirability of the Company. "Hide
by Arthur McInnes, Frederik Pretorius, Alison Bate Source: University of Hong Kong, 21 pages. Publication Date: April 3, 2009. Prod. #: HKU819-PDF-ENG