PLC Paper No. LS 90

Paper for the House Committee Meeting
of the Provisional Legislative Council
on 13 February 1998

Legal Service Division Report on Kowloon-Canton Railway Corporation (Amendment) Bill 1998

Object(s) of the Bill

The purpose of the Bill is to make amendments to the Kowloon-Canton Railway Corporation Ordinance (Cap. 372) ("the Ordinance" to :-

  1. allow the Kowloon-Canton Railway Corporation ("KCRC" to build additional railways;

  2. to introduce a simpler mechanism for the vesting of land required for the operation of the KCRC's railways and for the divesting of land which is no longer required for such purpose; and

  3. to provide for a new finance structure for the KCRC to enable Government to inject equity into the KCRC towards funding the construction of new railways.

PLC Brief Reference

2.TBCR 2/1/2/1016/89(97) dated 20 January 1998 issued by the Transport Bureau.

Date of First Reading

3.11 February 1998.


4.The existing provisions of the Ordinance empower the KCRC to operate the Kowloon-Canton Railway ("East Rail") and to construct and operate the North-west Railway ("light Rail"). However, the Ordinance, as it now stands, does not empower the KCRC to construct and operate new railways. In addition, unlike the Mass Transit Railway Ordinance (Cap. 270) ("MTRC Ordinance") and the Airport Authority Ordinance (Cap. 483) ("A Ordinance"), the Ordinance does not provide for Government's ownership through share holding. This lack of a proper share capital structure may create unnecessary difficulties for the KCRC in raising commercial loans which are needed to finance the construction of new railway projects including West Rail, the Ma On Shan to Tai Wai Rail Link and East Rail Extension from Hung Hom to Tsim Sha Tsui.

5. The Bill seeks to remove the above deficiencies by enabling the Secretary for Transport to authorize the KCRC to construct additional railways and establishing a new finance structure providing for a proper share capital structure and a mechanism for dividend payments to Government. The provisions relating to finance are modelled on those in the MTRC Ordinance and AA Ordinance. According to the Administration, this new finance structure will enable Government to inject equity into the KCRC towards funding the construction of new railway and the KCRC will also be able to raise funds to finance any remaining project costs.

6.The Bill also introduces a simpler mechanism for the vesting of land in the KCRC for operational purposes of railways and for the divesting of land which is no longer required for such purpose. At present, land for operational purposes of the existing railways is vested in the KCRC by way of Schedules to the Ordinance. This means that every time the construction of railway is completed, the Ordinance will have to be amended and a new Schedule will have to be included in order to vest the required land in the KCRC. Where additional land is required for operational purposes or where vested land is no longer required, the Schedules will have to be amended before changes to the area of vested land can be effected. Under the Bill, the vesting or divesting of land will be effected by way of the Director of Lands depositing in the Land Registry a plan showing the details of vesting or divesting. Pursuant to the vesting and divesting of land, the Director of Lands will, by notice in the Gazette, publish a statement that a plan has been deposited in the Land Registry.

7.Other provisions of the Bill provide for the following matters :

  1. the operation and regulation of carparks constructed in association with the railways and managed and controlled by the KCRC ;

  2. transferring the power to make regulations to the Secretary for Transport; and

  3. repealing the provision on acquisition of land by Government for the KCRC (section 28), which has become obsolete as land for new railway projects will be resumed under the Railways Ordinance (59 of 1997). 8.If enacted, the Bill would come into operation on a day to be appointed by the Secretary for Transport by notice in the Gazette.

Public Consultation

9.The Administration has consulted the KCRC on the Bill. The KCRC is satisfied with the proposed amendments to the Ordinance to be made by the Bill.

Consultation with PLC Panel

10.There has not been any consultation with any PLC Panel on the Bill. However, the Administration will brief members of the Joint Panels on Financial Affairs and Transport on 12 February 1998 on equity injection by Government into the KCRC for implementation of West Rail which will become possible upon enactment of the Bill.


11.Although the provisions on finance are new to the Ordinance, similar provisions are already found in the MTRC Ordinance and AA Ordinance. Members may consider whether it is necessary to set up a Bills Committee to study those finance-related provisions in detail.

12.In the meantime, the Legal Service Division is seeking clarification from the Administration on the drafting aspects of the Bill.

Prepared by

FUNG Sau-kuen, Connie
Assistant Legal Adviser
Provisional Legislative Council Secretariat
10 February 1998