CEO Mr Lincoln Leong says construction on the delayed Kwun Tong extension is 90% complete and he expects the $HK 7.2bn ($US 930m) line to enter revenue service in the third quarter of the year. Leong is similarly optimistic that the South Island Line will be ready for its first passengers by the end of 2016, albeit late and with a revised project cost of $HK 16.9bn.

However, the news for the Express Rail Link is less promising. The new 26km underground high-speed railway will deliver trains from mainland China into the heart of Hong Kong at a striking new station at the tip of Kowloon. The line was due to open initially in 2015, but with delays and its budget ballooning 20% above the initial $HK 69bn cost to $HK 85.3bn, MTR has felt the heat from an expectant public and government.

Lincoln"This is the project that everyone wants to talk about," Leong says. "This project, like the others, has faced challenges from the ground conditions and shortages of labour in Hong Kong. But we are now certain that the Express Rail Link will be delivered by the third quarter of 2018."

These problems resulted in both internal and external inquiries and Leong says that their recommendations have been incorporated into revised working practices for the ERL as well as MTR's other ongoing project, the 17km Shatin - Central Link. This project is running 11 months behind schedule and consists of the 11km Tai Wai - Hung Hom first phase which will open in 2019, followed by the second 6km Hung Hom - Admiralty phase in 2021.

Looking back, Leong describes 2015 as a year of achievement for the operator. At the end of 2014 MTR added the 3.5km West Island Line extension to its metro network, which extended the existing line from Sheung Wan to three stations in the underserved west region of Hong Kong Island. This had added another 160,000 passengers per day to its services, which now carry 5.4 million passengers on more than 8000 trains per day, an increase from around 5000 in 2012.

MTR also invested heavily during the year, including $HK 6bn in 93 new eight-car trains from CRRC subsidiary CSR Qingdao Sifang to replace the entire first-generation fleet used on the Kwun Tong Tsuen Wan, Island, and Tseung Kwan O lines, in what is the company's largest ever rolling stock order. It is also replacing signalling systems on older lines with communications-based train control (CBTC) through a $HK 3.3bn contract with Thales and Alstom.

"This is effectively part of our new generation railway strategy," Leong says. "The signalling enhancements will increase capacity by 10% and the new trains will add to passenger comfort."

Leong adds the new generation railway strategy is considered key to meeting growing demand and to continue to realise its high performance targets. He says that the operator's record for 99.9% on-time service performance is well-known around the world, and despite more and more people using its services and the increasing demands of passengers in the social media age, it is continuing to meet and even exceed expectations.

"Our Hong Kong service performance records the monthly on-train performance and service delivery across the network," Leong says. "In April, July, August and September was the best we have ever achieved despite passenger numbers continuing to grow. We currently have annual passenger growth of 3%, and in the past seven to eight years passengers have increased by 28%."

Further progress

Outside of its domestic market, MTR is continuing to expand, with several new services added in 2015 and Leong expecting further progress in 2016.

In Beijing following the start of operations on phase 2 of Line 14 on December 28 2014, MTR is preparing to launch services on the 50km Line 16, the fourth line it will operate in the Chinese capital, and sixth overall in mainland China with operations in Shenzhen, and Hangzhou, now totalling 145.7km.

It also began operating its MTR Express Service between Stockholm and Gothenburg in March, the expanded London Overground network, and the first-phase of London's Crossrail network in May, with full services on this 110km route set to start in December 2019. In addition it secured the public-private partnership (PPP) operations trains and systems contract for the Sydney Northwest Rail Link in 2014, which complements its 60% stake in Metro Trains Melbourne (MTM).

"We are operating in mainland China, Sweden, Britain and Australia, and our aim is to keep growing in the markets where we are already established," Leong says. "We are also changing our involvement from asset light operations and maintenance in the beginning, to now being involved in PPPs for new projects."

MTR will also begin operating the PendeltÄg suburban network in Stockholm for 10 years from December 2016 after it secured the concession to operate, maintain rolling stock, and manage stations on the 241km four-line network on December 8. With an option for a four-year extension, the contract could be worth up to SKr 30bn ($US 3.5bn), and the service will complement MTR's metro operation in the city.

Leong says that the company will also find out whether it will operate the new London Overground concession in 2016.

"We are continuing to see opportunities in the cities and countries where we are already active," he says. "There are cases where we have done consultancy work, such as in the Middle East, and if we see opportunities to grow we will consider them. However, our primary focus will always remain Hong Kong as there is a lot going on here."

Indeed MTR is looking at options to fulfil the government's Railway Development Strategy 2014. This considers needs for rail up to 2031 and if realised will deliver rail services to 75% of Hong Kong homes and 85% of businesses.

Funding new line construction is achieved through MTR's rail and property business model. The operator now owns 13 shopping centres in Hong Kong and with its joint venture partner has built an estimated 15,000-17,000 apartments in the past 18 months.

It has now exported this to China with developments open and planned in Beijing and Shenzhen. However, Leong is cautious about relying too much on these types of developments to boost its financial results. "This can go up and down," he says.

Rail activities in Hong Kong accounted for $HK 12.98bn of MTR's overall revenues of $HK 20.21bn in the first half of 2015, and $HK 8.03bn of its overall profits of $HK 8.35bn before tax and income from property development is taken into account, making it one of the most profitable systems in the world.

While the gains from its ventures outside of Hong Kong are smaller, these services are now surpassing its domestic operations in terms of network length, and will become increasingly important as they mature. And with the new opportunities coming up in the first half of 2016, and new passengers set to board trains on new domestic lines in the second half of the year, MTR appears well positioned to extend its reach even further in the next 12 months.