Hong Kong's MTR terminates Stockholm suburban rail services contract (updated)

MTR

01/11/2023 10:07

(Updates with details and background in paragraphs 2, 4-7)
       Nov 1 (Reuters) - Hong Kong's subway operator MTR Corp
 0066.HK  said on Wednesday it was terminating a 10-year
contract with Sweden's Stockholm City Council to operate and
maintain the city's suburban rail services via its subsidiary
MTR Nordic.
    MTR Corp, which also operates the London Overground railway
service in a joint venture with Germany's Deutsche Bahn, will
recognise a charge of around SEK 1 billion ($89.36 million)
against its earnings for fiscal 2023.
    Stockholm's suburban rail services are operated by MTR
Pendeltågen AB, a subsidiary of MTR Nordic, which will pay SEK
580 million ($51.88 million) to the city council in relation to
terminating the contract.
    The contract was originally signed in 2015, with MTR taking
over as operator in December 2016.
    MTR, in its 2023 interim results, had flagged challenges
faced by its loss-making Stockholm operations due to a shortage
of local drivers and maintenance issues.
    "The company was working hard to improve the financial
situation of this business, which had been operating at a loss,
and was reviewing its options for how best to proceed," MTR said
in an exchange filing.
    MTR Pendeltågen AB will transfer managing the rail services,
certain inventory, spares and assets to a new operator.
    
    

($1 = 11.1791 Swedish crowns)


 (Reporting by Rishav Chatterjee in Bengaluru; Editing by
Shinjini Ganguli and Shilpi Majumdar)
 ((Rishav.Chatterjee@thomsonreuters.com;))