Jay Walder, the man who introduced Oyster Card to the London Tube, talks about his vision for the Hong Kong MTR.
At six feet six, Jay Walder enjoys a unique perspective when he rides the Hong Kong MTR. “The hand rail in the middle of the carriage is just about the right height to decapitate me,” he quips. “But if I stand away from the railing, I can look up and down the entire train from one end to the other.” In a way, the New Yorker had no trouble finding an advantaged position on trains ever since he was a small boy riding the New York subway from his home in the Rockaways. “There is for me one very special memory with my dad. When I was a young kid, you could look out the front of the train from a window in the first car and see where the train was going. I was too small to be able to see over the window, so my dad used to pick me up and I would make believe that I was the train captain driving the train,” Walder recalls.
New York minute
Fast forward to reality more than four decades later, Walder, 53, became the captain driving the Metropolitan Transportation Authority (MTA), the transportation agency that runs the New York subway. It was a much more challenging drive than his childhood game, but the Queens native managed to deliver.
During his two-year tenure that began in October 2009, he helped to reduce the cash-strapped authority’s budget by some US$500 million – though the cutbacks also came with the painful price of job losses. He also made numerous service improvements by embracing new technology. New York mayor Michael Bloomberg called him “a first-rate leader with big ideas,” “a world-class transportation professional” and “the kind of person we can’t afford to lose.” But alas for New York, it did lose Walder. In July last year, the public transport expert announced that he would leave the MTA and take over Hong Kong’s MTR Corporation. It was a decision that surprised – and baffled – many.
“New York is my home city. There were few things that would be able to pry me away. Within the international transportation community, the system that I’ve always held in the highest regard, the one that I think really exemplifies what a world leading transport system can be and should be, is the MTR,” Walder explains to biz.hk.
“It was probably the only place that could cause me to really consider [leaving New York]. As much as I loved the work in New York, this was an opportunity to lead what I think is the leading transit system in the world. For someone who’s been in this business for a long time, that was an opportunity too good to pass up.”
Hong Kong opportunity
This belief of having to be quick to grasp a rare opportunity was apparently mutual for the MTR. In late 2010 when MTR’s former chief executive officer Chow Chung-kong unveiled his intention to retire in a year’s time, the rail operator went on a worldwide search for a new leader to head the corporation, which in recent years has been fast expanding at home and abroad as well as pushing ambitiously into Mainland China. The MTR, as Walder describes it, is a multi- national company with rail operations in London, Melbourne, Stockholm, as well as Beijing, Shenzhen and soon- to-be Hangzhou in China.
At such a period of change for the Hong Kong company, a veteran transit manager with an impressive and international CV like Walder apparently fit the bill. After all, he helped to overhaul the aging London Under- ground and introduced the popular Oyster smart card in his position as the managing director for finance and planning of Transport for London before chairing the MTA. And when he first joined the New York transport agency in the 1980s as a financial analyst, he worked on a large-scale program to renew the decaying subway system with its graffiti- scarred trains.
So the MTR offered him the top job, and it didn’t take long for Walder to accept it – even though the decision meant he and his wife would have to relocate to Hong Kong with only their 13-year-old son and not their two elder children, one at university and the other working in New York as a sports journalist. The trio landed in the city a year ago. Then on New Year’s Day in 2012, Walder started his new job, for which he has laid out three major priorities: delivering quality services to the public, strengthening the MTR’s links with the Hong Kong community, and maintaining growth for the company.
At the MTR, Walder does not have to face the kind of headache that he found himself battling in New York and London. While the condition of the Big Apple’s subway has improved dramatically from the 1980s, Walder still faced a whopping US$800 million budget deficit when he arrived back there in 2009. As for the London Tube, it had long been known for its unreliable service and the bad state of some stations. The MTR has none of these nagging problems. Rather, it is famous for its quality services with a punctuality rate of 99.9 percent. In this regard, heading the Hong Kong transit agency seems a relatively easy ride, but Walder says it’s everything but.
“Easy doesn’t come up very often,” he says with a laugh. “For all of the similarities and differences [between the different metro systems], the challenge is always about saying: ‘how do we continue to drive better customer service?’ The ways in which you do that may be different in each of the places, but the guiding principle is the same. Customer service is critical because there’s probably no public service that touches people more than a transit system does… At the MTR, the challenge is to make this company even greater and provide even better services. There’s nothing easy about it.”
The abundance of cash and reliable service aside, another thing that sets the MTR Corporation apart from its New York and London counterparts is its property portfolio. At present, its real estate investments include 13 shopping malls and some 80,000 apartments built above the MTR stations and depots across the territory, the majority of which are under the publicly listed corporation’s management. The New York and London transit operators are also involved in real estate investment, but to an extent not to be compared with the MTR. This for Walder is another challenge he is ready to embrace.
“No one does it to the degree to which we do right here in Hong Kong. Real estate is a much more significant part of our operation. This has been a learning experience for me. It’s not just a question of property development but also property management. So I don’t just go out and ride the trains, but I go out to our shopping malls and housing estates, meet with our managers and talk about their challenges. I think it’s incumbent upon me to do this,” he says.
For Walder, reaching out to the crowd is a familiar task. On the first day of his job at the MTA back in 2009, he was at the Flushing-Main Street subway station in Queens to meet commuters. When Hurricane Irene hit New York last summer, he greeted evacuees at the Far Rockaway-Mott Avenue station. Now in Hong Kong, he also gets out there to canvass people’s views on train services.
“A couple of weeks ago, I spent a Sunday morning in the MTR Opinion Zone. It is basically an opportunity to talk to passengers on the train and get their opinions about how we’re doing,” Walder says. “I went up to the first person and introduced myself. The passenger said: ‘I think the MTR is really great, but I do have one suggestion: the train is too cold!’ Then I went up to another person and introduced myself. She said: ‘The MTR is great, but I do have one suggestion: it’s too warm in here!’”
Obviously, it is not easy to satisfy everyone. The train temperature hasn’t been changed, but Walder says he will make an effort to listen to people and respond accordingly. With him at the helm of the MTR, Hong Kong commuters can expect a series of upgrades and improvements. These include higher train frequency (62,000 more train trips by the end of the year compared with 2011), lifts for all stations, and public toilets in inter- change stations such as Admiralty, Mongkok and Prince Edward.
The “Art in MTR” initiative, launched in 1998 to bring artwork and art-related events to train stations, will also be “taken to a whole new level.” In November, the MTR will host an international conference on art in transit for industry experts from different parts of the world to exchange ideas. Based in part on the results of the event, the MTR will expand its art program and bring in what Walder calls “the wow factor to our stations.”
But it’s not as if the public always appreciates what the MTR does. Over the last three years, the corporation has raised its fares three times based on a Fare Adjustment Mechanism (FAM) agreed with the government in 2007 which links fare adjustments to inflation and wages in the transporta- tion sector. The latest increase, at a rate of 5.4 percent, took place in June. Each time fares were raised, the MTR came under public criticism, with opponents saying it was not justified given the MTR’s annual profits (HK$14.7 billion in 2011). Finding a balance between public interest and corporate interest, as Walder admits, is a fine wire to walk.
“Fares have gone up less than inflation and less than the increase in wages, even for those at the lowest income levels. It’s good news that the mechanism works well and provides the resources we need to run the railway. At the same time, it’s not exactly what the public wants,” he says.
“That’s human nature and that’s understandable…We want to be able to ensure that the fare structure is affordable to people. On the other hand, we always need to ensure there’s sufficient money over the long term for us to be able to continue to invest in the system. We’re putting HK$4 billion every year in investing in our system, in things you don’t always get to see, such as our staff going down to the tunnel on the Island Line at 2am to chip away deteriorating concrete and put in new concrete blocks. We have to find a balance between those things.”
Currently a review is being carried out on the FAM, which is subject to an appraisal every five years. Walder believes the review will aim to strike that delicate balance between serving the public and the ability to maintain a sustainable financial model to ensure the quality of MTR services.
The first time Walder visited Hong Kong was in 1999 when he flew into town from Singapore where he was a visiting Harvard lecturer. As with many first-time visitors, he got the usual cultural shock from vibrant Hong Kong. “My hotel was near Causeway Bay. I had this incredibly peaceful trip on the Airport Express. But when I came up at Causeway Bay I was bombarded by everything that was going on there. It was a funny experience,” he says.
Now, no more a newbie, Walder knows his way around Hong Kong and he loves spending weekends on the city’s various hiking trails with his wife. On weekdays, he takes the MTR to commute and to keep his finger on the pulse of the train service. To the general public, he’s still an unfamiliar face, but he naturally stands out every time he steps into a train.
“I am always the tallest person in the carriage. I can literally look down the entire train. I have a completely different view of an MTR train than anyone else does,” he says.
As the top guy at the MTR, he surely does.
Published in biz.hk in October 2012