Rolling with the times

05/01/2017


Trams or “ding dings” have been rattling along the north shore of Hong Kong Island for 113 years. But with a modern metro system and increased congestion bringing down ridership, the aging trams must keep pace. Carol Lu, Chief Finance Officer at Hong Kong Tramways, talks to Jemelyn Yadao about the challenges of preserving a part of the city's heritage

Clattering and shaking through the busy commercial districts of Hong Kong, the tram is a daily reminder of the city's slower-paced colonial past. But to the staff at the Whitty Street Tram Depot in Shek Tong Tsui, Hong Kong Tramways' main depot for tram manufacturing and maintenance, it is a product of laborious hours at the workshop, and their artisanal skills.

Cheerful workers wash down the exterior of a parked tram with a hose, while on the other side, engineers cut and hammer away at metal. Sheets of aluminum and engine parts are stacked all over the depot, and rustic tools and machinery look like they have been used for decades. On average, the depot produces one tram every month.

“The tram fleet has been operating since 1950s. In the 1980s, Tramways started renewing the fleet, from the fifth generation model to sixth generation,” says Carol Lu, Chief Financial Officer at Hong Kong Tramways, which celebrates its 113th anniversary this year. “We have kept a one-and-only fifth generation tram as a regular passenger tram. Tram fans often chase after the tram for photographs,” she adds, referring to tram no.120.

Launched in 1904, Tramways runs a fleet of 164, including its distinctive 1920s-style open-balcony sightseeing tram, two party trams – one green and one red – for tourists and private hires.

Most locals rely on the electric double-decker trams, also known as “ding dings,” for its affordability (HK$2.3 for adults, HK$1.10 for seniors and HK$1.20 for children) and convenience for short-distance trips. “For every 250 metres there's a stop. It's also green because it doesn't emit any toxic emissions on the road,” says Lu, who joined Tramways in April last year.

While being a welcome constant amid an ever-changing metropolis, trams have been criticized by some as being too slow, and even to blame for traffic jams in Central. In 2009, the company was acquired by RATP Dev Transdev, a joint venture between the operator of the Paris metro and another French government-controlled transport group. It has been focused on modernizing the aging trams given the competition it faces from the constantly improving MTR system and increase in private cars. The daily average number of tram passengers fell from 220,000 in 2011, to 185,000 in June last year.

“Since the opening of the West Island Line, our ridership has actually dropped by around 10 percent. Also the increasing traffic on the road decreases our tram speed by almost three times,” says Lu. She adds that according to company statistics, trams in Admiralty, where there are dedicated tram lanes, can go up to 22 kilometres per hour. But in non-dedicated tram lanes at Happy Valley, the trams can slow to 2 km an hour. “So walking would be faster,” she adds. “With the opening of the MTR West Island Line and the new Central-Wanchai bypass, which will free up more road space, we hope that the government will consider resuming more tram dedicated lanes.”

Another obstacle is the current relocation of the company's Times Square substation, a move that is expected to cost more than HK$30 million, says Lu. “Adding to this financial burden, together with the rising operation costs, we need to keep investing resources and effort in enhancing our service to meet with our passengers’ expectations.”



Ding Ding Data

Tramways is now operating its seventh generation tram model. With an aluminum tram body structure that is more durable than wood, the “signature tram” allows more space inside the compartment and includes energy-efficient LED lights. So far, 58 out of 164 trams are signature trams, according to Lu. “This is one of the ways we are trying to provide a more quality service, and attract more people to take the tram.”

Lu challenges the general perception of the trams being the mode of transport for Hong Kong's elderly. “Actually, younger generations will now take the tram. Last year, some of my friends told me that they take tram when playing that Pokemon Go game because of the tram speed,” laughs Lu. “You can catch it (the Pokemon creatures) and it's very economical way of travelling from the west end to the east end.”

Thinking more long term, the city’s oldest transport service last year rolled out a series of upgrades in an aggressive bid to stay relevant and lure passengers. In April 2016, it linked up with transport app Citymapper to share free real-time operational information, becoming the first local transport operator to do so. “I think this can attract more young people. You are able to see when the next tram is coming at a specific stop and better plan your journey,” says Lu.

A month later, the company launched a technological schedule to reduce waiting time during peak hours. “What we did was collect data from passengers and analysed what the peak hours are, which portion of the tram line has the highest demand so that we can increase the tram frequency over that period and area in order to reduce crowding in the cabins,” says Lu. “After we introduced this new schedule, we've seen a rise in ridership.” The operator, she adds, has also been collaborating with Chinese University of Hong Kong to design an internal real-time optimization tool for tram dispatching.

In June last year, the company launched its pilot air-conditioned “cooler tram,” with more expected to be in service starting from 2018. However, not only is there a pressure to keep the trams up to date, but to also keep them the way they are, and preserve their nostalgic elements. “Some passengers prefer not to have a cooler tram, saying they like the summer breeze coming through the opened windows. They are afraid that having the cooler tram will take away the leisurely feeling of riding the tram, but we try to keep the original style of the tram as much as possible,” says Lu. “Even when we introduce new coolers trams, it would not cover the whole tram fleet, but 20 percent. It's about having a good balance between meeting the passenger expectations and the reality that we have to move towards a more modern style tram.”



Keeping on Track

Another reality for the trams is no government subsidies, cheap fixed fares, and the need for huge capital investment to keep it running profitably.

With the expensive relocation of its Causeway Bay substation, Lu says the company is busy reviewing the financials of the company and “closely monitoring the impact of the various operational challenges on the business.”

Despite being known for its eye-catching tram body adverts – “Some tram fans will take the tram based on the advertising,” says Lu – advertising isn't the tram's prime source of income. “Advertising revenues had dropped almost 15 percent last year with China's economic slowdown. It fluctuates very much because it is just a luxury expenses for most companies. This year will be challenging again,” she says.

Tram fare is the main and stable source of income for the company, while labour costs is the main cost driver. “We have around 650 people working for the company, more than half are the drivers. The others would be the contractors like cleaning, and maintenance and the materials required for our repairs and maintenance. Luckily our financial situation is still healthy, without any subsidies or loans from outside.”

This is about to change. Last month, the government said it will subsidize, on a matching basis, the replacement of about 2.4 km of tram tracks with new technology in order to reduce the traffic impact caused by tram track replacement works. It would be the company's first government subsidy, says Lu. The company has already been planning a major track overhaul that involves building in noise-reducing “rail jacket technology” to the tracks, and completed the pilot renewal works at the Sau Kei Wan tram terminus last year. At the time of writing, Tramways was in the middle of submitting its proposal to the government to replace the shock absorbing material of the rest of the tracks. “The other day, I went to Sau Kei Wan to look at the railway jackets. After seeing it, I understand it more and can have it in mind when I do the forecasts and budgeting. It's like going back to secondary school and taking chemistry.”


Meaningful work

Lu also plays a regional Asia-Pacific role for RATP Dev Transdev Asia, which operates metro lines in Mumbai and Seoul, buses in China, as well as trams in the Philippines. “I have to also manage the investments of these countries and try to find more opportunities for growth in this region, “ she says.

The ability to think laterally to identify complex problems and develop solutions is valuable to Lu, who tries to pass on such skills to prospective CPAs as a facilitator for the Institute's Qualification Programme workshops. “The programme's emphasis on training the thinking process of individuals is important. For example, as a head of department, I have to deal with different unexpected situations with no previous cases to refer to, so it's important for me to utilize my past professional experience to analyse the new situation in order to find the solution,” she explains. “Also presentation skills and team-working is very important in the workplace for me.”

Lu's career started in audit at PwC, where she worked for two years. She then moved on to work as an accountant for a manufacturing company until she returned to being a professional accountant in practice, this time at Ernst & Young. “Because of the experience I got in the commercial area, I understood more about audit, so when I returned to audit I enjoyed it more,” she says. “After a year and a half, I got offered a secondment in London, which was what I always wanted since the (then) Big Five recruitment talks at university always mentioned the opportunity to work overseas.”

It was in London where Lu met her now-husband. Together they have four-year-old twin daughters. She took a two-year career break after giving birth to focus on raising her girls, and later joined Hutchison Port Holdings (now Hutchison Ports) as a finance manager before accepting – without hesitation – a role at Hong Kong Tramways. “The tramways are iconic to Hong Kong and I felt that I wanted to help keep this heritage alive,” says Lu, a keen tram user since her early 20s. “Also, I think because of the 2009 acquisition, the combination of the old and new, I believed that we can do a lot more for Hong Kong Tramways now, including improving internal controls and the financial-related processes.”

After stints at various companies, both in practice and the commercial side, working for the trams is Lu's most fulfilling experience yet. “I treasure the personal relationships I have with the people here. Many of them have been working here for over 30 years so it's like working with family,” she says. “I'm happy to do something for the community.”