09:11     MTR CORPORATION<00066> - Announcement (1)                           

    The Stock Exchange of Hong Kong Limited (the "Stock Exchange") takes no   
    responsibility for the contents of this announcement, makes no            
    representation as to its accuracy or completeness and expressly           
    disclaims any liability whatsoever for any loss howsoever arising from    
    or in reliance upon the whole or any part of the contents of this         
    announcement.                                                             
                                                                              
    MTR CORPORATION LIMITED                                                   
    (the "Company")                                                           
    (Incorporated in Hong Kong with limited liability)                        
    (Stock code: 66)                                                          
                                                                              
    TREATMENT OF CONNECTED TRANSACTIONS                                       
                                                                              
    The Company has applied for, and the Stock Exchange has granted, a new    
    waiver to the Company from strict compliance with the requirements under  
    Chapter 14A of the Listing Rules in respect of certain connected          
    transactions, subject to certain conditions as described below.           
                                                                              
    As disclosed in the prospectus of the Company dated 25th September,       
    2000, in advance of the Company's partial privatisation, the Stock        
    Exchange granted a waiver (the "Old Waiver") to the Company from strict   
    compliance with the connected transaction requirements under the Rules    
    Governing the Listing of Securities on The Stock Exchange of Hong Kong    
    Limited (the "Listing Rules") in respect of transactions with the         
    Government of the Hong Kong Special Administrative Region (the "HKSAR     
    Government"), its associates, The Kowloon-Canton Railway Corporation      
    ("KCRC") and Octopus Cards Limited ("Octopus Cards"). KCRC is             
    wholly-owned by the HKSAR Government. Octopus Cards is a non-wholly       
    owned subsidiary of the Company, being owned as to 57.4% by the Company   
    and as to 22.1% by KCRC. The Old Waiver was granted in recognition of     
    the unique circumstances in relation to connected transactions with       
    those parties.                                                            
                                                                              
    For the purposes of both the Old Waiver and the New Waiver, transactions  
    between the Company and its subsidiaries (together, the "Group") on the   
    one hand and the HKSAR Government, its associates (including KCRC, the    
    Housing Authority and the Airport Authority) and any other persons who    
    are connected persons of the Company by virtue of the connection between  
    the Company and the HKSAR Government (including Octopus Cards)            
    (together, the "Government") on the other hand can be categorised as      
    follows:                                                                  
                                                                              
    (A)        transactions with the Government entered into as a matter of   
    law or regulation;                                                        
                                                                              
    (B)        operating agreements with the Government relating to the       
    operation of the railway and ancillary facilities (the "Operating         
    Agreements");                                                             
                                                                              
    (C)        project agreements with the Government relating to the         
    construction of a new railway or the extension of an existing railway     
    (the "Project Agreements");                                               
                                                                              
    (D)        agreements and transactions with the Government involving      
    land and interests in land, including running line leases, land grants    
    and leases (the "Land Transactions");                                     
                                                                              
    (E)        entrustment agreements with the Government under which one     
    party as entrustor has appointed the other party as entrustee to          
    construct specific types of infrastructure works (the "Entrustment        
    Agreements");                                                             
                                                                              
    (F)        agreements with the Government in relation to                  
    treasury-related arrangements (the "Treasury Services Agreements");       
                                                                              
    (G)        purchasing agreements with the Government (the "Purchasing     
    Agreements");                                                             
                                                                              
    (H)        miscellaneous agreements, transactions, arrangements and       
    settlements with the Government (the "Other Transactions");               
                                                                              
    (I)        transactions between the Company and Octopus Cards (the        
    "Octopus Transactions"); and                                              
                                                                              
    (J)        transactions between Octopus Cards and KCRC (the               
    "Octopus-KCRC Transactions").                                             
                                                                              
    As the Old Waiver was not granted for a fixed period, it does not apply   
    to connected transactions under contracts entered into or to be entered   
    into on or after 31st March, 2004, being the date on which the            
    requirements under Chapter 14A of the Listing Rules came into effect.     
    However, the Old Waiver continues to apply to connected transactions of   
    the types listed in paragraphs (A) to (J) above under contracts entered   
    into before 31st March, 2004, in accordance with the terms and