A merger of the Mass Transit Railway Corporation Limited (MTRCL) and the Kowloon-Canton Railway Corporation (KCRC) would have important financial implications for the Hong Kong Special Administrative Region Government (HKSARG). Since the KCRC is wholly government owned, the HKSARG’s share of a merged corporation would increase significantly, providing an opportunity for (and possibly a requirement for) it to sell additional shares. While such a prospect is appealing, there are wider economic and social ramifications of a possible merger as well. Although financial considerations play a major role in any merger, the fact that passenger rail transport is vital to the very functioning of Hong Kong makes the merger a crucial public policy concern.