SecProbe.io

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Mail Stop 3561

								August 29, 2005

 BY U.S. Mail and Facsimile [ 852-2688-0394 ]

 Mr. Samuel M.H. Lai
   Chief Executive Officer (Acting)
 KOWLOON-CANTON RAILWAY CORPORATION
 KCRC House, 9 Lok King Street
 Fo Tan, Sha Tin
 New Territories, Hong Kong

 	Re:	Kowloon-Canton Railway Corporation
 		Form 20-F for Fiscal Year Ended December 31, 2004
 		Filed June 24, 2005
 		File No. 1-15004

Dear Mr. Lai:

	We have reviewed the above referenced filing based upon an
examination restricted solely to considerations of Selected
Financial
Data, Management`s Discussion and Analysis, and the Financial
Statements and have the following comments.  Where indicated, we
think you should revise your documents in response to these
comments
in future filings with us.  Please confirm that such comments will
be
complied with.  If you disagree, we will consider your explanation
as
to why our comments are inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation.  In some
of
our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure.  After
reviewing the information, we may or may not raise additional
comments.

	Pursuant to Rule 101(a)(3) of Regulation S-T, your response
should be submitted in electronic form, under the label "corresp,"
within 15 business days of the date of this letter.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

FORM 20-F (Fiscal Year Ended December 31, 2004)

Tabular Disclosure of Contractual Obligations, page 52

1. We believe that registrants should generally include scheduled
interest payments in the table.  Interest on fixed rate
obligations
should be included at a minimum.  If interest on any obligations
is
not included in the table because it cannot be reliably estimated,
please disclose this fact and state the amounts and significant
terms
of those obligations in an accompanying footnote to the table.

Financial Statements

Note 2. Significant Accounting Policies, page F-7

(c) Basis of Consolidation, page F-7

2. We note the various references to certain subs held on behalf
of
the government for the sole purpose of developing property along
the
West Rail route.  We also note that you exclude these entities
from
consolidation.  Please explain, supplementally and in detail, how
you
account for them.  Tell us how you record and classify related
cash
flows in your financial statements.  If these are the same
entities
described on page 60, please explain how the schedule on page F-35
reflects the fact that the government owns 49 B shares.  If these
are
not the same entities, please also provide a comparable discussion
of
the other entities.  As a related matter, please tell us and
disclose
in the U.S. GAAP reconciliation footnote, the reasons why these
subsidiaries have not been consolidated for U.S. GAAP purposes.
Reference is made to SFAS 94, paragraph 13.  We may have further
comments upon review of your response.

(g) Depreciation, page F-10

3. Please refer to the discussion of leasehold land in Item (ii).
Supplementally tell us whether you make an upfront payment for the
use of this land and subsequently depreciate that prepayment
balance
over the period of time you have the use of the land.
Alternatively,
please tell us whether this land is accounted for as an investment
property and you are therefore required to account for the lease
as
if it were a finance lease.  If true, please explain your
accounting
in expanded detail.  If neither of our assumptions apply, please
describe the nature of these business arrangements and explain the
basis for your accounting.  We may have further comments upon
review
of your response.

 (l) Jointly controlled operations, page F-12

4. Tell us how your policy under Hong Kong GAAP complies with U.S.
GAAP.  In this regard, explain to us in detail why equity or
consolidation method accounting would not be applied to these
jointly
controlled operations under U.S. GAAP.  Your response should also
define what is meant by "interests in jointly controlled
operations."
To the extent you are accounting for these under proportionate
consolidation, tell us how your disclosures comply with Item
17(c)(2)(vii) of the Form 20-F, and provide the applicable
disclosures in the U.S. GAAP reconciliation footnote.

Note 9. Segmental Reporting, page F-24

5. In the U.S. GAAP reconciliation footnote, provide disclosure
that
you have two reportable business segments, Transport Division and
Property Services.  Also, disclose the primary profitability
measure
used by the chief operating decision maker in assessing segment
performance and allocating resources as is required under
paragraph
30 of SFAS 131.  Further, expand the "Results of Operations under
U.S. GAAP" discussion on page 44 to discuss any significant
differences in your results of operations on a segmental basis,
including the primary segment profitability measure used by
management.  In this regard, we would generally expect the
measures
and balances disclosed in your footnote to be consistent with the
disclosures and balances disclosed in MD&A.  However segment
operating profits on page 40 differ.  Please revise or advise.

6. For each period presented, please supplementally reconcile the
aggregate capital expenditures disclosed as "other information"
with
the payments for capital expenditures disclosed in the cash flow
statement on page F-6.

Note 18. Investments, page F-37

7. A significant portion of your debt securities are described as
being unlisted.  Supplementally explain how you determine the fair
value of these securities, both on the date you acquire them and
on
an ongoing basis.  If any of these securities are carried at
amounts
above their cost, please tell us how the amount of any increase
was
determined.

Note 40. Contingent Liabilities, page F-47

8. Please supplementally provide a general description of the
terms
and conditions that may cause your various lease agreements to
terminate.  Please also describe the events and  circumstances
that
could potentially cause the termination of the specific lease
arrangement described in Item (b) of this footnote.  State the
date
upon which that basic lease term is scheduled to end.  Explain how
and why the lease termination would result in a financial exposure
to
the group.  For example, are you subject to a penalty?  We may
have
further comments upon review of your response.

Note 41. Assessment of Impairment of Fixed Assets, page F-47

9. We see that you have assessed the value in use of the Group`s
railway assets by treating the entire railway network, current and
committed as representing the smallest cash-generating unit.  It
appears that the application of this methodology may result in an
accounting difference that should be disclosed under Note 44.  In
this regard, if you were to assess impairment of asset groups at a
lower level and/or exclusive of cash flows associated with future
capital expenditures that would increase the service potential of
the
asset group, would you arrive at the conclusion that no impairment
existed at December 31, 2004?  Please revise or advise,
supplementally and in detail.

Note 44. Summary of differences between accounting principles
generally accepted in Hong Kong and the United States, pages F-48

(b) Depreciation on Certain Fixed Assets, page F-48

10. Note 2 (g) discloses the fact that you depreciate tunnels,
bridges and roads at a rate of 1% per year under H.K. GAAP.  We
note
that fixed assets, which appear to be similar in nature, held by
other companies in your industry are generally not depreciated
over a
period that is greater than 40 to 50 years for U.S. GAAP purposes.
This practice appears to constitute a difference in accounting
between H.K. GAAP and U.S. GAAP.  Accordingly, please expand your
disclosures to discuss this difference and to include its impact
in
the appropriate reconciling schedules you have presented.
Alternatively, please supplementally explain why you believe that
your current accounting policy is appropriate under U.S. GAAP.  We
may have further comments upon review of your response.

11. We note that you properly include a reconciling income
statement
adjustment to record depreciation charges on permanent way for new
railway systems and extensions.  However, please provide support
for
your apparent conclusion that, after these original costs have
been
fully depreciated under U.S. GAAP, the differing accounting
policies
would not create material variances between individual income
statements presented in accordance with H.K. GAAP and those
presented
in accordance with U.S. GAAP.  We may have further comments upon
review of your response.

(i) Lease Out and Lease Back Transactions, page F-50

12. To assist us in evaluating the reconciling adjustments you
have
recorded in connection with these transactions, please provide us
with an actual example of such a transaction.  Supplementally
describe each individual step of the arrangement, from inception
to
completion, and illustrate the accounting entries you would record
under H.K. GAAP.  Provide a similar illustration of your
accounting
entries under U.S. GAAP.  In your illustrations, please clearly
explain how the leases should be classified and why.  Please
identify
and explain any income statement differences as well, if
applicable.
We may have further comments upon review of your response.

(j) Recently Issued Accounting Standard, page F-51

13. We see that an "unrelated"entity created in December 2003
under
one of your lease out and lease back transactions may meet the
criteria to be a VIE.  Please supplementally describe the
ownership
structure of this entity.  Explain the business reasons for
engaging
in this activity. Support your conclusion that the entity does not
qualify for consolidation under previously existing accounting
standards.

Other

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

Closing

      You may contact Ms. Beverly A. Singleton, Staff Accountant,
at
(202) 551-3328, or Ms. Margery Reich, Senior Staff Accountant, at
(202) 551-3347 if you have questions regarding comments on the
financial statements and related matters.  Please contact me at
(202)
551-3211 with any other questions.

      Sincerely,

							David R. Humphrey
							Accounting Branch Chief
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Samuel M.H. Lai
Kowloon-Canton Railway Corporation
August 29, 2005
Page 5

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