SecProbe.io

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<TYPE>LETTER
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<FILENAME>filename1.txt
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Mail Stop 3561

								October 24, 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
Supplemental response letter dated October 4, 2005 on the Form 20-
F
for Fiscal Year Ended December 31, 2004
 		Filed October 4, 2005
 		File No. 1-15004

Dear Mr. Lai:

	We have reviewed your supplemental response letter to us
dated
October 4, 2005 in response to our letter of comment dated August
29,
2005 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",
and be provided within 10 business days from 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.

Samuel M.H. Lai
Kowloon-Canton Railway Corporation
October 24, 2005
Page 2

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

Financial Statements

Note 2. Significant Accounting Policies, page F-7

(c) Basis of Consolidation, page F-7

1. We have reviewed your response to prior comment 2, including
your
planned future filing compliance.  In addition, please disclose
how
you account for your investment in WRPDL and its subsidiaries for
both Hong Kong GAAP and United States GAAP.  In this regard, we
assume that since they are not consolidated, that you account for
them under the equity method of accounting.  At a minimum, it
appears
that your equity investment must be reflected on your balance
sheet.
If so, please disclose.  If not, please advise supplementally.

(c) Basis of Consolidation, page F-7

2. As a related matter, we note that costs incurred are funded by
loans from the corporation to WRPDL.  We assume that the recovery
of
these costs is guaranteed by the government and that you are not
at
risk for these funds.  That is, we assume that you are protected
from
any expected losses.  If our understanding is not correct, please
explain supplementally and in detail.

(j) Jointly controlled operations, page F-12

3. We have reviewed your response to prior comment 4.  Based on
your
response, it appears the description under this significant
accounting policy footnote should be revised to indicate that you
have a cooperative `revenue sharing arrangement` with a business
partner where neither of you have an equity interest and where no
separate joint venture entity or partnership entity has been
formed.
Disclose that you each use your own property, plant and equipment
and
incur your own expenses and liabilities which are reflected in
each
entity`s respective consolidated financial statements, and that
the
revenue is proportionately allocated to you and the business
partner.
Further, briefly describe that the arrangement relates to a
revenue
sharing arrangement in the through-train operations where your
tracks
are connected to the tracks of the business partner.  Please
disclose
the significant terms of this agreement, such as the length of the
agreement and the basis of the proportionate allocation in
determining the revenue shared.

Samuel M.H. Lai
Kowloon-Canton Railway Corporation
October 24, 2005
Page 3

Note 40. Contingent Liabilities, page F-47

4. We understand the U.K. lease agreement was entered into in
fiscal
2003.  If true, it appears that the guarantee would be subject to
the
initial recognition and initial measurement provisions described
in
paragraphs 9 and 10 of FIN 45 for purposes of U.S.GAAP.  Please
tell
us how this apparent accounting difference has been reflected in
Note
44.  If the difference is not considered to be significant for the
periods presented, please provide detailed support for your
conclusion in your response.  Alternatively, please explain how
our
understanding is not correct.

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

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

5. We have reviewed your response to prior comment 10 and are
unable
to agree with your conclusions.  We note that the estimated useful
lives of your assets are assessed by engineers when they are
initially put into use.  However, it has been our experience that
such evaluations and assessments of similar assets are not
determinative as they can vary widely between individual engineers
and between companies.  We believe that the useful lives of your
fixed assets should be reasonably consistent with those adopted by
other nongovernmental entities in your industry without regard to
whether you consider your operations to be "long haul" in nature.
Accordingly, please revise Note 44 to disclose this difference in
accounting and to reflect a reconciling adjustment.

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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