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The following is issued on behalf of the Transport Advisory Committee (TAC): -
The TAC was briefed today (June 19) by the MTRCL and KCRC on their 2001 fare increase proposals. MTRCL proposed to raise average fare by two per cent to 2.5 per cent whereas KCRC proposed to increase fares by 3.1 per cent.
Speaking after the briefing, the TAC Chairman, Dr Cheng Hon-kwan said "After examining the presentation material on the financial situation of the MTRCL and KCRC, the TAC will ask the two Corporations to provide more details about their financial position and future plans. The TAC will also keep in view the public reaction when the proposals are further discussed."
The TAC noted that MTRCL made a net profit of $4.05 billion in 2000 and KCRC made a net profit of $2.29 billion in the same year. On the other hand, the MTR ridership had been dropping as a result of the growing competition in the public transport market. As for KCRC, other than the East Rail cross-boundary services, all other transport services had been incurring losses.
The TAC also noted that both Corporations had been making heavy investments in improving services and further major investments would be required on developing new railway projects.
According to information from KCRC, it had spent more than $6.4 billion in the past five years on improvement works such as upgrading of train signalling system, refurbishment of trains and purchase of new Light Rail vehicles and buses. Over the next three years, KCRC would spend $3.8 billion on other service improvement projects including the purchase of new and better trains. KCRC had also raised $16.5 billion to finance the new railway projects including West Rail and the East Rail Extensions.
MTRCL indicated that it invested $12 billion in upgrading the MTR system since 1997, including modernization of trains and replacement of signalling system. MTRCL planned to invest a further $12 billion on station improvement works including the replacement of environmental control system and provision of lifts for the disabled. This would be in addition to the massive capital outlay on new railway projects including the Tseung Kwan O Extension and Penny's Bay Rail Link. MTRCL currently had a total debt of $28 billion, with an annual interest cost of $2 billion.
Having regard to the foregoing, the TAC noted that it was important for MTRCL and KCRC to manage their finance in a prudent manner.
"The economy is recovering but the benefits of the economic recovery have yet to be fully felt by the general public. There is a need for the two Corporations to consider fare increases carefully, taking into account public reaction and the current economic climate," said Dr Cheng.
The TAC noted that both Corporations had frozen their fares since September 1997. Under the current proposal, most Octopus passengers of the East Rail domestic service would pay 10 cents to 20 cents more per journey and almost all Light Rail passengers would pay no more than 20 cents extra per journey. As for the MTR, most Octopus passengers would pay 10 cents to 20 cents more.
The TAC would ask the two Corporations to provide additional information for further consideration. The TAC also suggested that the two Corporations should take full account of the public reaction and comments and the economic situation before a decision was taken on the proposals.
At the same meeting, the TAC was also briefed on the findings of the feasibility study on introducing trolleybus system in Hong Kong and the performance of the franchised bus companies in 2000.
"We noted that trolleybus operation in urban areas would involve important technical and operational difficulties, but its operation in new development areas would be feasible as some of the technical and operational problems could be better addressed through careful design at an early stage of the development," said Dr Cheng.
TAC members were aware that a trolleybus system would cost much more than a diesel bus system. Financial viability and higher fare would be key concerns.
"TAC supported the objective of providing transport service in an environmentally acceptable manner. We noted that the environmental performance of the diesel bus fleet has improved considerably in the past few years, and with the upcoming cleaner diesel buses and improvement in bus technology, there would be marked improvement to the air quality in Hong Kong."
"In the light of the study findings, we agreed that there was not a strong case for introducing trolleybuses in existing built-up areas in Hong Kong. We welcome the Administration's plan to further explore the merits of introducing trolleybuses vis-ˆj-vis other environmentally friendly transport modes in new development areas," added Dr Cheng.
Separately, Members noted that the performance of the franchised bus companies was generally satisfactory in 2000.
"We are pleased to learn that there have been improvements in a number of areas of bus services, including the provision of more air-conditioned buses and bus shelters, lower bus accident rates, more efficient deployment of bus resources and the operation of a more environmentally friendly bus fleet."
In addition, Members noted that there had been a marked reduction of 23 per cent in the number of complaints per million bus passengers made against franchised bus companies to the Transport Complaints Unit in the past year.
The TAC expected the bus companies to continue to work with Transport Department to step up their efforts to improve bus operational efficiency and to meet passengers' demand.
End/Tuesday, June 19, 2001
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