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Following is a question by the Hon Lau Kong-wah and a written reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, at the Legislative Council meeting today (November 9) :
Question:
It has been reported that New World First Ferry Services Limited has recently applied to the Government to increase the fares of outlying island ferry services by an average of 9.4 per cent. In this connection, will the Government inform this Council:
(a) of the criteria it will adopt for vetting and approving the application, and whether it will consult this Council before making any decision;
(b) whether it will consider taking measures to relieve the pressure of increases in ferry fares, such as by offering further tax concessions, and allowing more advertising space to be provided at ferry piers, etc.; and
(c) whether it will consider opening up the ferry routes concerned to other operators, with a view to promoting competition and relieving the pressure for increases in the fares of ferry services?
Reply:
Madam President,
Fare adjustment of licensed ferry is subject to the approval of the Commissioner for Transport (C for T). Transport Department (TD) is now carefully considering the application for fare adjustment submitted by New World First Ferry Services Limited. In assessing the application, TD will take into consideration a number of factors which include:
(1) financial performance of the ferry operator;
(2) service performance of the ferry operator;
(3) change in operating expenses;
(4) public affordability and acceptability to the proposed rate of fare increase; and
(5) whether there are alternative means for the operator to improve its financial performance, e.g. adopting measures to cut cost or increase revenue.
The Administration appreciates public concern on ferry fare and will cautiously consider and balance all relevant factors before making a decision on the application. Since the majority of the passengers of the concerned ferry routes are residents of outlying islands, TD will take into account views of the passengers from the outlying islands. TD will also continue to gauge the opinions of Legislative Councillors as well as the general public through various channels.
In order to assist the local ferry trade to facilitate the operation of ferry services, reduce their operating cost and relieve the pressure for fare increase, the Government has adopted a number of measures to provide indirect assistance to ferry operators. On increasing non-fare box revenue, the Government now allows ferry operators to put up advertisement on the rooftop of the piers and within the pier premises. Ferry operators can recruit clients to advertise within the piers having regard to market conditions in order to make good use of the areas within the piers to boost their advertising revenue. Ferry operators are also allowed to lease out areas within the piers that can be used for commercial activities. All non-fare box revenue thus generated needs to be ploughed back into ferry operation.
In terms of reducing the operating cost of ferry operators, the Government has taken up the structural maintenance of the piers, such as the fender system and lift and ramp system, since 1997/98. Ferry operators are only responsible for routine maintenance of minor facilities at the piers. This arrangement has helped operators to reduce operating expenses on pier maintenance. When a ferry operator is relocated to a newly constructed pier, the Government will charge the ferry operator the same rental it pays for the original pier which is cheaper. On duty concession, the most practicable and feasible solution lies with concession on fuel duty. As a matter of fact, the diesel used by vessels of ferry services is duty-free and this arrangement will continue.
The Administration will maintain dialogue with the ferry operators and assist them to cut cost and generate revenue as far as possible.
Regarding the proposal of introducing other operators to run the same routes with a view to promoting competition and reducing fare, we have to consider all relevant factors carefully. These include whether patronage is sufficient to support more operators plying the same route, whether the existing pier facilities are adequate to cater for an additional operator, passengers' expectation on the quality of services and the forecasted economic conditions. Since the overall patronage of the outlying island ferry routes has been declining over the past five years while the operating cost has been on the increase due to external factors, the operation may be more difficult if additional operators were to be introduced to run the same routes. We therefore do not have plan to introduce other operators to operate the same routes for the time being.
Ends/Wednesday, November 9, 2005
Issued at HKT 12:51
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