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The Government today (September 12) announced that the Executive Council (Exco) had approved an application for toll increase by the Tate's Cairn Tunnel Company Limited (TCTC). New tolls will take effect from November 30.
"In making the decision, Exco has taken into consideration all the relevant factors, including the tunnel company's financial position, rate of increase, traffic implications arising from the increase, public acceptability, and whether the tunnel company is obtaining reasonable but not excessive remuneration," the spokesman said.
"We expect that the increase will divert around 700 to 900 vehicles to Lion Rock Tunnel per day, and 200 to 300 vehicles to Tai Po Road per day. With more alternative routes linking Sha Tin and Kowloon available to the public, including Route 8 linking Cheung Sha Wan and Sha Tin which was commissioned in March this year, the impact on traffic should be minimal. We will closely monitor the situation," he said.
The Tate's Cairn Tunnel Company Limited applied for an increase in tolls in December 2006 ranging from $2 (motorcycles), $3 (private cars and taxis), $5 (light goods vehicles) to $6 (medium and heavy goods vehicles). For buses, the increases were $6 and $7. After the Administration's repeated urge to take into account public acceptability, the company has adjusted downwards the magnitude of toll increases ranging from $1 (motorcycles) to $2 (private cars, taxis, medium and heavy goods vehicles) and $3 (light goods vehicles). For buses, the increases would be $4 and $5.
Existing and new tolls of Tate's Cairn Tunnel are attached (see Annex).
Exco also noted that TCTC could resort to arbitration if an agreement on the toll increase could not be reached with the Government. "Having considered the rate of increase and other relevant factors, Exco considered that reaching an agreement with the tunnel company achieved a balance among the different factors for consideration," the spokesman said.
If no toll increase is allowed, the tunnel company is expected to achieve an internal rate of return (IRR) of 5.81% over the 30-year franchise period. With the current toll increase, it will generate an IRR of 6.11%. In its franchise bid, TCTC assumed that an IRR of 13.02% would be achieved.
Ends/Friday, September 12, 2008
Issued at HKT 15:00
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