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LCQ6: Fare concessions provided by MTRCL
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     Following is a question by the Hon Lau Kong-wah and a reply by the Secretary for Transport and Housing, Ms Eva Cheng, at the Legislative Council meeting today (October 22):

Question:

     Regarding the fare concessions currently provided by the MTR Corporation Limited (MTRCL), will the Government inform this Council whether it knows:

(a) the criteria adopted by MTRCL for setting up Fare Savers, the locations which presently meet such criteria but with no Fare Savers set up, and whether and when Fare Savers will be set up at those locations;

(b) given that MTRCL has started providing half-fare concessions for full-time students this month, but it has been reported that there were cases of the ticketing systems concerned charging excessive fares, the details of such cases, the estimated total of fares overcharged so far, and whether MTRCL will refund the overcharged amount to the affected students; and

(c) given that the monthly ticket scheme is available only at the East Rail and West Rail Lines at present, whether MTRCL will reconsider providing such scheme at other lines; if it will not, the difficulties involved and whether MTRCL has made reference to the practices of other places?

Reply:

President,

(a)  MTR Corporation Limited (MTRCL) introduced the Fare Saver discount of $1-2 in 2002. The objective is to encourage people who live or work farther away from MTR stations to walk there to use railway service.

     In determining whether to introduce a Fare Saver at a particular location, MTRCL will take into account the actual number of passengers and potential growth, availability of other transport modes for interchange with railway, distance between the proposed Fare Saver and the railway station (generally the yardstick is about 500 meters), market situation and competition with other transport modes in the district.  In the past 12 months, the number of Fare Savers has been increased from 21 to 26.

     A total of 26 Fare Savers that meet the above criteria are located in different districts. They include:

  District                       No. of Fare Savers

Hong Kong Island                          6
Tsim Sha Tsui, Yau Ma Tei,                5
  Mongkok & Sham Shui Po     
East Kowloon & Tseung Kwan O              4
Tsuen Wan & Kwai Tsing                    8
Islands                                   3

     MTRCL will continue to introduce new Fare Savers taking into account the above criteria and market conditions. Fare Saver is one of MTRCL's promotional measures.  MTRCL will review the Fare Saver Scheme as necessary every year.

(b) MTRCL has extended the student fare concessions to all domestic service lines since September 28, 2008.  Eligible students with Personalised Octopus cards can enjoy fare concessions of up to 50% off normal fares on all domestic service lines.   MTRCL aims to increase its patronage and broaden its customer base through this marketing strategy.

     As regards reported cases of suspected over-deduction of fare for interchange between MTR railway services and MTR Feeder Bus, MTRCL has already clarified the situation. I wish to take the opportunity to explain the case.

     I would like to use the example of passengers taking MTR from Shatin to Tai Po Market and transfer to MTR Feeder Bus as an illustration.  The adult fares for the MTR journey and the bus journey are $4.7 and $3.4 respectively.  With the introduction of student fare concessions, the rail fare is reduced to $2.4 while the bus fare is still $3.4.

     MTRCL offers concessions for interchanges with MTR Buses and MTR Feeder Buses under the principle that passengers should pay the higher of the two fares.  In other words, in our example, the student should pay the higher of the two fares, i.e. $3.4.  Should the student take the rail service first, he needs to pay the student concession fare of $2.4 but the student is not charged the actual fare difference for the interchange with the bus because of MTRCL's marketing strategy.  As a result, the student enjoys an extra discount of $1.  Should the student take the MTR Feeder Bus first, following the established principle of interchange concessions, he would need to pay the higher of the fares, i.e. $3.4.  MTRCL estimates that fare difference between inbound and outbound journeys could occur for about 5 MTR Feeder Bus routes.

     MTRCL has emphasised that since the implementation of the new arrangement, there has been no case of over deduction or wrong deduction of student fares.

     MTRCL's recent decision to extend student fare concessions to all railway lines will bring about a saving of $130 million annually for the public. The number of students being benefitted from the concessions has increased from 260,000 to 360,000.

(c) Railway is a very popular mode of public transport.  The Administration understands the concern of the Legislative Council and the public about railway fares including whether individual fare concessions can benefit more passengers.  Under the rail merger, 2.8 million passengers have been benefited daily from fare reduction with an annual saving of $600 million.

     In the past, railway corporations have taken into account the economic situation of Hong Kong, marketing strategy and customers needs and have introduced different kinds of promotions on fares. These include East Rail and West Rail Monthly Passes offered by the Kowloon-Canton Railway Corporation before the merger.  The two promotional offers were introduced when West Rail and Ma On Shan Line were opened in order to encourage more passengers to ride on the new lines.

     Whether to offer fare concessions and the details of such offers are commercial decisions by MTRCL. MTRCL will take into account factors such as its business operation, market situation and customer demand when considering the need to offer promotions to passengers.

Ends/Wednesday, October 22, 2008
Issued at HKT 15:08

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