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A spokesman for the Transport and Housing Bureau said today (March 26) that the Government would trigger a review of bus fares in accordance with the existing bus fare adjustment arrangement.
When the franchises were extended for a number of bus companies in 2006, the Government introduced an arrangement to enable upward or downward bus fare adjustment. Under the arrangement, bus fares can be adjusted upwards and downwards in the light of prevailing economic conditions and changes in operating costs. The fare adjustment formula would be applied on a quarterly basis. The Administration will proactively initiate a comprehensive fare review if the formula outcome is beyond -2%. Based on the nominal wage index for the transport services sector for the fourth quarter of 2008 released today by the Census and Statistics Department and the recently published Composite Consumer Price Index for February 2009, the latest quarterly outcome of the bus fare adjustment formula was -3.03%.
The formula does not operate as an automatic determinant of fare adjustment outcome. Under the existing arrangement for the adjustment of franchised bus fares, the Administration takes into account a basket of factors in determining the fare level, including:
(i) changes in operating costs and revenue since the last fare adjustment;
(ii) forecast of future costs, revenue and return;
(iii) need to provide the operator with a reasonable rate of return;
(iv) public acceptability and affordability;
(v) quality and quantity of service provided; and
(vi) outcome of the fare adjustment formula (0.5 x Change in Wage Index + 0.5 x Change in Composite Consumer Price Index – 0.5 x Productivity Gain)
"We'll ask the bus companies to provide relevant data and forecasts for our analysis and assessment. If a fare adjustment is considered justifiable after taking into account all relevant factors under the bus fare adjustment arrangement, we will make a recommendation for a downward fare adjustment to the Chief Executive-in-Council," the spokesman said.
Ends/Thursday, March 26, 2009
Issued at HKT 17:30
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