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The Executive Council today (February 19) considered the fare increase application from the Kowloon Motor Bus Company (1933) Limited (KMB) and approved an overall average fare increase rate of 4.9 per cent for KMB. The new fares will take effect on March 17.
The approved rate of fare increase is lower than the 8.5 per cent as put forth by KMB. It is also lower than the magnitude of changes in the Composite Consumer Price Index (CCPI) (+6.31 per cent) and the Median Monthly Household Income (+7.14 per cent) as well as the formula outcome of the supportable fare adjustment rate (+5.81 per cent) under the Fare Adjustment Arrangement (FAA) for franchised buses. The formula is 0.5 x Change in Wage Index for the Transportation Section + 0.5 x Change in CCPI - 0.5 x Productivity Gain.
In its deliberations, the Executive Council has fully considered the basket of factors under the FAA, which include:
(a) changes in operating costs and revenue since the bus company's last fare increase in May 2011;
(b) forecasts of future costs, revenues and returns;
(c) the need to provide the bus company with a reasonable rate of return;
(d) public acceptability and affordability;
(e) the quality and quantity of service provided; and
(f) the outcome of the formula for a supportable fare adjustment rate. The formula is for reference only. The fare level will not be adjusted automatically according to the formula outcome.
The Executive Council has also fully considered the views of the Panel on Transport of the Legislative Council and the Transport Advisory Committee.
A Government spokesman said, "We understand that the general public is very concerned about bus fares. We have therefore carefully taken into account public affordability and acceptability in our assessment of the fare increase application.
"KMB will likely run a deficit in 2012 after settling its accounts. Even with the fare increase of 4.9 per cent, the overall financial situation of KMB would not be completely improved immediately. It is expected that its operation would continue to be challenging in the coming two years. In addition to staff costs, the factors that affect the operating costs include the fluctuation in fuel prices and cost benefits of bus routes."
KMB submitted an application on November 29, 2012, for an average fare increase of 8.5 per cent in order to achieve break-even in 2013.
The Government spokesman stressed that the approved fare increase had struck a balance amongst different considerations. On the one hand, it minimises the impact of bus fare increase on passengers as far as possible. On the other hand, it enables the bus company to maintain financial stability to continue to render and develop a proper and efficient public bus service.
Under the new fares, about three-quarters of KMB passengers will either not be affected or will need to pay not more than 40 cents extra per trip. About one-quarter of passengers will need to pay 50 cents to 70 cents more per trip. Passengers who will need to pay $1.1 to $3.0 more per trip are only those taking racecourse services.
There will be no fare increase for cross-harbour routes jointly operated by KMB and another franchised bus operator to avoid confusing the public.
The Government spokesman said that KMB and the Transport Department were working earnestly to rationalise bus routes, with a view to redirecting resources from underutilised or duplicated bus routes to those with higher demand.
"Successful route rationalisation will increase the efficiency of the bus network, thereby benefiting passengers and relieving the pressure of fare increase," the Government spokesman said.
"To enhance the efficiency of the bus network, reduce roadside emission and alleviate the pressure of future fare increases, we hope members of the public and the community will support the bus route rationalisation in view of the long-term and overall public transport and environmental benefits that it can bring."
Ends/Tuesday, February 19, 2013
Issued at HKT 17:46
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