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Re-tender results of four outlying island ferry routes

    The Transport Department (TD) today (May 30) announced the results of the re-tendering of the licences of the four outlying island ferry routes plying between Central and Mui Wo, Peng Chau, Yung Shue Wan and Sok Kwu Wan.

    To make the tendering process more competitive, the department tendered out the four ferry routes as four separate packages in the re-tender exercise.  A department spokesman said it received one bid for each of the licences of "Central-Mui Wo" and "Central-Sok Kwu Wan" routes and two bids for each of the licences of "Central-Peng Chau" and "Central-Yung Shue Wan" routes.

    After a thorough assessment of these bids, the department decided to award the licence of "Central-Mui Wo" route to New World First Ferry Services Limited, "Central-Peng Chau" route to Hong Kong & Kowloon Ferry Limited, "Central-Yung Shue Wan" route to Islands Ferry Company Limited and "Central-Sok Kwu Wan" route to Winnertex Limited.  The new licences of the four routes will take effect on July 1.

    In the first tender exercise, tenderers proposed to increase the average fares for "Central-Mui Wo" and "Central-Peng Chau" routes by about 30%, and those for "Central-Yung Shue Wan" and "Central-Sok Kwu Wan" routes by about 35% and more than 50% respectively.  The average fare increase rates of the licences awarded this time range from 5.5% to 23%.  The fare increase rates of monthly tickets range from 5% to 16.9%, as set out below -

Route            Average Fare      Monthly Ticket
-----            ------------      --------------

"Central-Mui Wo"  increase by 14.8%  5% increase
                  (14.7% to 21.9%
                  increase in adult

"Central          increase by 11.4%  11.9% increase
-Peng Chau"      (10.4% to 13.3%
                  increase in adult

"Central          increase by 5.5%    9.2% increase
-Yung Shue Wan"*  (ranging from 13.7%
                  decrease to 28.2%
                  increase in adult
                  fare when compared
                  with the fares for 
                  the current fast and
                  ordinary vessels

*will adopt a single vessel type
(with journey speed lying
between the existing
ordinary and fast ferries
but close to the existing
fast ferry)

"Central          increase by 23%    16.9% increase
-Sok Kwu Wan"    (19.6% to 27.6%
                  increase in adult

    The details of the new fares of the four ferry routes are set out at the Annex.  The service quality and frequency of the routes remain similar to the current level.

    A spokesman for the Transport Department said, "The Government understands that the operation of the outlying island ferry services has been very difficult, especially as the fuel price has continued to rise in recent months.  The fuel price has increased by more than 40% in just a few months between the first tender and the re-tender exercise.  On the other hand, since the population of these outlying islands is not expected to increase substantially in the future, there is only limited room for growth in the patronage and the fare box revenue of these routes.  It is inevitable to have some increases in the fares."

    To help reduce the operating costs of these outlying island ferry routes, the Government has been implementing various measures including taking over pier maintenance responsibility, waiving fuel duty, reimbursing pier rentals and exempting vessel licence fees for ferry services under the Elderly Concessionary Fares Scheme. The Government also allows ferry operators to sublet premises at piers for commercial and retail activities to generate non-fare box revenue for cross-subsidising the ferry operation to alleviate pressure for fare increase.

    In mid-2007, the Government introduced additional measures to further help ferry operators enhance their ability to generate non-fare box revenue.  These measures include obtaining the Town Planning Board's approval to relax land uses at Central Piers No 4, 5 and 6 so that the operators can sublet the upper decks for commercial activities such as restaurants, fast food shops, retail shops and service trades; streamlining the procedures for approval of applications for subletting premises at the piers; and retrofitting these piers with fire prevention facilities.

    To help alleviate the pressure on the ferry operation during the effective period of the new licences to maintain fare stability as far as possible, the Government has decided to waive the vessel-related fees of these four routes; to reduce or waive the pier cleaning, water and electricity expenses; and to provide more assistance to the operators on a reimbursement basis on top of the waiving of pier rentals and vessel licence fees under the current Elderly Concessionary Fares Scheme, during the new licence period of three years from July 1, so as to minimise the magnitude of fare increases as much as possible.  The implementation of these additional relief measures for these four routes is expected to involve about $6 million a year.

    The spokesman said, "With these relief measures, the fare increase rates of the licences awarded by the Government this time have been substantially reduced as compared with those in the first tender."

    Analysis shows that there are about 40% of Mui Wo, Peng Chau and Lamma Island residents coming to the urban area for work or school everyday and having to interchange to MTR after taking ferry to Central. To encourage passengers to interchange to MTR, the MTR Corporation has agreed to offer a fare concession of $1.50 per trip, lasting for six months, to passengers using these four ferry routes and interchanging to MTR.  The MTR Corporation will announce the relevant details and the effective date separately.

    To maintain the continuing development of the tourism and economic activities on these outlying islands despite the rising fares for ferry services, the Government will launch a one-off $2 million scheme of providing free ferry tickets to encourage schools, non-government organisations and community and district groups to organise activities to Peng Chau, Mui Wo and Lamma Island.  Organisations may submit applications to the Government.  After vetting, the Government will reimburse the ticket fees to the organisations.  This scheme should have a positive impact on the tourism development on outlying islands, on the one hand, and help increase the patronage of these outlying island ferry routes on the other hand.  The department will form an inter-departmental working group to map out the detailed arrangements.  The scheme is expected to start to receive applications in the summer vacation this year.  Relevant bureaus and departments including the Education Bureau, the Home Affairs Department, the Labour Department and the Social Welfare Department will jointly promote this scheme and encourage organisations to organise activities to these three outlying islands.

    The spokesman said that the Government would conduct a review on the outlying island ferry services as soon as possible, with a view to enhancing the long-term financial viability of these services and maintaining fare stability.  The Government is studying the addition of a floor at Central Piers No 4 to 6, beautifying these piers which are located at prime sites along the harbourfront.  Ferry operators would be allowed to use that floor for commercial or retail activities to generate more non-fare box revenue, to cross-subsidise the ferry operation and enhance the long-term financial viability of the outlying island ferry services.  Should this plan be implemented, the Government will bear the construction cost of the relevant works.

    "Under the principle of not providing direct government subsidy for daily operation, we will study how to maintain the sustainable development of the outlying island ferry services while keeping fares at levels affordable to the public. We will listen to views from all sectors and the public, and conduct a detailed study."

Ends/Friday, May 30, 2008
Issued at HKT 16:35


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