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A Transport and Housing Bureau spokesman said today (April 15) that, in the light of the rectification in the nominal wage index for the transport services sector in December 2008 announced today by the Census and Statistics Department (C&SD), the Government had re-calculated the bus fare adjustment formula outcome. The revised latest quarterly formula outcome under the bus fare adjustment arrangement is -1.26%, which has not yet reached the -2% triggering point for the review of bus fares. The Government will continue to apply on a quarterly basis the fare adjustment formula in accordance with the existing bus fare adjustment arrangement, and will proactively initiate a comprehensive fare review if the formula outcome reaches -2%.
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 Nominal Wage Index for the Transport Services Sector + 0.5 x Change in Composite Consumer Price Index ¡V 0.5 x Productivity Gain). The formula outcome does not operate as an automatic determinant of the bus fare adjustment outcome.
The nominal wage index for the transport services sector in December 2008 released by C&SD on March 26, 2009, was 145.1. C&SD today announced that the rectified index was 150.5. Based on this rectified index and the Composite Consumer Price Index (CCPI) for February 2009, the latest quarterly outcome of the bus fare adjustment formula is -1.26%.
Similarly, as a result of the rectification of the wage index, the rate of the MTRCL's Fare Adjustment Mechanism (FAM) is +0.7%, instead of -1.05% as released on March 26. As the rate does not trigger the ¡Ó1.5% fare adjustment threshold under the FAM, MTRCL would not adjust its fares in 2009; however, the adjustment rate would be carried forward to the following year for implementation.
The revised outcome of the FAM in 2009 is as follows:
0.5 x (+2.1%) (year-on-year change between the Composite Consumer Price Index (CCPI) in December 2007 and CCPI in December 2008) + 0.5 x (-0.7%) (year-on-year change between the Wage Index for the transport services sector (WI) in December 2007 and WI in December 2008) ¡Ð productivity factor (0)
= (+1.05%) + (- 0.35%) ¡V (0)
= +0.7%
Ends/Wednesday, April 15, 2009
Issued at HKT 19:17
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