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ExCo approves Star Ferry's application for fare increase

     The Acting Chief Executive in Council today (April 17) approved the "Star" Ferry Company, Limited (Star Ferry)'s application for fare increase for its two franchised ferry routes, Central-Tsim Sha Tsui and Wan Chai-Tsim Sha Tsui (details in Annex 1).

     A government spokesman said that when considering the fare increase application from the Star Ferry, the Government had taken into account all relevant factors including the financial condition of the ferry operator; forecasts of changes in operating costs, revenues and returns; past performance of the ferry operator in the provision of the relevant ferry services; public acceptability of the proposed fares; and measures implemented by the ferry operator to save costs and generate additional revenue.

     "In the light of the current economic climate and to minimise the impact of the fare increase on the weekday passengers, the Government considered that all weekday fares and monthly tickets of both of the above-mentioned routes should remain unchanged but approved the increase of holiday (Saturday, Sunday and public holiday) fares by 30 to 40 cents with effect from June 24, 2012. With this new fare scale, it is estimated that 68 per cent of the total passengers of the Star Ferry's franchised services will not be affected. The weighted average rate of fare increase of the Star Ferry will be about 5.6 per cent, as compared with 9.8 per cent in terms of inflation since the Star Ferry's last fare increase in January 2010 (up to January 2012). This fare increase is estimated to have a full-year impact of less than 0.0005 percentage points on each of the Consumer Price Indices and should have a rather insignificant inflationary impact," the spokesman said.

     Apart from the adjustment of holiday fares, the Government also approved the Star Ferry to introduce a new bicycle fare of $13 for the lower deck of the Wan Chai-Tsim Sha Tsui ferry service. The four-consecutive-day unlimited-travel tourist ticket fare will be reduced from $34 to $25 upon de-linking it with the tram services.

     The Central-Tsim Sha Tsui ferry service has been in operation for over a century since 1898 and is well received by the local community and overseas visitors. Taking into consideration the unique historical significance of this ferry service, the Government will adopt an exceptional helping measure to reimburse the Star Ferry with the total revenue foregone arising from the offer of free rides for the elderly for the Central-Tsim Sha Tsui ferry service in 2012 (upon the implementation of the new fares) and throughout 2013. The estimated amount of reimbursement to the Star Ferry will be around $3.8 million per annum. The Administration plans to review this exceptional helping measure in mid-2013 to consider the need for its continuation.

     "Despite the implementation of phased fare increase in 2009 and 2010, the Government noted that the additional fare box revenue could not compensate for the increase of the Star Ferry's operating costs as a result of the rising wage and fuel prices. The Star Ferry had to apply for fare increase to ensure the financial viability of maintaining the ferry services. The Government will continue to assist the Star Ferry to explore new opportunities to generate additional non-fare box revenue," the spokesman said.

     The Government consulted the Panel on Transport of the Legislative Council on December 5, 2011, and the Transport Advisory Committee (TAC) on February 24, 2012, on the fare increase application. The TAC's advice is in Annex 2.

Ends/Tuesday, April 17, 2012
Issued at HKT 16:47


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