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LCQ17: West Rail Line of MTR
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     Following is a question by the Hon Leung Che-cheung and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (June 22):

Question:

     I have received complaints from quite a number of residents in New Territories (NT) West that the fares of the West Rail Line (WRL) are too high and unreasonable (e.g. the travelling time from Tuen Mun Station of WRL to Hung Hom Station and that from Sheung Shui Station of the East Rail Line (ERL) to Hung Hom Station are both about 38 minutes, but the single journey fare for the former is $22.5, which more than doubles the latter at $10.5). Moreover, the loading during morning peak hours on WRL has reached 104 per cent at present, often making it difficult for passengers to board the train. Such residents have also pointed out that the Government has implemented a number of policies in support of the MTR Corporation Limited (MTRCL), including designating railways as the backbone of Hong Kong's public transport system and granting to MTRCL the property development rights along its railway lines, MTRCL should therefore have both the responsibility and financial ability to improve its railway services. In this connection, will the Government inform this Council:

(1) whether it knows the respective median incomes of the residents in Tuen Mun, Yuen Long, Tin Shui Wai, Fanling, Sheung Shui and Tai Po at present (set out in a table);

(2) of the respective Octopus fares, in each of the past three years, for journeys (i) from WRL's Tuen Mun Station, Tin Shui Wai Station and Yuen Long Station to Hung Hom Station, and (ii) from ERL's Sheung Shui Station, Fanling Station and Tai Po Market Station to Hung Hom Station, and the respective percentages and amounts of the year-on-year increase in fares (set out in a table);

(3) whether it knows WRL's operating expenditure, fare revenue and MTRCL's revenue from the property developments along WRL in each of the past three years;

(4) of the Government's measures to help NT West residents address the problem of huge travelling expenses arising from high railway fares;

(5) as there are comments that MTRCL's Fare Adjustment Mechanism fails to take into account the continuous revenue from MTRCL's property development rights, and that MTRCL has increased its fares on many occasions despite its huge profits over the years, whether the Government will expeditiously review the mechanism and consider listing MTRCL's property revenue as one of the considerations for fare adjustments;

(6) given that several public and private housing developments will be commissioned in NT West over the coming decade, which will result in an incessant increase in the population of the district, whether the Government will conduct a review to ascertain if its policy of designating railways as the backbone of Hong Kong's public transport system, which has been implemented for many years, should be adjusted, and study ways to strengthen the non-railway public transport services in NT West so as to offer more choices to the residents there; if it will, of the details; if not, the reasons for that; and

(7) given that except Austin Station, the platforms of all other stations of WRL can accommodate nine-car trains, whether the Government will study with MTRCL the feasibility of deploying nine-car trains to serve WRL, with a view to easing the over-crowdedness of WRL's cars during peak hours?

Reply:

President,

     The East Rail Line, commissioned in as early as 1910, is a railway line combining domestic and cross-boundary services, running from Kowloon to Lo Wu via the New Territories. The Lok Ma Chau Spur Line was also commissioned in 2007. Along the line, fares of the cross-boundary section are significantly higher than those of the domestic section. As regards the West Rail Line (WRL) commissioned in 2003, it only provides domestic train service. The fare structures of the two railway lines are therefore different.

     My reply to the various parts of the Hon Leung Che-cheung's question is as follows:

(1) According to the results of the 2011 Population Census conducted by the Census and Statistics Department, the median monthly domestic household incomes for new towns including Tuen Mun, Yuen Long, Tin Shui Wai, Fanling/Sheung Shui and Tai Po are as follows:

Area                         Median monthly
                        domestic household income
                                ]HK$^
-------------------    ----------------------------
Tuen Mun                         18,000
Yuen Long                        20,000
Tin Shui Wai                     16,000
Fanling/Sheung Shui              19,000
Tai Po                           21,800

(2) to (4) The existing Mass Transit Railway (MTR) network comprises ten heavy rail lines with a total of 87 stations. Passengers may interchange among different railway lines within the railway network. The MTR Corporation Limited (MTRCL) does not maintain any fare revenue data computed on the basis of individual railway line. On operating expenditures, as most of the resources (such as repairs and maintenance works) will be shared among different railway lines so as to enhance cost efficiency, MTRCL's expenditure records are mainly classified by cost categories of the entire railway network, but not by railway lines. The total revenue and operating costs of the MTRCL's Hong Kong Transport Operations in the past three years are at Annex 1. Besides, the property development rights for the property sites along the WRL have not been given to the MTRCL. The post-rail-merger MTRCL has been appointed to act as the agent of the Kowloon-Canton Railway Corporation (KCRC) and certain KCRC subsidiary companies for developing the property sites along the WRL. In general, the agency fee is equivalent to 0.75 per cent of the gross return on sales from the West Rail property development projects. In other words, the proceeds from the concerned property development projects belong to the Government. The agency fee and other revenues received by the MTRCL as the agent for projects along the WRL in the past three years are also set out in Annex 1.

     The existing Fare Adjustment Mechanism (FAM) of the MTRCL has been put in place since the Rail Merger in 2007, to replace the fare autonomy the MTRCL hitherto enjoyed. The FAM adopts a direct-drive formula. Fares are adjusted in accordance with the figures released by the Government. It is an open, objective and transparent mechanism. The weighted average of fare adjustments of all individual journeys must be equal to the overall fare adjustment rate. Details of the fares mentioned in Part (2) of the Hon Leung's question are set out in Annex 2.

     The then KCRC introduced the "Monthly Pass" and "Day Pass" promotional schemes in 2004. The MTRCL continued to maintain the arrangement after the rail merger, and introduced the "Tuen Mun-Hung Hom Monthly Pass" when the Kowloon Southern Link was commissioned. During 2012 to 2013, the Government and the MTRCL conducted the first review of the FAM which may be conducted once every five years. The outcome of the review was announced in April 2013.  As part of the review outcome, to address the need and affordability of frequent medium- and long-distance MTR passengers the MTRCL has comprehensively enhanced the above-mentioned monthly passes and related concessions, including introducing the "Tuen Mun-Nam Cheong Monthly Pass Extra" and "Tuen Mun-Hung Hom Monthly Pass Extra". WRL passengers may also use the "Tuen Mun-Nam Cheong Day Pass".
  
     Passengers who hold the above-mentioned monthly passes or day passes can make unlimited journeys on the WRL via designated stations in specified months or on the day of purchase of the pass. Passengers who hold the monthly passes may also enjoy a 25 per cent discount when taking connecting local journeys outside the designated stations.  Besides, MTR passengers may enjoy interchange concessions of Light Rail if they use Octopus Card at designated stations. Light Rail or MTR bus passengers can also enjoy interchange concessions for MTR trains, so as to bring convenience to passengers travelling between Yuen Long, Tuen Mun and Tin Shui Wai.  

     Together with the on-going concessions for different groups of passengers, including other interchange concessions, monthly pass extras/day pass, fare concessions for children, students, persons with disabilities and the elderly and so on, the MTRCL brought fare savings of 2.4 billion dollars for passengers in 2015 through providing the various on-going concessions. Details of MTRCL's fare concessions in 2016 have been set out in the Legislative Council paper No. CB(4)1056/15-16(01) issued on May 30, 2016.

     The Government will continue to encourage the MTRCL to review the effectiveness of the fare promotions from time to time and introduce suitable fare concession schemes as far as possible having regard to the financial prudence required of the Corporation as a listed company.

     Besides, the Government has also been providing a certain degree of assistance to eligible citizens who are in need of help on the front of transport expenses through different schemes. For example, students receiving whole-day secondary or primary education or attending a full-time day course from post-secondary to degree level, who face financial difficulties, may apply for the "Student Travel Subsidy Scheme"; low-income earners may apply for the "Work Incentive Transport Subsidy Scheme".
  
(5) The Government and the MTRCL may review the FAM every five years. The last review was completed in 2013, which introduced the "Profit Sharing Mechanism" to address the public concerns on MTRCL's profitability. The MTRCL will, based on its underlying business profits each year, set aside an amount to provide fare concessions and share the Corporation's operational success with passengers, as well as relieve their burden from fare increase. The underlying business profits being referred to include profits from all the businesses of the MTRCL. Those from property developments and overseas businesses are also included. The next review is originally scheduled for completion in 2018. The Government announced on April 20, 2016 that it would advance the review with the MTRCL. The main direction of this review is for the operation of the FAM to better respond to public concern about both the correlation between the FAM and MTRCL's profitability, and passengers' affordability, whilst still respecting the financial prudence required of the Corporation as a listed company, on the premises of retaining a transparent fare adjustment mechanism building on the basis of public and objective data, and a direct-drive formula. Details are in the "Consultation Paper on the Review of the MTR Fare Adjustment Mechanism" which has been uploaded to the Government's websites.

(6) With a dense population and limited road space in Hong Kong, the Government's transport policy is based on public transport with railway as its backbone, to provide travel convenience to the community. Currently, the number of passenger trips made using public transport accounts for over 90 per cent of the total passenger trips every day, with a total of 12 million passenger trips every day.  Among them, over 5 million passenger trips are made in the MTR network every day. The Government is carrying out a Public Transport Strategy Study (PTSS) to examine the respective roles and positioning of public transport services other than heavy rail to enhance their development. The PTSS will also look into some important topical issues of the public transport sectors in detail, as well as examine how to enhance the complementarity amongst the various public transport services. This is to ensure that the public can enjoy efficient services with reasonable modal choices on one hand, and the public transport operators can enjoy sustainability within their respective niche area and functions on the other. The Government will commence strategic studies on railways and major roads beyond 2030 in the light of the "Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030", so that the planning of major transport infrastructure can cope with the needs arising from the overall long-term land development of Hong Kong.

     The Transport Department (TD) has been paying close attention to the development and the trend of traffic demand for New Territories West and co-ordinating the services of different public transport modes (including public transport services other than railway). For new housing developments, the TD will make plans for the public transport services and request public transport operators to introduce new routes and adjust existing services in a timely manner. After the intake of residents of the new housing projects, the TD will deploy staff to conduct on-site inspections and surveys from time to time to understand the changes in passenger demand and will strengthen service to meet demand where necessary. The TD will continue to maintain a close contact with public transport service operators and monitor the demand for public transport services in various districts and make timely adjustment to the services.

(7) All trains running along the WRL must dovetail with the platform design of every station on the line, including Austin Station, the platform of which can accommodate eight cars only. As such, the WRL cannot operate with nine-car trains. All train compartments of the existing MTR heavy rail lines are designed based on the industry standard adopted at the time of the construction of railway lines. The maximum carrying capacity of train compartments is calculated based on an accommodation up to six persons (standing) per square metre (ppsm) on average. However, it has been observed that over the years, passenger riding habits have changed. Nowadays, passengers are less willing to board a train that looks crowded even when there is still room available. They prefer waiting for the next train. This in effect reduces the carrying capacity of the train and the railway line as a whole. In actual operation, trains running during the busiest hours on the busiest corridors achieve a passenger density of only around four ppsm. Based on a four ppsm passenger density and current train frequency, the loading during morning peak hours for the critical link of the WRL is 104 per cent in 2015. However, when calculating on the basis of a design passenger density of a maximum six ppsm and current train frequency, the loading is 74 per cent.

     We understand the concern of residents in New Territories West about railway services. Thus, we take the opportunity of implementing the Shatin to Central Link (SCL) project to enhance the carrying capacity of the WRL. Upon the completion of the "East-West Corridor" (formed by the existing WRL, the Tai Wai to Hung Hom section of the SCL currently under construction, and the existing Ma On Shan Line) in 2019, the passengers from New Territories West will be able to travel to eastern Kowloon, Tai Wai, Hin Keng and Wu Kai Sha, from Tuen Mun Station without interchange. Under the SCL project, the MTRCL will modify the signalling system, procure 148 new train cars, and modify existing trains in preparation for the commissioning of the "East-West Corridor".

     Starting from 2016, the existing seven-car trains serving the WRL are being gradually replaced with eight-car trains to dovetail with the SCL project. The first four eight-car trains are already in service.  With more eight-car trains going into service, the loadings of busy sections will be significantly relieved, and reduced to levels under 100 per cent based on the passenger density of 4 ppsm. It is expected that the modification and testing of all the 28 trains will take about 30 months to complete. Upon the completion of modification works, the overall carrying capacity of the WRL can be increased by about 14 per cent when operating at the existing hourly frequency of about 20 trips in each direction. We currently estimate that the "East-West Corridor" can ultimately reach an hourly frequency of 28 trips in each direction with eight-car trains. On this basis, the carrying capacity of the WRL will increase by 60 per cent (inclusive of the 14 per cent increase mentioned above) over the current seven-car trains operating at an hourly frequency of about 20 trips in each direction.

     The MTRCL has increased the train frequency during peak hours where possible, and has been implementing various measures to enhance the carrying capacity of its railway network. The details have been set out in Legislative Council Paper No. CB(4)854/15-16(07) issued on April 12, 2016.

Ends/Wednesday, June 22, 2016
Issued at HKT 17:02

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