Inflation fears on toll rise

PUBLISHED : Friday, 10 March, 1995, 12:00am
UPDATED : Friday, 10 March, 1995, 12:00am

LEGISLATORS fear drastic rates of increase in the Tate's Cairn Tunnel tolls will fuel inflation.

The tunnel company has submitted a proposal to the Government to increase tolls from $4 to $7 for cars, taxis and motorcycles, from $7 to $10 for light buses and light goods vehicles, and from $8 to $15 for medium and heavy goods vehicles and buses.

The Government suggested the toll for cars should be $6, but supported the proposed rates in the other categories.

But at yesterday's Legco transport panel meeting, Confederation of Trade Unions legislator Lee Cheuk-yan criticised the fact that the rate of increase for medium and heavy goods vehicles was almost 90 per cent.

He said the company's schedule originally proposed the toll for this group should go up to $12 between 1994 and 1996, not $15.

'Such a drastic increase will indirectly force up inflation,' he said.

Deputy Secretary for Transport John Telford said the company needed the toll revenue to repay its debts.

According to a government document, the tunnel company will need additional toll revenue to finance the first and second loan repayments of $14 million each in June and December this year.

And the cumulative net losses of the company at the end of the 1993/94 financial year stood at $481.5 million, or $36.8 million more than the level estimated in the company's original franchise proposal.

However, Democratic Party legislator Lee Wing-tat said the tunnel company would end up losing more money after the toll increase, because the rise would divert traffic to other routes such as the Lion Rock Tunnel and Tai Po Road.

He said that the proposed increase was too high.

Mr Telford said he would not expect a great diversion of traffic since the toll for cars would still be the same as that of the Lion Rock Tunnel and commercial traffic was usually route-specific.

The Transport Advisory Committee has supported the Government's recommendation on the toll increase, but the proposals still need the approval of Exco and Legco.