Fixing fares
In 1996, the Democratic Party sought to require the Mass Transit Railway Corporation to obtain Legislative Council approval of any fare rises, instead of merely informing the Executive Council as the law stipulates. It was only after intense lobbying by the Government and the MTR that a bill sponsored by the party was vetoed.
The Government's plan to privatise the MTR has now given politicians what they consider to be a golden opportunity to assert their power over the issue again. Six sets of amendments have been tagged on to the privatisation bill. Most aim to make Legco the final arbiter of how much the MTR can charge passengers.
This being an election year, politicians have mounted their fight with added zeal. But it would be wrong for them to use this to force through a fundamental change in the MTR's mode of operation.
Despite occasional minor breakdowns, the MTR is one of Hong Kong's success stories. Wholly owned by the Government but run on prudent commercial principles, the railway has provided the travelling public with a fast and efficient service. Its fares are more expensive than those of buses and the tram, but they are affordable and still relatively cheap by world standards. And that has been achieved without any recurrent subsidy from the public purse, unlike many other railways elsewhere.
For the past 25 years, the MTR has been able to raise loans at competitive rates to finance its construction and growth because investors know politics do not determine fares. If this changed, investors would certainly ask for a higher premium, and this would only mean higher operating costs and higher fares.
If the bill does not go through, not only will the Government need to explore other means to finance a budget deficit, but it would also deal a serious blow to further moves to privatise other public corporations. Investors differ on whether MTR shares will be a good buy. But legislators who oppose the railway's privatisation run the risk of being ridiculed by those keen to make a plunge for shares in a well-run corporation.
