Another one bites the dust in the tortuous franchised bus market

The largely privately financed public transport system tends to deter new entrants

With the purchase of Citybus by the Cheng Yu-tung family earlier this week, there soon will effectively be just two groups operating franchised bus services in Hong Kong. Will the market ever see the return of a third private operator?

It is a question that government officials - acknowledging Hong Kong's parochial franchise system - cannot answer. But the deal has highlighted the complex relationship between private bus operators and the government. The city's largely privately financed public transport system makes it inherently very difficult for new operators to enter the market.

'Certainly, you can't simply just go in and ask for a route,' a transport official said.

Under the Public Bus Services Ordinance, a bus franchise allows the operator rights to run services on specified routes. Yet how to obtain a franchise is unclear.

In the case of Citybus, which was launched in 1979, it took more than a decade of running bus charters and a residential bus service in Sha Tin before it was finally admitted into the club of franchised operators in 1991.

There seem to be only two paths to new routes for operators, and neither choice is easily attainable. The first is through a 'periodic route development programme' done with the Transport Department.