Toll and trouble

PUBLISHED : Saturday, 12 January, 2008, 12:00am
UPDATED : Saturday, 12 January, 2008, 12:00am

It is close to midnight on a Friday, but the queues of vehicles at the entrances to the Cross Harbour Tunnel show no sign of dissipating. At the Hong Kong Island end, the line of vehicles extends 800 metres to the Sun Hung Kai Centre on Gloucester Road, Wan Chai.

The scene, common on most weekends and on some weekdays, is a reality that motorists have come to expect.

At the far end of the island, the Western Harbour Tunnel is eerily quiet. 'On many nights, I am the only driver during my entire journey inside that three-lane tube,' said night-shift taxi driver Eric Cheung. 'You could drive in a zig-zag path without bumping into another car.'

Mr Cheung would not have chosen Hong Kong's most expensive tunnel if the latest round of toll rises by the operator, Western Harbour Tunnel Company, had not kept the concessionary rate of HK$10 for empty taxis between midnight and 7am.

But the same concession is not available for daytime taxi drivers, private vehicles, minibuses and franchised buses, who have had to pay from 10 to 15 per cent more since the company ended most toll concessions on January 6.

When the island's third tunnel was put into service in 1997, it was hoped that, apart from completing the link between the airport and Central, it would divert some traffic from the Cross Harbour Tunnel.

In October, 10 years after its opening, average daily traffic in the western tunnel was less than a quarter of that in the Cross Harbour Tunnel. In the past five years an average of more than 120,000 journeys a day have been made using the Cross Harbour Tunnel, compared with 50,000 in the western tunnel and 65,000 in the Eastern Harbour Tunnel.

Academics and lawmakers blame the imbalance on uneven tolls. The Cross Harbour Tunnel charges between HK$8 and HK$30, the western tunnel from HK$22 to HK$115 and the eastern tunnel between HK$13 and HK$75.

Vehicles queuing to use the Cross Harbour Tunnel tail back to Gloucester Road and to Gascoigne Road and Princess Margaret Road in Kowloon during peak hours, causing delays and chaos. Many have argued that the only hope of resolving congestion problems caused by overuse of the government-owned Cross Harbour Tunnel lies in narrowing the gap between the tolls drivers pay for using that tunnel and the two privately owned ones.

But the government faces obstacles. It does not control tolls for using the western tunnel - whose owners have the right to adjust them using a preset formula.

When the government pitched the HK$7 billion project to Citic Pacific - the leading member of the consortium that won the bid in 1993 - it was agreed that Citic, which also controlled the eastern tunnel, could adjust tolls if earnings fell short of the minimum estimated net revenue stipulated in the Western Harbour Tunnel Ordinance.

The problem is, the returns the law allows for the tunnel's first 30 years of operation are so high that they have never been achieved. In the last financial year, net revenue was HK$658 million.

As a result, tolls for using the western tunnel have been raised six times since it opened. The statutory charge for private cars is now HK$90 - three times what it was in 1997 - though concessions mean the actual toll is HK$45. But the concessions can be removed at any time without government approval.

Tim Hau Doe-kwong, a specialist in transport economics at the University of Hong Kong, said the government should consider tackling the problem from an easier cut-in point - by increasing tolls for the Cross Harbour Tunnel. 'When the government imposed a HK$5 tax on all vehicles using the Cross Harbour Tunnel in 1984, half of its patrons shunned the tunnel for the Yau Ma Tei Ferry,' said Dr Hau. 'Who said charges do not determine traffic volume?'

The Cross Harbour Tunnel - which charges HK$20 for private cars and HK$10 for taxis - has not adjusted its tolls for many years and remains the cheapest vehicle crossing between Hong Kong and Kowloon.

Dr Hau, who conducted a study three years ago of tunnel use, said that although it might sound like political suicide, the government could justify a toll rise at the most popular tunnel because the extra income could be used for the greater good, such as levelling off the charges for the other tunnels.

'Cross Harbour Tunnel users could be offered discount coupons for the Western Harbour Tunnel and Eastern Harbour Tunnel, so hopefully some patrons of the overloaded tube - especially the money-sensitive - can be diverted elsewhere,' he said.

Dr Hau said the city could learn from Singapore and cities in the US, which impose high charges for taking heavily used roads, and vary the Cross Harbour Tunnel tolls according to the time of day to attain the greatest benefits.

'When it is approaching rush hour, tolls at the Cross Harbour Tunnel should step up in phases as the other two reduce theirs accordingly,' he said. 'At regular hours, tolls at the Cross Harbour Tunnel could revert to normal so only those with a real need would use that tunnel during busy hours.'

But a government source said raising tolls was not an option - at least for the time being. '[Dr Hau] is right that it amounts to political suicide,' the source said.

The transport bureau proposed 12 options in 2005 for evening out use of the three tunnels after the operator of the eastern tunnel won an arbitration hearing that allowed it to raise tolls by more than 60 per cent. Dr Hau's proposal was among those considered. However, the source said that at a time of inflation, when prices for practically everything, from rice flour to transport, were rising, a proposal like this would spark an outcry.

'The problem is, any adjustment to the tolls in the Cross Harbour Tunnel would not be a small one if we really want to narrow the gaps between the three tunnels,' the source said.

'How much do you say we should increase [tolls] by? If we raise tolls for private cars by HK$5, that is a 25 per cent increase. What do you think the public will say when a 9 per cent fare rise application from Kowloon Motor Bus is considered crazy?'

If higher tolls for the Cross Harbour Tunnel are out of the question, equally remote are the chances of a buyout of the franchises of the other tunnels, as some lawmakers have suggested. 'How do you set the price? Too low and it's not attractive for the buyer, too high and the government will be criticised for wasting taxpayers' money or favouring the commercial sector,' the source said.

In a document submitted to the Legislative Council in 2005, the building of a fourth tunnel or expanding the capacity of the Cross Harbour Tunnel were considered as long-term solutions.

Another government option was to extend the franchise for operators of the private tunnels in return for a reduction in tolls.

However, the government has made little headway with this proposal - no conclusion has been reached since talks began three years ago.

In an official reply to questions, the Transport and Housing Bureau said the government was exploring the combined option of franchise extension and toll rationalisation with the operators of the tunnels but the parties were locked in a dispute over the effect of toll cuts on traffic volume.

However, a number of academics and economists say the government does not appear overly concerned about the problem.

Hung Wing-tat, a veteran transport analyst at Hong Kong Polytechnic University, said he doubted the government really considered the Cross Harbour Tunnel traffic a dire problem.

'How many cars would actually shift to use the Western Harbour Tunnel even if it reduced tolls? Those who have been using that expensive tunnel simply will not change their habits because of a few dollars' variation,' he said.

The government source said private cars were the largest users of the western crossing.

Dr Hung said although the Citic group seemed to hold unfettered power to adjust tolls, it was not as if it could set whatever prices it desired.

'The market does not work under the simple logic that the higher you charge, the more you earn. There is a point when unreasonably high tolls will lead to a drop in patronage and profits, and that is when they must freeze the rate. [The operators] are businessmen who strive to maximise returns for their investment. It is unlikely they would raise the tolls to HK$90 even if they are entitled to.'

In its first two years the western tunnel ran at a loss. In the following eight years, its revenue grew nearly 20 per cent a year, though growth in traffic was far lower.

Charles Li Kui-wai, associate professor of economics and finance at Chinese University, said there was no need to alter tolls to even out usage of the tunnels.

'The choice of route is highly personal. Everyone knows there are jams at the Cross Harbour Tunnel and they still choose it. A driver going from Wan Chai to Tsim Sha Tsui simply will not switch to the Western Harbour Tunnel even if it's cheaper. Any impact that toll adjustments might have on traffic would only be short-term,' Professor Li said.

Within a few months of the government imposing a HK$5 charge for use of the Cross Harbour Tunnel, usage had returned to normal. The same thing happened when the eastern tunnel tolls went up by more than 60 per cent.

Even Kwok Chi-piu, leader of a taxi drivers' union, does not believe lowering tolls for the western tunnel would draw much traffic from the Cross Harbour Tunnel.

'The Cross Harbour Tunnel has a geographic advantage no other tunnels have,' he said. 'If the government has the reserves to buy back the tunnels, it might be better to spend the money to expand the capacity of the Cross Harbour Tunnel. That could be the most practical option.'