Let's not make hazy bus fare adjustment formula even hazier
'[Transport Advisory] Committee chairwoman Teresa Cheng Yeuk-wah said after the meeting that each [fare increase] application had been assessed individually according to the bus fare adjustment formula, which takes into account the magnitude of change in household income, public acceptability and affordability and the companies' financial performance.'
SCMP, May 14
Icannot tell you that this is exactly how Ms Cheng phrased it. I can, however, tell you that she is a senior counsel, chartered engineer, chartered arbitrator and quite a number of other things that have nothing to do with public transport. She is, in short, a classic government committeewoman.
I mention this because there has been a recent tendency in government to distort the arrangements by which bus fares are determined. These arrangements are already rather woolly ones and making them even woollier allows bureaucrats to take pride in their warm feelings of social consciousness, which they like to do.
Until eight years ago bus fares were set on the basis that bus operators should be allowed a stipulated percentage return on average net fixed assets. This formula was considered too rigorous (read 'binding') and thus we instead got something called the Modified Basket of Factors Approach (read 'vague'). The basket consisted of:
Changes in operating costs and revenue since the last fare adjustment.