Explore all the options for future of ferries
Hong Kong is envied for affordable public transport that sets benchmarks of efficiency and safety. What also sets it apart is that it is not a burden on the taxpayer. The government insists on free-market principles. Most services remain profitable, though rising fuel costs have put pressure on fares. Loss-making ferries to outlying islands are a notable exception. The long-term future for these irreplaceable links to the communities they serve is now uncertain. As a result, a fundamental shift in government policy cannot be ruled out.
As we report today, a government source has revealed a plan to consult the public about throwing them a financial lifeline. The government would buy the ferries and negotiate with the operators to continue running the services under management contracts. This is not the only solution that has been put forward. But the fact that it is being considered underlines the challenges of maintaining services to remote islands in the face of changing demographics and economics. Evidence of that is even to be found in the upmarket community of Discovery Bay, where residents are fighting proposals to raise ferry fares by 64 per cent to maintain current services.
Rising fuel prices brought the problems of the operators to a head before negotiations on new three-year contracts this year. The Transport Department rejected a demand for a fare increase of up to 50 per cent on services to Lamma Island, Mui Wo and Peng Chau to stem losses. Lower increases came at the cost of reduced frequency of service to save fuel.
This bought time for the government to consider relevant land policies and future strategies for the entire ferry business. The basic problem is that better-off islanders are willing to accept higher fares to maintain service standards - often for a lifestyle of choice, but those with lower incomes understandably oppose them. The socio-economic divide is compounded by the fact that the outlying island population is not getting much bigger or younger.
The government has stood firm on the free-market principle in the face of calls to take over the ferry services. With fuel prices likely to remain volatile, however, the senior source acknowledged a risk that privately owned ferry services may one day become non-viable.
The administration should not make an exception to the principle lightly. It is a foundation stone of an efficient, competitive and affordable transport system. Once breached, it will be more difficult to justify to other transport operators who would like subsidies to ease fuel-cost pressures on profitability.
There are, after all, other sensible options on the table that ought to be fully explored. One is to extend the operators' franchises from three to 10 years when the current contracts expire in 2011, so that they are guaranteed more security in planning investment and operations. Another is to allow them to sublet space in government-owned piers for rental income to subsidise unprofitable services.
The outlying islands provide lifestyles and natural environments that enrich the city's diversity, and popular weekend escapes from the pressures of city life. A consultation on effectively subsidising their transport links is unlikely to produce consensus. But it would test the public appetite for the idea and serve as a sounding board for viable alternatives.