Standard tunnel tolls can restore traffic sanity

PUBLISHED : Wednesday, 04 August, 2010, 12:00am
UPDATED : Wednesday, 04 August, 2010, 12:00am

The new tolls for vehicles - including buses - using the Western Harbour Tunnel will inevitably trigger another round of public transport fare rises, prompting other operators to follow the lead of Kowloon Motor Bus and its sister company, Long Win Bus.

They have already applied for increases of 8.6 per cent and 7.4 per cent respectively. And fares on other routes will no doubt rise shortly, increasing the financial burden on commuters.

All three harbour crossings were constructed according to the build-operate-transfer (BOT) model when the government negotiated the deals with the consortiums. When the operating franchise agreement of the Cross-Harbour Tunnel expired in 1999, the government assumed control.

The Eastern Harbour Tunnel and Western Harbour Tunnel are mostly controlled by the publicly listed investment group Citic Pacific. The agreement states that the operating franchise for the Western Harbour Tunnel will run until August 2023.

According to the toll adjustment mechanism stipulated under the relevant legislation, the operator of the Western Harbour Tunnel is entitled to increase the statutory tolls without having to seek approval when its actual net revenue falls short of the estimated level specified in the law. That's why the operator can unilaterally raise toll charges despite mounting public opposition.

The government may be powerless to prevent the increases, but it should at least study the broader issue of transport policies and explore other options to relieve the traffic.

The BOT model was adopted during the colonial era to encourage private sector participation in transport infrastructure. Based on the principle of 'big market, small government', the intent was to engage private investors in developing transport facilities to alleviate traffic congestion and reduce public transport costs.

But the opening of the Western Harbour Tunnel has not only failed to bring about a redistribution of cross-harbour traffic, it has also prompted the other two tunnels to raise tolls.

At present, these two tunnels are operating beyond the maximum threshold of 78,500 vehicles per day. In comparison, the western crossing is seriously underperforming, handling a mere 52,298 per day, which is far below the anticipated daily capacity of 118,000.

It goes to show that the government should not give private operators a free rein to increase tolls whenever they want.

I have in the past appealed to the government to 'nationalise' both the western and eastern tunnel crossings, using public funds to buy back control. But the situation has changed and this now seems a bit impractical. First, it may not be politically correct because it may give the wrong impression of business-government collusion. Second, it is difficult to set the price as it requires HK$30 billion to HK$40 billion to buy back the operation rights. And the suggestion of a fourth cross-harbour tunnel is not a practical solution, either.

However, the government could exercise its executive power to force all three tunnels to implement a flat toll charge of either HK$25 or HK$30. It could then use the revenue from the government-owned Cross-Harbour Tunnel to subsidise the two private ones.

The cross-harbour traffic congestion is only the tip of the iceberg. To resolve our city-wide transport problems, the government must take a broader approach by revising its policy and overall pricing to minimise the financial burden on the public and maximise our overall competitiveness. High transport costs are no different from high rents; they are a form of indirect tax. It benefits no one except a handful of big businesses.

Albert Cheng King-hon is a political commentator.