KMB may be granted fare increase of around 3pc

PUBLISHED : Tuesday, 11 January, 2011, 12:00am
UPDATED : Tuesday, 11 January, 2011, 12:00am

A hefty fare rise sought by Kowloon Motor Bus in late 2009 may be slashed by up to 70 per cent under recommendations submitted by the Transport Advisory Committee.

People close to the government's consultative body on transport policies said committee members were divided and made two suggestions after discussing the issue last week.

One group proposed an increase of over 3 per cent instead of the 8.6 per cent sought by KMB, while other committee members said it should be less than 3 per cent.

The committee, however, suggested a bigger increase for Long Win - KMB's sister company, which applied for an average fare rise of 7.6 per cent for its routes in North Lantau - as the small company faced tougher financial difficulties.

The recommendations will be considered by the Executive Council, which may reach a decision before the end of the month.

KMB was heavily criticised by sections of the community for demanding such a hefty increase - especially as it was made just a year and a half after its last fare increase in mid-2008.

The bus company asked for a rise of 9 per cent at that time, and was subsequently awarded an increase of 4.5 per cent.

Justifying the latest increase, KMB said that while the cost of ultra-low sulphur diesel used by franchised buses had fallen since 2007, it had noticed a rising trend after 2009. It said its fuel costs last year were 27 per cent higher than in 2009 and were projected to rise further.

The company said a 3 per cent increase would add 18 HK cents to the cost of an average trip instead of the 52 HK cents it proposed, cutting KMB's expected extra revenue by almost HK$900,000 a month.

The bus company's earnings fell 58.3 per cent for the first six months of last year after excluding a one-off non-cash income of HK$37.1 million.

The Transport Advisory Committee will consider more fare rise applications in the coming year, including from Hong Kong Tramways, the Eastern Harbour Tunnel operator, and more than 100 green minibus routes.

Meanwhile, Secretary for Transport and Housing Eva Cheng said the government would table the drug-driving bill for legislators' scrutiny in the second quarter of this year.

In the meantime, police organised 6,797 roadside operations last year in a stepped-up effort to tackle drug-driving and drink-driving behaviour - double the number of a year ago.

Among the 84 arrested drivers prosecuted for the two offences, more than half were convicted.

On the up

KMB says a 3 per cent fare rise will add this many HK cents to the average cost of a bus trip: 18