Tunnel operator 'open to ideas' to avoid toll rise

PUBLISHED : Wednesday, 23 February, 2011, 12:00am
UPDATED : Wednesday, 23 February, 2011, 12:00am

The Eastern Harbour Tunnel operator has not ruled out accepting a toll reduction plan proposed by the government days before its management is due to appear before the Legislative Council to ask for a massive increase.

The management of New Hong Kong Tunnel, which runs the eastern tunnel, will present its case to legislators on Friday to demand a 40 per cent rise in the toll - a move they say is necessary to keep the operation profitable.

But a person close to the company said it would not commit to anything until the government showed its own preference. The company is studying a temporary toll reduction for commercial vehicles - as proposed in a government consultant's report on balancing traffic flows among the three cross-harbour tunnels.

The consultant has urged a system of strategic pricing to spread out traffic. The report recommends the eastern tunnel lower toll fees for cars from HK$25 to HK$20 in exchange for government subsidies.

The Cross-Harbour Tunnel should simultaneously raise tolls to HK$25 from HK$20. This, the government consultant argues, will divert more traffic away from the heavily congested Cross-Harbour Tunnel and give more business to the eastern crossing, making it possible for it to keep profits up without raising tolls.

According to the study released in November, the price adjustment could cut the long queues at the Cross-Harbour Tunnel by 52 per cent - by sending up to 4,300 cars a day to the eastern tunnel, which connects Quarry Bay and Cha Kwo Ling in Kowloon. Those added cars would bring the New Hong Kong Tunnel an extra HK$47 million a year.

The idea has so far failed to convince shareholders of New Hong Kong Tunnel, according to the person close to the company.

The company's application for a toll rise is the last before its 30-year franchise expires in 2016. It is intended to bring the company's internal rate of return to a pre-approved level to 17 per cent from 15 per cent.

If a toll rise is approved, car and taxi drivers will pay an extra HK$10 on top of the current toll at HK$25. That could bring the company an extra HK$164 million a year - more than four times the consultants' proposal, even taking into account a potential 13 per cent customer drop-off from the higher toll price.

Democratic Party lawmaker Wong Sing-chi said New Tunnel Hong Kong should drop the application and increase its revenues through other means.

'We believe the consultant's rebate proposal is worth trying out,' he said. 'Of course, they could always seek arbitration again if the Executive Council rejected the toll rise request, but that could take years and their franchise [ends in] 2016. Co-operation sounds like a better option.'

The consultant's study laid out several scenarios for changes in the toll structure. If the gap were narrowed between the two crossings' truck tolls, for example, the queue at the Cross-Harbour Tunnel could be further cut by 77 per cent.

More than 2,339 trucks, or 60 per cent of the city's trucks, use the Cross-Harbour Tunnel every day. That is largely because a light-goods vehicle below 5.5 tonnes is charged just HK$15 - less than a car.

Medium and heavy goods trucks are charged HK$20 and HK$30, respectively. By contrast, the Eastern Harbour Tunnel charges HK$38 to HK$75.

Balancing act

A government consultant proposes readjusting toll charges between two of the tunnels to distribute traffic more evenly

Average daily traffic at the three harbour crossings last year

Cross-Harbour Tunnel: 120,908 trips

Eastern Harbour Tunnel: 67,530 trips

Western Harbour Tunnel: 58,580 trips

1 Scenario 1 (All cars to pay same rate of increase)

4,300 trips, comprising 3,000 cars and taxis and 1,300 trucks, to be diverted from Cross-Harbour Tunnel; queues outside tunnel slashed by 52%

2 Scenario 2 (Increases for taxis, trucks and double-decker buses higher than that for cars)

3,800 trips to be diverted from Cross-Harbour Tunnel - 2,7700 more cars and taxis
but 6,700 fewer trucks; queues outside tunnel slashed by 77%