'Disappointing' rise in tram fare puts upgrade on hold

A more modern and comfortable tram system for Hong Kong could be stalled indefinitely after Hong Kong Tramways said a 30 HK cents fare rise was far from enough to fund its multimillion renovation scheme.

The Executive Council slashed a requested fare rise of 50 cents, while approving a full HK$2 increase for taxi journeys.

An urban taxi ride will cost a minimum of HK$20 - up from HK$18 - from July 10. The flagfall was also raised by HK$2 in the New Territories and Lantau. A tram ride for adults will cost HK$2.30 instead of HK$2 from June 7. A rise of 10 cents on the concessionary fare of HK$1 for the elderly has been held over for a year.

Veolia Transport, the French operator which proposed a series of improvements after buying the tram company from Wharf two years ago, said it was disappointed.

'We will have to consider carefully our financial situation in the coming months, particularly on whether the long-term trend of declining ridership of trams can be reversed,' a spokesman said. 'The service improvement plan will have to be slower than originally planned.'

Veolia had hoped the HK$200 million renovation - including improvements to rail and traction systems, more comfortable cabins and onboard broadcasts - could reverse a decline in passenger numbers.

They have slipped by 1.5 per cent every year over the past decade.

The company has already started installing new tracks and a new braking system, while route maps were being fitted to all 118 tram stops.

But now, with limited funding, it may have to focus on plans related to service reliability and safety, a person familiar with the situation said, meaning a redesign of the trams' interiors will have to wait.

This would have involved the introduction of rows of individual seats facing the front, instead of benches facing each other.

Officials said they cut the requested fare rise of 50 cents because it amounted to a big margin of increase and passengers favoured trams simply because they were cheap.

The government allowed a 50 cent increase on the Star Ferry last year because its operator was in deficit, while trams still saw a small profit. The officials said taxis were allowed a full increase of HK$2 because of a drastic surge in fuel prices since the previous fare rise in late 2008 and because taxis were a luxury means of transport.

However, unionist taxi driver Kwok Chi-piu said the rise would add only between HK$40 and HK$60 to a 10-hour shift - still short of a combined increase in both fuel and taxi rents over the past 18 months.

Trams and taxis join the MTR, KMB buses, ferries and minibuses in raising fares.