Fare shortfall puts brakes on tram upgrades

PUBLISHED : Monday, 11 July, 2011, 12:00am
UPDATED : Monday, 11 July, 2011, 12:00am


The operator of Hong Kong's 163 trams says less than a third of its fleet will be upgraded by 2014 - half of its original target - because it did not get the fare rise it asked for.

Explaining the impact of the government decision to award it a 30 HK cent increase, rather than the 50 HK cents it sought, Veolia Transport said it would have to do most of the work in its own workshops, slowing down the process.

'I had planned to outsource several parts to be more efficient,' managing director Bruno Charrade said. 'But now I am ready to do more things in-house.'

The company is under pressure to upgrade because of the looming competition from the MTR's West Island Line between Sheung Wan and Kennedy Town - due to open in 2014 - which overlaps with the tramway's most profitable section from Causeway Bay to Western district.

'We want significant changes by then, but [the slowdown means] changes may not be so visible now.'

The new tram - with the traditional wooden body replaced with aluminium - will also be fitted with a new braking and traction system, a new broadcasting and information system, and various interior design features that, the company says, should make the journey safer, more efficient and more comfortable.

But instead of producing 24 new trams a year, its Western district depot will be able to roll out only 10 to 12. Eight of them will hit the tracks by the end of this year. 'The production rate may improve after a while, but my guess is that there will only be 40 to 45 [new] trams by 2014,' Charrade said.

That should be just enough to meet peak-hour demand, and most of the new trams will be deployed on the western part of the line.

Despite the slower progress the company had no plan to seek a second fare rise soon, Charrade said. Instead it would spend another HK$5 million on a new control room to improve tram deployment. 'We are creating new bases, finding new materials and training our workers,' Charrade said. 'This will enhance the skills of our team and ensure the technology stays with the company.'

Despite a drop in patronage, the company did see a small rise in revenue in the month after its fare increase on June 7. But Charrade said the company needed a few more months to see the rise's real impact.

While Veolia is still negotiating with transport officials over big changes such as introducing new turning points along the line to break the 11/2 hour full journey into shorter loops, smaller changes such as traffic light alterations and unloading points are expected to come into place later this year and may cut each tram's journey time by a few minutes.


The number of years since the last adjustment in tram fares.

- The cost of an adult fare rose to HK$2.30 last month