Wharf is now looking for suitable food and beverages to offer on the vessel, which will initially be tied up at a pier in the harbour. Later it may find a different location along the new waterfront that is currently under construction.

Yick said it was too early to estimate how much profit Wharf might make from the operation. But he hoped it would be enough to help revive the ferry's fortunes, plagued by a nearly 25 per cent drop in daily patronage - from 50,000 to 38,000 - since the Central ferry pier was relocated in 2006.

The dwindling patronage dealt a serious blow to the ferry operation, pushing a profitable operation into the red: it recorded accumulated losses of HK$17 million in the three years up to 2009. Fares went up in 2009 and again last year.

The introduction of the minimum wage has made the losses bigger, Wharf says.

The firm earlier proposed two options for fare increases for its Wan Chai-Tsim Sha Tsui and Central-Tsim Sha Tsui routes.

One is to raise the weekday upper-deck fare by up to 30 cents to HK$2.80, and weekend and holiday fares by up to 60 cents to HK$3.60.

The second option is to raise fares by 30 cents on weekends, on condition that the government compensates it for the HK$5 million it loses each year by providing free rides for eligible elderly people.

The ferry firm is asking for what it calls 'compensation' after Chief Executive Donald Tsang Yam-kuen decided to reimburse outlying-island-ferry operators for fare concessions.

The Star Ferry is excluded from the new arrangement because officials say it does not provide the same, essential commuting services as operators on island routes.

Yick defended a proposed HK$20 charge for bringing bicycles on board ferries, saying the cost of running the service was HK$370,000 a year.

The cycle service can break even only if at least 51 cyclists use it every day, but only about 40 people are using it regularly.

The two fare options are still being studied by the government, but the ferry company has warned it could still register a HK$3 million loss next year even if fares go up.

While the 123-year-old business' financial future looks grim, Yick sees some grounds for optimism in the relocation of the maritime museum to a public pier in Central in 2013, and the completion of the harbourfront promenade and development - due by 2015 at the earliest.

'The worst may be over, and there might be some slight rebounds in future,' Yick said.

Wharf would continue to negotiate with the government on relaxing lease restrictions at the Central pier and for its rooftop development at the Tsim Sha Tsui pier, as well as expanding its boat tours in the harbour, he said.

On the environmental front, the ferry operator will apply for over HK$10 million under the Green Transport Fund, to develop a new emission-control device for ferry exhausts that will be fitted onto its nine vessels.

The device will combine two anti-pollution technologies.

One has been shown to cut sulphur dioxide emissions by 90 per cent and significantly clean up dark smoke; the other reduces nitrogen dioxide emissions by 70 per cent.

$17m

Star Ferry's cumulative losses in the three years after its Central terminus was moved. Fares have since risen twice.