KMB fare increase cut to 4.9pc, due in March

PUBLISHED : Tuesday, 19 February, 2013, 3:40pm
UPDATED : Tuesday, 19 February, 2013, 11:50pm

The government has slashed an 8.5 per cent fare rise request by Kowloon Motor Bus to 4.9 per cent, but pledged to help the loss-making company change some of its routes.

The decision to cut back the increase was taken with public affordability in mind, Secretary for Transport and Housing Anthony Cheung Bing-leung said on Tuesday.

KMB, the city’s largest franchised bus operator, had proposed the 8.5 per cent fare increase last year, to help make up its losses.

The company recorded a HK$15.2 million loss in the first half of last year, which it blamed on rising fuel prices, wages and re-routing costs.

When the fare increase takes effect, on March 17, more than 70 per cent of commuters will pay up to 40 cents more per ride.

I don’t think the 4.9 per cent is particularly high... when compared with the inflation figures since the last increase

Cheung said the 4.9 per cent increase rise was lower than the 6.3 per cent inflation rate since May 2011, when the bus operator last raised its fares. That increase was 3.6 per cent.

“I don’t think the 4.9 per cent is particularly high, particularly when compared with the inflation figures since the last increase,” Cheung said.

“We have taken into account a basket of factors in determining the fare increase, such as public affordability, the company’s operating costs, revenue, service quality and its financial sustainability,” he added.

Cheung predicted the bus company would face a difficult time with the slimmed-down increase.

KMB wants to reorganise about 55 per cent of its bus routes to reduce costs, but has encountered resistance from some district councils. Cheung pledged the government would talk to council representatives and local communities, to gather support for the changes.

KMB earlier said 70 of its 400 bus routes were running at a loss because of railway development, and many of them should be rearranged or eliminated.