KMB to bump up fares by 4.9pc, citing financial squeeze

Beginning next month, trips on city's largest bus operator will rise by as much as 40 cents, but that may not be enough to turn its books around

PUBLISHED : Wednesday, 20 February, 2013, 12:00am
UPDATED : Wednesday, 20 February, 2013, 4:50am

About three out of four Kowloon Motor Bus passengers will face fare increases of up to 40 HK cents per trip next month, after the bus operator received government approval for an average 4.9 per cent rise yesterday.

The increase is higher than the previous two fare rises - 3.6 per cent in May 2011 and 4.5 per cent in June 2008 - but much lower than the 8.5 per cent that KMB asked for in November.

Secretary for Transport and Housing Professor Anthony Cheung Bing-leung called it a "fair increase" while KMB said it was "extremely regrettable".

The heftiest increase, of 7.5 per cent - a fare rise from HK$5.30 to HK$5.70 - will be applied on route 79K from Sheung Shui to Ta Kwu Ling.

The lowest fare rise, 3 per cent, will be introduced on six short-haul routes, such as 39M in Tsuen Wan and 273 in Fanling. The new fares will take effect on March 17.

Cheung noted that KMB, the city's largest bus operator, recorded a loss of HK$15.2 million in the first half of last year and would probably run a deficit for the whole year.

Its financial situation, plagued by rising fuel prices and inefficient routes - was unlikely to be "completely improved" by the higher fares, he said.

"We feel that the approved fare increase of 4.9 per cent is a level that should be acceptable to the community, but we are aware that the KMB accounts will remain difficult," Cheung said. He urged the public and district councils to support the company's proposed reorganisation of some bus routes.

He said the rate of increase was lower than the accumulated inflation of 6.31 per cent - and the 7.14 per cent rise in the median monthly household income - since the previous fare increase in May 2011. It is also lower than the 5.81 per cent suggested by the Transport Department's fare-adjustment formula, which takes into account inflation and transport workers' salary raises.

A lawmaker said the increases were unreasonable.

The NeoDemocrats' Gary Fan Kwok-wai, deputy chairman of the Legislative Council's transport panel, said the move meant the public had to bear the consequences of the company's poor management.

The Executive Council adopted the increase too quickly, he said, because district councils were expecting to see plans for route reorganisations in April.

The main reason for the KMB losses, Fan said, was that it separated its profit-making advertising business from the bus operation.

"If the profit from its advertisement business was considered as well, there wouldn't be any deficit," he said.

KMB's corporate affairs director Vivien Chan Pik-kwan said fuel costs had increased 40 per cent and salary expenses 9 per cent since the 2011 fare rise.