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Anthony Cheung Bing-leung (left), Secretary for Transport and Housing, and Raymond Ch'ien, MTR chairman, announce the new fare rise on Tuesday. Photo: Dickson Lee

MTR railway fares to go up by 2.7pc in June

Rail operator will have to give concessions back to passengers for any delay over half an hour

Ada Lee

A ride on the MTR is going to cost more from June. Fares will go up 2.7 per cent - but it could have been as much as 3.2 per cent.

The increase was announced yesterday after completion of a review of the formula for calculating fare rises.

The rail operator's fares are adjusted yearly under a mechanism that takes into account inflation and transport workers' pay.

The sum of the two elements is halved, then a small percentage is deducted to reflect improvements in productivity. The lower fare rise resulted from an increase in this percentage from 0.1 per cent to 0.6 per cent. The new fares, under which 80 per cent of passengers will pay 30 cents more, will provide an extra HK$360 million in revenue.

The Transport and Housing Bureau said a new profit-sharing mechanism would also be introduced whereby if the MTR's underlying business profit exceeds HK$5 billion, it will have to give back HK$50 million to HK$250 million as concessions to passengers.

The public's ability to pay will also be reflected by capping any increase according to any change in median monthly household income.

When the rate calculated, according to the formula, is higher than the income change, discounts will be offered. When household incomes don't rise, the effective fares will be frozen and the MTR will recover the discounts in two following years.

Household incomes rose 5.5 per cent year on year in the fourth quarter last year.

A penalty mechanism is also being introduced. For every incident which causes a delay of more than 31 minutes, the MTR will have to give back HK$1 million to HK$2.5 million in concessions to passengers, depending on the length of the delay.

Transport minister Professor Anthony Cheung Bing-leung said the new mechanism struck a balance between the MTR's corporate responsibility and financial sustainability.

MTR Corporation chairman Dr Raymond Chien Kuo-fung (pictured) said the new mechanism reflected the public's expectations. New monthly passes and a City Saver ticket would be launched for frequent travellers.

In 2011, the MTR's underlying business profit was HK$10.4 billion. It offered concessions of HK$670 million. Under the new formula, it would have had to give back only HK$175 million.

Economist Dr Andy Kwan Cheuk-chiu said the government could have made the new mechanism tougher, as the MTR could afford to be more generous.

This article appeared in the South China Morning Post print edition as: 2.7pc rise in MTR fares from June
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