New fare system could have saved MTR HK$1.53 billion
Revised fare mechanism good for the railway's revenue but it may not be such a saving for commuters, despite bid to factor in affordability
The MTR could have saved HK$1.53 billion in the past three years if it had used a revised mechanism to determine its fares, a South China Morning Post study has found.
A transport expert has described as a failure the government's bid to factor into fares the railway's profit and passengers' ability to pay, and an economist has said the revised mechanism could have been tougher.
The new formula, announced on Tuesday after a review of the MTR's fare adjustment mechanism, took into account inflation, transport workers' pay and the railway's productivity.
A profit-sharing system was also introduced in the revised formula, where the MTR would have to grant a specified amount in commuter concessions when its business profits exceeded HK$5 billion.
But the Post's study found that under the new mechanism's milder fare increases and mandatory concessions, passengers would have saved up to 78 per cent less in the past three years than under the old system, in which the railway voluntarily offered fare discounts.
For example, if the revised formula had been applied in the 2011 fare increase, the MTR's mandatory concessions would amount to only HK$125 million and it would receive HK$45.4 million less in revenue from a milder fare increase.