Lawmakers say new MTR fare plan a letdown

Revised fare mechanism does not help reduce public burden except in times of inflation

PUBLISHED : Saturday, 20 April, 2013, 12:00am
UPDATED : Saturday, 20 April, 2013, 5:24am

Lawmakers said they found a revised mechanism to determine MTR fares disappointing as they wanted the railway to share more of its profit with passengers.

Their comments in a Legislative Council transport panel meeting yesterday came after the government and the MTR announced the result of a review of the fare adjustment mechanism on Tuesday.

The original formula was adjusted so that fare rises would be lessened, and a profit-sharing system was introduced so that the railway had to offer concessions of a certain amount when its profit exceeded HK$5 billion.

An affordability cap under the revised mechanism would also cap the effective fare increase to match changes in median household income by offering discounts to Octopus card users. The MTR would recover the discounts in the following two years.

Michael Tien Puk-sun, of the New People's Party and a former chairman of the Kowloon-Canton Railway Corporation, said the formula would not ease the burden of high inflation.

We have experienced the hardship of deflation. So what should the public hope for? A fare increase or deflation?
Lawmaker Alice Mak Mei-kuen of the Federation of Trade Unions

As the formula takes into account inflation and the change in transport workers' wages, a fare freeze or decrease would only happen under deflation.

Lawmaker Alice Mak Mei-kuen, of the Federation of Trade Unions, said: "We have experienced the hardship of deflation. So what should the public hope for? A fare increase or deflation?"

She said the concessions offered were "totally different from freezing or reducing fares".

The Civic Party's Dr Kwok Ka-ki and the FTU's Tang Ka-piu said a fare stabilisation fund should be set up to avoid fare rises. MTR Corporation chief executive Jay Walder said 4.2 million out of five million passenger trips every day enjoyed one or more discounts.

Transport minister Professor Anthony Cheung Bing-leung said the affordability cap was protecting the public from soaring fares, and the profit-sharing system was only one way the MTR could offer discounts for passengers.

The Post reported yesterday that, instead of alleviating the financial pressure on the public, the revised mechanism would have saved the MTR HK$1.53 billion if it had been used in the past three years. The MTR said yesterday the adjusted system had a long-term and compound effect on its fares, and the regular concessions it offered amounted to HK$1.7 billion a year.