MTR fares to rise by 3.6 per cent in June
Rail firm's fines and profit-sharing requirement will be paid off by discounts
MTR passengers will face fare increases of 3.6 per cent in June - the fifth year in a row that the railway company has raised its fares despite making a HK$13 billion net profit last year.
The figure was calculated by finding the average increase between last year's rate of inflation - 4.3 per cent - and the wage rise in the transport sector - 4.1 per cent. A productivity factor of 0.6 is then deducted.
It is the second year this formula has been used. Last year, the increase was 2.7 per cent, down from 3.2 per cent under the old formula, which had a smaller productivity factor.
Any fare rise is capped at the rate of increase in the median monthly household, but that proved unnecessary as household income was up 6.16 per cent.
As part of the new pricing agreement, the MTR will also allocate HK$152.5 million for a 10 per cent discount on every second trip a passenger makes in one day.
This allows for the payment of a HK$27.5 million fine for 147 disruptions last year, and the HK$125 million that the company is required to share with passengers from its HK$8.6 billion "underlying" profits.
The MTR said the concessions would last three to four months.
It is also expected to launch a new ticket for frequent passengers on its busiest services before June.
Lawmaker Gary Fan Kwok-wai, of the NeoDemocrats, said the rate of increase was unacceptable when the company enjoyed huge profits.
He called for the fare adjustment mechanism to be revised again and for the MTR to invest more in improving services.
Another lawmaker, Tang Ka-piu, of the Federation of Trade Unions, said the train company's performance had been "disappointing" and as a result it should not be allowed to increase its fares.
"MTR disruptions are becoming more serious. They appear to involve some systematic problems," he said. "The government should do something so there is no increase at all."
Unlike fare adjustments for buses and ferries, the rate of increase is determined solely by the MTR's pricing agreement with the government.
Two independent experts have to approve the calculations submitted by the MTR and there can be no more intervention by authorities.
Last week, the Secretary for Transport and Housing Professor Anthony Cheung Bing-leung revealed that the MTR was considering linking its directors' pay to disruptions on the railway.