Hong Kong ferry fee increases slammed after HK$190m subsidy

Government says it will closely scrutinise future applications

PUBLISHED : Monday, 26 May, 2014, 2:36pm
UPDATED : Monday, 26 May, 2014, 4:43pm


The government came under fire today for approving ferry fee increases – after operators were granted a HK$190 million subsidy last year – and admitted it could not rule out more raises in the future.

However, Yau Shing-mu, the undersecretary for transport and housing, told the Legislative Council transport panel meeting that any application for fee rises during the three-year term of their renewed licence would be tightly scrutinised.

“There is no guarantee that ferry companies would definitely not apply for fee rises, because the oil prices are hard to predict,” said Yau. “But if such special occasions arise, the government will be the gatekeeper.”

In March, the Transport Department approved plans by New World First Ferry Services and Hong Kong and Kowloon Ferry to increase the fare of their six ferry lines by about 5 per cent and 6 per cent due to rising oil prices and salary increases. The increase on Central-Mui Wo line took effect in April and the remaining lines will have the fees raised from July.

The approval came after a HK$190 million subsidy to the six routes during the three-year licence period from this year to 2017 passed the Legco’s Finance Committee in July last year.

“I have never seen such outlandish things before,” said panel member Kwok Ka-ki. “It’s horrifying that you’ve used taxpayers’ money and ended up being slapped back [by ferry companies].”

Kwok, representing the medical sector, said ferry services had not improved even after the subsidy and fee rises, citing poor hygiene in ferry piers, outdated facilities on ferries and heavily polluting fuel being used.

Other legislators agreed, adding that although many ferry staff’s salaries had been increasing by more than 10 per cent each year, their starting salaries were very low.

Yau said the subsidy was set to cover part of the two ferry companies’ operational costs of about HK$370 million and that the government had taken the subsidy into consideration when processing the companies’ applications for a fee rise. He said the operators had been suffering from a low number of passengers which is showing sings of decreasing further.

The fee rise had been lower than the inflation rate, he said.

Legislators also asked about the progress on starting a new ferry route between Aberdeen to Cheung Chau, which was requested by local district councillors and residents.

Principal transport officer Albert Su Yau-on said the government had finished its study on the route and felt that it was technically practicable. He said the department was now waiting for district councillors to collect and submit local residents’ opinions on potential services and prices before starting public bidding for an operator.

Su said the bidding process was expected to finish in four to six months.