Hong Kong railway fares should be adjusted according to operator’s profits, consultation finds

Suggestions follow 2.65 per cent fare rise this year after MTR Corp made HK$13 billion profit

PUBLISHED : Thursday, 27 October, 2016, 8:28pm
UPDATED : Thursday, 27 October, 2016, 10:48pm

Hong Kong’s MTR rail operator should reflect its profitability in its fare adjustment mechanism by freezing or even cutting prices when profits reach a certain threshold, submissions to a public consultation suggested.

The Transport and Housing Bureau announced on Thursday that 408 submissions had been received in the consultation from May to August. Of these, 349 sent in by political parties, community groups, think tanks and other organisations, were identical.

“The government noted that the mainstream views received during the consultation period suggest that the existing [mechanism] should be improved. Particularly, the operation of the [mechanism] should duly reflect the profitability of the [MTR],” a bureau spokesman said.

MTR fare rises review has Hong Kong government struggling to please both shareholders and passengers

The Hong Kong government, which owns about 75 per cent of MTR Corp shares, has passed the views to the railway company. A review of the mechanism was continuing and the outcome would be reflected in the fare adjustment next year, the bureau said.

The results of the consultation were announced after the MTR Corp triggered another round of fierce public protests when it announced a fare rise of 2.65 per cent earlier this year, despite making a HK$13 billion profit last year.

It was the seventh straight year that fares had been raised since the much criticised mechanism, which takes into account inflation, wage increases and productivity, came into effect in 2009.

In a document summarising the “key views” received, it was suggested that the MTR Corp should consider cutting fares directly rather than offering concessions. It did not make clear if this was the majority view.

A “significant” number wanted the fare adjustment mechanism to reflect public affordability, the document stated.

Many submissions suggested that periods of various fare concession programmes be extended; more money be set aside for fare concessions; more discounts provided; and more “MTR Fare Savers” be set up.

At present there are “MTR Fare Savers” devices in 32 locations across the city in which passengers enjoy a discount of HK$2 by waving their Octopus cards at the devices.

Another suggestion was that the government should not use dividends received from the MTR Corp to subsidise fares as this went against the principles of public finance.

The company replied in a statement that it had consulted people from various sectors. While some wished to see adjustments to the mechanism, others favoured keeping it as it was. It said the city had a massive railway network and this meant a stable income was vital to maintain and repair facilities.

Tang Ka-piu of the Federation of Trade Unions, formerly deputy chairman of the Legislative Council’s transport panel, said the fare adjustment mechanism also applied to public buses. The bus companies saw the need to increase fares because they struggled financially.

“The MTR does not have financial problems. It has been making big money,” Tang said.