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Tunnel vision: Confusion surrounds attempts to sort out the Hong Kong cross-harbour toll mess

Analysts and the public were expecting action on the toll front when the government took over the Eastern Harbour Tunnel, but instead it ordered another study

PUBLISHED : Monday, 22 August, 2016, 8:37pm
UPDATED : Friday, 18 November, 2016, 4:33pm

[Wesley Wan, Class of 1970] When the government took over management of the Eastern Harbour Tunnel from a private operator, Hongkongers were hoping it would use the opportunity to cut toll prices.

The Cross-Harbour Tunnel from Causeway Bay to Hung Hom exceeds its daily capacity by almost 50 per cent each day.

Meanwhile, the Eastern Harbour Tunnel, the product of the government’s “build-operate-transfer” model which saw it run for 30 years by franchisee New Hong Kong Tunnel Company, remained underutilised in the lead-up to the expiry of the franchise at the beginning of this month.

Many saw the franchise handover as an opportunity for the government to tackle the issue head-on and adjust tolls to encourage motorists to use the Eastern Harbour Tunnel and thereby lead to an easing of congestion through the altered traffic patterns.

But these hopes were dashed when transport minister Anthony Cheung Bing-leung poured cold water on the idea by ruling out any immediate toll adjustments.

Instead, he said the government would wait for the outcome of a toll adjustment study of the city’s three harbour crossings before mapping out the road ahead.

The government, which now controls the Eastern Harbour and Cross-Harbour tunnels, will take over the Western Harbour Tunnel in 2023.

The study, commencing next January, is expected to be completed within the 2017/18 legislative year. The government is then expected to submit a proposal for an overall toll adjustment to the Legislative Council’s transport panel for discussion. It remains unclear when actual changes, if any, will be introduced.

Polytechnic University transport specialist Dr Hung Wing-tat was among experts who expected the government to use the opportunity to make adjustments, as it was an issue which had been repeatedly discussed in Legco for more than 10 years.

“The government should take action now to go ahead with the toll adjustments,” he argued. “There has already been a consensus. The government shouldn’t find excuses to delay this issue.”

Hung, associate professor in the university’s civil and environmental engineering department, believed Cheung’s inaction was the result of trying to avoid controversy during the Legco polls.

“My guess is that the government doesn’t want it to become a controversial topic during the Legco elections,” he said.

“It prefers to maintain the status quo instead of making changes to improve tunnel traffic. But this shouldn’t be the way forward.”

For him, the changed ownership from the New Hong Kong Tunnel Company upon expiry of the franchise provided the best opportunity for the government to introduce immediate toll cuts at the Eastern tunnel and implement a mild rise at the Hung Hom tunnel.

Indeed, making a deeper cut at the former and a mild rise at the latter was the key recommendation of a government-commissioned consultancy study in 2010.

The study’s purpose was to redistribute traffic between the two crossings as notorious jams at the Hung Hom tunnel were the source of frustration for drivers and passengers who were reluctant to pay more to use the Eastern tunnel.

The Cross-Harbour Tunnel, which opened in 1972 under a franchise and was taken over by the government in 1999, reported daily traffic of 115,722 vehicles last year, exceeding its capacity of 78,000 vehicles per day by almost half.

In comparison, the Eastern tunnel connecting Lam Tin and Quarry Bay has a daily capacity of 78,500 vehicles, but only 75,469 used it per day last year.

The third crossing – the Western Harbour Tunnel connecting Sai Ying Pun and West Kowloon – was not included in the study’s recommendations as the government is leaving the operator to its own devices until the franchise expires in April 2023.

Charging the highest fees among the three with a daily capacity of 118,000 vehicles, it is significantly underutilised with only 65,325 using it every day last year.

Users prefer the Hung Hom tunnel for two main reasons – its central location and connectivity allow shorter journeys, convenience and lower fuel costs; and its comparatively lower tolls as fees have not been raised since 1999.

The 2010 study forecast that reducing tolls for the Eastern tunnel and slightly raising them for the Hung Hom crossing would steer 4,000 vehicles to the former and reduce the latter’s queues by about 40 per cent. The study suggested for example that tolls for private cars using the Eastern crossing should be cut from HK$25 to HK$20.

“This was a consensus reached in Legco and accepted by the government a few years ago. Even transport minister Anthony Cheung promised to go ahead with it at the time,” Hung said.

In early 2013, Chief Executive Leung Chun-ying announced that the government had already worked out proposals to alleviate congestion at the harbour crossings following various consultations. Increasing the tolls for the Cross-Harbour Tunnel and reducing them for the Eastern tunnel was the broad direction, he said at the time.

But the transport chief suddenly made a U-turn in 2014, deciding to put the brakes on this proposal due to “changing circumstances”.

To soothe public discontent, Cheung pledged at the time that next year would be a better time to reconsider the plans when the government had regained ownership of the Eastern tunnel.

Hung suspected the U-turn was due to the government’s reluctance to negotiate with the Eastern tunnel’s operator.

It rings true because there has been a long and unhappy history of the government wrestling with the Eastern tunnel’s operator about toll rises over the past 19 years.

According to the Eastern Harbour Crossing Ordinance, any toll adjustments require an agreement between the Executive Council and the tunnel company. Either party may seek arbitration if an agreement cannot be reached. The arbitrators have to judge whether, with toll adjustments, the business is reasonably but not excessively remunerative to the tunnel company.

Making use of this arbitration system against the government, the Eastern tunnel’s operator successfully implemented steep rises in 1997 and 2005. A rate of return of 15 to 17 per cent was adopted by arbitrators at that time as reasonable for introducing toll rises.

But in 2011, with a rate of return of 14 per cent and an after-tax profit of HK$452 million, the tunnel company suffered defeat as arbitrators rejected its proposal to increase fees by up to 42 per cent. The rate of return was no longer acceptable given the economic conditions at the time.

Now, with the only hurdle gone, Hung said the government should implement toll adjustments at the two crossings soon after the Legco elections.

“My opinion is that the government should take immediate action while it can,” Hung said.

He argued toll rationalisation at the three crossings was another matter as it sought to provide a long-term solution to the distribution of tunnel traffic after the Western crossing’s franchise ends in 2023.

The government says the study will take into account the 2018 completion of the Central-Wan Chai bypass, which is expected to divert more traffic to the underused Western tunnel.

However, Wesley Wan Wai-hei, honorary Hong Kong Automobile Association life president and member of the government’s Transport Advisory Committee, has an alternative suggestion.

Instead of making immediate toll adjustments, he said the government should provide concessions at the Eastern tunnel for six months, bringing its tolls into line with those at the Hung Hom tunnel so everyone could see the actual impact on traffic there.

“As a motorist, of course I hope the government can reduce tolls at the Eastern Harbour Crossing,” he said. “It shows the government is concerned with this issue, and is willing to do something now for the public.”

For Wan, short-term concessions provide greater flexibility for future changes and will also provide a clear picture of the impact of toll changes on the two crossings.

“Let’s give it a try to align the fees of these two crossings for six months,” he said.

“Let users make their own choices without the toll consideration and see if this can ease traffic congestion at the Hung Hom tunnel and if yes, to what extent.”

Short-term concessions were preferable because the opening of the Central-Wan Chai bypass and the MTR’s Southern Island Line by the end of this year would certainly help ease traffic at the Hung Hom tunnel, Wan argued.

“If the government makes toll adjustments now, but later the traffic condition doesn’t turn out as expected, it would be very difficult to reverse the fees,” he said.

For Wan, the ideal situation is to adjust the tolls of the three tunnels to the same level so users can choose a crossing according to their destination, not the toll.

“This would make sense and help resolve congestion,” he said.

Richard Tsoi Yiu-cheong, spokesman of the Coalition to Monitor Public Transport and Utilities, also jumped into the fray, criticising Cheung for doing nothing before the takeover of the Eastern tunnel and lacking the vision to resolve the traffic issue.

“I just feel it’s so strange why it takes the government so long to plan for this toll rationalisation study,” he said.

“Shouldn’t the study be already done before the takeover of the Eastern tunnel if the government sincerely wants to tackle this congestion problem?”

He pointed out that after the new study was completed in 2018, there might be a new transport secretary in charge of the issue who might have a different view about the issue of toll adjustments, causing a lot of uncertainty.

“It is obvious the government has missed this golden opportunity to ease tunnel traffic ...Maybe we have to wait until 2023 when the Western tunnel is handed over to the government.” Tsoi said.