KMB and its sister company Long Win will be allowed to increase bus fares by only 3.6 per cent and 3.2 per cent, respectively, after the Executive Council more than halved their original requests.
The companies said they were disappointed as the new fares, which will take effect on May 15, were much lower than their demands of 8.6 per cent and 7.4 per cent, respectively.
However, the government said the new adjustments were justified and hoped the companies could 'share the hard times' with society.
Transport Minister Eva Cheng said yesterday the two companies had a case for fare increases to maintain their financial viability and service sustainability, but the public was concerned about the impact of bus fare increases on their livelihoods.
'However, having regard to public affordability and acceptability in the inflationary environment, it is hoped that the bus companies would share the hard times with the community, and continue to provide quality services,' she said.
'The approved fare increase rates are in effect lower than inflation ... When we look at cumulative inflation, from the time of the last increase until now, it is about 5.72 per cent.'
About half of KMB's 2.59 million daily passengers will have to pay between 30 and 50 cents more for each journey; the rest will pay 10 to 20 cents more or not be affected.
The increases were not enough to offset rising fuel prices, KMB said. 'The fuel [oil] price has risen by 60 per cent to the current level of HK$138 per barrel. It will drive up KMB's total operating costs this year by about 10 per cent, which is far higher than the approved fare increase,' it said.
The company applied for the fare rise in July last year. It said the increase was necessary because of soaring fuel prices, the cost of buying new buses, pay rises and increases in operating costs.
'Looking ahead, both companies will face an increasingly challenging operating environment with mounting pressure from rising fuel costs, toll charges and purchase prices of new buses and bus parts, in addition to the fierce competition in the public transport market,' it said.
Lawmaker Wong Sing-chi, of the Democratic Party, criticised the fare increase, saying it pandered to the companies and ignored the financial burden on passengers.
'The bus companies are like a lion which wants to bite a big chunk out of the public,' he said.
The companies were heavily criticised for demanding a hefty increase - especially coming just 18 months after the previous fare rise, in mid-2008. In that case KMB asked for a rise of 9 per cent and was awarded 4.5 per cent instead.
KMB said it had lost passengers in recent years as the rail network expanded. The daily average fell to 2.59 million passengers last year - a drop of 3.8 per cent from 2008.
KMB and Long Win say they are disappointed by the fare increases
They had originally asked for more than twice the amounts granted, seeking rises of 7.4 per cent and: 8.6%
Now some rides will cost 10 to 20 cents more; half of all journeys will cost an additional, in HK cents, 30 to: 50Topics: Cent Kowloon Motor Bus Gasoline and Diesel Usage and Pricing Business