A bus operator yesterday hit out at proposals to link applications for fare increases with profits. The Transport Department has said companies will have applications for rises rejected if profits exceed 13 per cent - the average rate of return from all bus operators over the past decade. They will also be required to hold back half of any profits in excess of the benchmark as revenue for the following financial year. The department believes the new measures will help reduce the pressure for fare increases and make the fare mechanism more accountable. New World First Bus, which took over operations from China Motor Bus two years ago, said it was against profit capping that would hamper ability to maintain normal services. 'The rate of return should only be treated as one of the reference indicators, and not as the sole mechanism in considering the fare level. There are other determining factors including an individual bus company's operating situation and service standard,' said general manager Kwan Chuk-fai. 'Also, the rate of return benchmark should be set on the same level as other public utilities such as electricity companies. One special point of consideration is that bus companies, unlike some public utility services, are not operating in a monopolised market.' Pressure on fares could only be relieved through increasing the number of routes and opening new networks and revenue sources, the operator said. It has about 12.5 per cent of the market. The proposals will be presented to the Legislative Council's transport panel tomorrow.
