The MTR Corp has sent a much-needed Lunar New Year present to passengers by freezing train fares this year, but the decision may not be welcomed by the group's 460,000 minority shareholders. Until yesterday's surprise announcement, the MTRC had resolutely stood by plans to raise fares by an average of 2.3 per cent on April 1. Chairman Jack So Chak-kwong justified the decision by saying it would relieve the general public of an additional burden in difficult times. However, the 'invisible hand of Government' should not be ruled out as a factor in this decision. It is also another taste of the intervention seen as Chief Executive Tung Chee-hwa attempts to curry favour with the public in his bid for a second term in office. The Government last month announced its decision to shelve the controversial cancellation of the minimum brokerage fee for 12 months from April 1. A key reason cited was to save 7,500 jobs. The MTRC often stresses that it maintains autonomy in deciding its own fares, which means it does not require government approval for such moves. Its decision to keep fares unchanged comes at an intriguing time as recently appointed Kowloon-Canton Railway Corp (KCRC) chairman Michael Tien Puk-sun said on Tuesday the KCRC was contemplating cancelling a plan to raise fares and instead cut operating costs. The KCRC had planned to raise fares by an average of 3.1 per cent on April 1. In reply to a South China Morning Post inquiry on Wednesday on a potential fare freeze, an MTRC spokesman vaguely said: 'It's still some time away to April 1 and that's all.' It seems the two government-controlled corporations are attempting to polish their public image. Both have recently been the target of negative news. The MTRC was hit by market talk that it stood to lose its bid for the HK$30 billion Sha Tin to Central railway project to the KCRC. The KCRC did not fare better, with a potential $1.5 billion in overpayments arising from the West Rail project. It is believed that the KCRC's controversial fare increases could not escape being scrapped. That is good news for passengers, but less so for shareholders. The most recent MTR fare increase was in 1999. Between 1979 and 1999, it raised fares by an annual average of 6.9 per cent. The recently thwarted increase was seen as vital and was supposed to subsidise renovation works at MTR stations. A number of MTR stations are having a face-lift, platform screen doors are being installed and more shopping space is being made. However, growth in passenger numbers on the four MTR routes has remained flat. Patronage last year declined by nine million or 1.71 per cent to 758.42 million, while the number of passengers on the Airport Express tumbled by 1.28 million or 12.36 per cent to 10.34 million. Now that the MTRC cannot count on raising fares for lifting revenue, it will have to look to the Tseung Kwan O rail extension to be in service in August. Fares from the extension, which have yet to be determined, could offset the fare freeze on the other four lines. We will have to wait at least two weeks for any positive news on when the Government is expected to award the Sha Tin to Central railway project to either the MTRC or the KCRC. It is understood that the Government still favours the KCRC and is set to announce a decision after a management reshuffle and the investigations on some West Rail overpayments are concluded. Factors favouring the KCRC's bid include the corporation's potential listing and its offer to return rights to develop properties above train stations.