No CMB fare rises to offset payments

CHINA Motor Bus (CMB) will not be allowed to raise fares to recover the cost of redundancy payments to drivers, a Transport Advisory Committee member said yesterday.

CMB pledged $17 million to avert a drivers' strike on Tuesday after 173 employees were made redundant by the loss of 26 routes to Citybus next month.

There was speculation that the firm would soon submit a fare rise proposal to the committee to offset the severance payments. The company was allowed an 18 per cent fare rise only three months ago.

Committee member Professor Tenny Lam Chung-yu said it would only consider forecasts of operation costs - including salary, maintenance and fuel expenses - when reviewing new fare proposals put forward by bus companies.

''In principle, we do not look back and approve fare rise requests based on a company's financial accounts in the past. Rather we scrutinise estimates of future expenses and advise new fares accordingly,'' Professor Lam said.

The $17 million payment did not seem to cause CMB any economic crisis to justify an urgent fare review, he said.

CMB officials dismissed speculation about fares going up because of the redundancy payments.

Officials said the next fare rise, expected in April, would more likely take into account the impact of income lost from the 26 routes taken from CMB.

They said the redundancy payments amounted to less than a quarter of the company's profit in the past financial year.