Tate's Cairn Tunnel raises tolls

Updated at 5.29pm: Another tunnel linking key urban areas in Hong Kong has been forced to increase tolls for vehicles, the government revealed on Friday. The Executive Council had approved a toll increase application from the Tate's Cairn Tunnel Co, a spokesman said.

The Tate's Cairn Tunnel links Hong Kong Island East - through the Eastern Harbour Tunnel - and Kowloon East with the New Territories. The 4km tunnel opened on June 26, 1991.

The spokesman said that from August 1, tolls for light-goods vehicles would rise from $17 to $18; for private cars and taxis tolls would rise from $10 to $12 and for heavy-goods vehicles, tolls would increase from $20 to $23.

The move comes after the privately-run Eastern Harbour Tunnel increased tolls 67 per cent on May 1. The controversial move angered many motorists who initially boycotted the tunnel in favour of the Cross Harbour Tunnel at Hung Hom.

The spokesman said the toll rise was necessary to help improve the troubled financial position of Tate's Cairn Tunnel Co. The company has suffered financial losses for some time.

'If no toll increase is allowed, it will achieve an internal rate of return (IRR) of 3.87 per cent. Even with the current toll increase, it will only generate an IRR of 4.9 per cent over the 30-year franchise period, the spokesman said.