An adjustment system would be used to set fares on the two railways after a commitment by the MTR Corporation not to raise fares expires in April 2008, a government official said yesterday. Speaking after the RTHK City Forum, Patrick Ho Chung-kei, deputy secretary for environment, transport and works, sidestepped questions on whether fares would be increased immediately after the agreement expires. He said the adjustment system would be introduced when the two rail operators merged to allow fares to rise or fall. It would be similar to the one used by bus operators, and take into account the Consumer Price Index, wage index and productivity gains. 'There is no way to predict future economic development and the wage index. We will have to consider the actual situation at the time. But we can assure that the rail operators will not have raised fares for 11 years [by 2008]. And the sooner the two operators are merged, the sooner the public can enjoy fare concessions. 'Whether a positive or negative result is obtained under the formula [of the adjustment mechanism], the operator cannot argue. It has to follow the actual situation to increase or reduce fares.' Under a memorandum of understanding announced last week, the Kowloon-Canton Railway Corporation will keep ownership of the rail system for 50 years and lease it to the Mass Transit Railway Corporation, which will operate the system. Passengers will enjoy fare cuts ranging from 5 to 10 per cent after the merger, depending on distance travelled. Richard Tsoi Yiu-cheong, of the Coalition to Monitor Public Transport and Utilities, said the 50-year lease was too long and should be cut to 20 years. He said the fare concessions were not sufficient, and called on the government to review the flexibility of the fare adjustment system. 'It lacks flexibility. When the company makes a lot of profit, it will also increase its fares because of inflation. This is against the interest of the general public. 'We cannot accept such an adjustment mechanism ... its simple formula neglects the affordability of the general public, and the profits of rail operators. We look forward to a further fare cut on the day of the merger,' he said.