THE Kowloon Motor Bus Company plans to axe or reduce 82 of its unprofitable routes, which will save the company $70 million a year. After meeting KMB officials, Association for Democracy and People's Livelihood member Chiu Kum-hoi said yesterday that a consultancy study recommended that the company reduce bus frequencies in urban areas where the population had declined rapidly as people moved to the new towns. It also recommended cutting urban service by merging routes and bus terminals, and using smaller vehicles. The decline in demand in older Kowloon areas has led to a wastage of the company's resources and the company has been consulting the relevant district boards about cutting services. The consultancy study, which started last September, was expected to be finished soon and would then go to the Government and the district boards for approval, according to Mr Chiu. KMB's senior management said cutting the unprofitable routes would reduce pressures on its proposed 19.6 per cent fare rise. While details of the plan to axe bus services has yet to be disclosed, it is likely to come under fire from district board members. A Wong Tai Sin District Board member, Liu Sing-lee, said the board opposed KMB's re-routing arrangements proposed at a meeting last week. ''The plan included the merging of some routes in the Tsz Wan Shan public housing estates, which would cause much inconvenience to the people living there - they would have to walk a long way to the bus terminal,'' Mr Liu said. ''I think KMB should take into account the needs of the people in the older areas although the demand has decreased rapidly.'' Meanwhile, ferry passengers could face regular yearly fare increases under a proposal designed to avoid regular negotiations between the Government and the ferry company over price rises. Hong Kong Ferry Company said yesterday it believed that fewer people would use its services when reclamation work in Victoria Harbour was completed because its Central piers would be 400 metres further north. But rather than apply for massive price increases to recover the loss in revenue, it would use money from property development. It proposed having regular annual below-inflation fare increases in place of the current system of price requests, which often takes up to six months to be authorised by the Government. The Government has not responded to a request for a 16 per cent fare increase proposed in June. However, a spokesman for the company said it would not be revising its request to take the delay into account. ''We are hopeful that they will respond in the first quarter of 1994,'' a company spokesman said. ''We have proposed a 10-year plan and hope that an increment will be made each year at just below the inflation rate.'' The company, which made a pre-tax profit of $62 million in the first six months of the year, has a government franchise to develop part of the reclamation area around the new piers. It hopes to use profit from commercial development there to allow them to keep price rises to just below inflation.