Tram passengers over the age of 65 will not be affected by Hong Kong Tramways' proposed fare rise, and will continue to pay the existing half fare of HK$1 until November next year, when they would face an increase of 10 HK cents. The move, announced by Tramways' French operator Veolia Transport yesterday, came after lawmakers said the plan to raise the fare by 50 HK cents, or 25 per cent, to HK$2.50 will hit the elderly hard. Children under 12, now also paying a HK$1 fare, would pay a new fare of HK$1.30 under the scheme. Hong Kong Tramways managing director Bruno Charrade said the fare increase was necessary to sustain the century-old business. 'In the past decade, little investment had been made on the system, and now we're facing difficulties with the operation of the company. The technology we use in the company is more than 40 years old. We now face the situation of improving the safety and reliability of the system, and we need to make some investment.' Charrade said the firm was expected to incur a loss next year without the fare rise and if the plan was approved it could earn up to HK$25 million in extra annual income. Still, it will take about 10 years for it to recoup the investment it made in a mega-improvement project, which will see revamping and upgrading of tracks, motors, brakes, the cable system, cabins and information system. The company is also negotiating with the government over the possibility of adding new turnaround sites in Wan Chai, Causeway Bay and North Point to enhance services. But in the long run, it is expected to make more profit as the new system will reduce power consumption and extend the life of overhead wiring and electronic parts. Tram ridership slipped an average of 1.5 per cent in each of the last 10 years, while wages surged by more than 20 per cent and electricity bills by 41.18 per cent.