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The government introduced the MTR Corporation's fare adjustment mechanism to improve the subway system's operational efficiency but, in reality, it harms the public interest.
The mechanism is a fare formula based on the inflation rate and the MTR's operating costs. However, it ignores the fact that the MTR is also a developer holding land and assets worth billions of dollars along its railway lines ('MTR Corp profits up 22pc to HK$14.7b', March 9). 
Indeed, the rental income and ever-rising land values guarantee that the MTR is one of only a few profitable subway corporations in the world. 
More importantly, because the MTR earns substantial profits from real estate, it could provide a cheaper transport service to the public without compromising its commercial interests. 
The present fare-adjustment mechanism breaks the balance between commercial and public interests. By not taking the MTR's real estate assets into account, the system tips the balance in favour of the corporation's commercial interests. 
And because the mechanism only takes operational costs into account, the rent the MTR derives from real estate cannot be channelled into the public transport service. 
The MTR is more than a profit-seeking corporation; it is a publicly franchised monopoly to provide a transport service to the public. 
We understand that the corporation needs to be responsible to shareholders and act according to the mechanism. But since the mechanism is biased and defective, a review is urgently needed to ensure the public's interests are served. 
Ironically, the mechanism is designed to regulate the extent of the MTR's fee increases but it instead justifies profit-seeking through favourable policies.
Patrick Cheng, Tai Po



Review fare formula so MTR's profits can better serve needs of public transport