Passengers just want fair deal from latest Hong Kong MTR fares formula
- New link to profits of city railway company must be seen to work for train users and bolster reputation of system
No one likes to keep paying more for widely used services. Unfortunately, their operators in Hong Kong are often protected by profit schemes or adjustment formulas, putting the public in a vulnerable position.
A fair and reasonable mechanism for fares and charges is what the city needs.
Ahead of the annual fare adjustment by the city’s sole railway operator, the MTR Corporation and the government have made changes to a long-standing formula. For the first time, the company will factor in profits from property development when setting ticket prices.
The welcome move comes in response to criticism that the railway giant still charges more each year despite making hefty profits. But it remains to be seen what effect it will have on limiting fare rises and whether such an adjustment is considered reasonable.
Depending on the level of profits, a subtraction factor of between 0.6 and 0.8 percentage points will be applied to tickets. However, a “productivity factor” that enabled fare reductions in the past has been replaced, raising concerns that the new link to profits may result in passengers receiving only the slightest benefits.
The suggestion that there may still be fare increases to come this year has also done little to instil confidence in the arrangement.
The previous formula, comprising a basket of bewildering indicators, had long been a subject of debate. Although it was supposed to balance fare increases and reductions according to economic conditions, adjustments were mostly one way and the railway operator had to resort to an array of discretionary rebates over the years to lessen the impact of rises.
The public may well be unimpressed by the revamp, which has been criticised by some as just more window dressing, following post-Covid special fare reductions, further deferral of agreed increases and half-price concessions on special days.
The public is understandably keen to see a new mechanism that can effectively rein in ever-increasing train fares. The government, however, has much broader considerations.
Hong Kong transport minister backs MTR Corp’s new fare adjustment mechanism
In addition to ensuring fair play for passengers and strengthening the link between fares and the railway company’s service performance and profits, officials stress the long-term financial sustainability of the operator must also be taken into account. This is important as the MTR Corp requires resources to tackle new projects as well as to conduct maintenance and asset renewal.
The last thing the city needs is another formula that continues to be a source of dispute.
It is to be hoped that the latest method can help keep fares reasonable and affordable, without undermining the MTR as a world-class railway system.
