Proposed MTR fare hike may be halved, says Michael Tien

The government aims to cut the MTR's proposed 3.2 per cent fare increase by half, according to a lawmaker briefed on the negotiations between the two sides on new tariffs.

Michael Tien Puk-sun, of the New People's Party, said he had heard from the government that it and the rail corporation were in the final stages of negotiations, and that a new formula for setting fare increases would be announced this week.

"My impression is that it's not so much about the formula now. It's about whether the final figure would please the public," said Tien, a former board chairman of the Kowloon-Canton Railway Corporation.

Both sides were trying to come up with different ways of putting the formula to suit their needs, he said.

Under the current formula the MTR could increase its fares by 3.2 per cent in June. The formula takes into account changes in the consumer price index and wages in the transport sector. The sum of the two increases is divided by two, and a productivity factor of 0.1 percentage points is then deducted.

The year-on-year inflation rate in December was 3.7 per cent and the change in transport wages, announced yesterday, was 2.9 per cent.

If the fare rises were adopted, they would be the fourth in consecutive years under this formula.