Hong Kong’s MTR Corp fare adjustment formula should include broader profits, lawmakers say after fresh increase

Lawmaker Michael Tien says company’s non-property development profits should be added to mechanism used to control price rises

MTR Corp has announced fares will rise by a maximum of 3.09 per cent, second increase since government imposed formula last year

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Passengers passing through payment gates of Mong Kok MTR station. The fare adjustment mechanism is set to be used for five financial years. Photo: Elson Li

Published: 4:03pm, 27 Mar 2024Updated: 10:34pm, 27 Mar 2024

Hong Kong lawmakers have called for the MTR Corporation’s profits from rent, advertising and overseas investments to be included in a fare adjustment formula to mitigate ticket price increases after the rail giant announced another rise.

Lawmaker Michael Tien Puk-sun said on Wednesday the new ticket costs were not “unreasonable”, but argued that other profits should be included in the formula, which uses a basket of factors including inflation, the company’s productivity and profitability, and a wage index for transport sector workers.

The productivity factor is linked to profits from the operator’s property development business, a major income source, serving to effectively reduce the fare increase.

“Why are only profits from its property development business included? In the coming few years, I am sure that there will be a slump, with the high interest rates. No one will bid on the land they have now,” he told a radio programme.

“Last year, the company earned HK$7 billion, but it is not reducing its fares because its property development business profits were only HK$2 billion. Other profits came from advertisements and rent.”

The MTR Corp raised eyebrows on Tuesday when it announced fares would be raised by a maximum of 3.09 per cent in June, the second increase since the government imposed the formula last year.