Bus fares to go up on Jan 25

 

The new fares will take effect on Jan 25

The Hong Kong government today approved bus fare increases of between 4.5 per cent and 7.5 per cent, effective Jan. 25, resulting in 80 per cent of passengers expected to pay no more than $0.5 extra per trip and about 95 per cent expected to pay no more than $1 extra per trip.

The fare increases approved by the Chief Executive in Council (CE in C) were mostly lower than the increases requested by franchised bus operators:

(a) The Kowloon Motor Bus Company (1933) Limited (KMB) got an overall 4.3 per cent weighted average rate of increase after a 0.9 percentage points (ppts) mitigation effect by its Franchised Bus Toll Exemption Fund (TEF) (i.e. 5.2 per cent before mitigation); it applied for 6.5 per cent.

(b) Citybus Limited (Franchise for the Urban and New Territories bus network) (CTB(U&NT)) got an overall weighted average increase of 7.5 per cent; it aplied for 9.5 per cet.

(c) New Lantao Bus Company (1973) Limited (NLB) got an overall weighted average increase of 6.5 per cent; it applierd for 6.5 per cent.

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A government spokesman said the Government has duly exercised its gatekeeping role by carefully and rigorously scrutinizing the fare increase applications from franchised bus operators.

“The decision of the CE in C endeavored to minimise impacts on livelihood on one hand, and on the other also take into account the financial sustainability of franchised bus operators, with a view to enabling the franchised bus operators to continue to provide reliable and safe services to citizens,” the spokesman said.

“During the approval process, the government has examined the operating situation of the franchised bus industry, forecast financial performance, indices relevant to public affordability, as well as quality and quantity of their bus services,” the spokesman said.

The Government has also exempted franchised bus operators from paying tolls when using government tolled tunnels and control areas since February 2019. The Tunnel Exemption Funds set up with the tolls saved has continued to perform its function, and effectively reduced the rate of fare increase of KMB this time.

The spokesman said, "Although patronage and revenue of franchised buses have bounced back noticeably after the epidemic, they are unable to fully recover to the pre-epidemic level due to reasons such as changes in travelling and consumption patterns.

“Further, franchised bus operators need to maintain reasonable remuneration packages to attract a high-quality workforce, as well as make investments in transition to a new energy bus fleet. The Government has been assisting franchised bus operators in making substantial efforts to improve operational sustainability over the past few years, including broadening sources of non-farebox revenue, and enhancing operational efficiency through rationalisation of bus routes having regard to latest patterns of passenger demand. After careful consideration of the overall situation, the Government is satisfied that suitable adjustments to fares are necessary to help the franchised bus operators to maintain reasonable financial capability to continue to operate and invest."

The spokesman continued, "There had been few increases in franchised bus fares for a period in the past. Over the longer horizon, the cumulative rates of fare increases are still noticeably lower than changes in the Composite Consumer Price Index (CCPI) and other indices within the corresponding period. Taking the figures since mid-2008 as an example, after including the fare increases approved this time, the cumulative fare increases of the three franchises over the some 16 years averaged 1.6 per cent to 2.2 per cent on a yearly basis, while the cumulative change in the CCPI averaged 3 per cent on a yearly basis and the cumulative change in Median Monthly Household Income averaged 4.2 per cent on a yearly basis."

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