Wednesday, November 25, 2015   

MTR raises fares

Eddie Luk

Tuesday, March 27, 2012

The MTR has sparked outrage with plans to raise fares by 5.4 percent despite a hefty net profit of HK$14.7 billion last year.

The increase is the highest since 2007 after the merger of the Mass Transit Railway Corp and Kowloon-Canton Railway Corp and follows increases of 2.05 percent in 2010 and 2.2 percent last year.

The new increase is based on a fare adjustment mechanism using a formula that combines the consumer price index and transport wage rises.

The company said it can raise its fare by 5.4 percent under the formula since public transport wages have soared 5.1 percent and the consumer price index has risen 5.7 percent.

MTR commercial director Jeny Yeung Mei-chun said the new fare structures, which become effective in June, will be announced at the end of May.

The increase by the railway monopoly, which moves 3.4 million people a day, will amount to an average of 39 cents extra for each journey on an average fare of HK$7.40.

It will cost 50 cents more - from HK$9.90 to HK$10.40 - for journeys from Mong Kok to Central and 70 cents extra from Sha Tin to Central, from HK$13 to HK$13.70.

But it will cost an extra HK$1 to travel from Tuen Mun to Tsim Sha Tsui East - a jump from HK$17.60 to HK$18.60.

Yeung rejected proposals to subsidize fares from property profits saying that, as revenue from property sales can change from year to year, it is crucial to keep fare revenue stable to boost railway services.

Yeung said fare discounts and concessions co
st the company HK$1.7 billion last year.

But she added: "We plan to launch various fare concessions so that more commuters can gain benefits."

The announcement drew condemnation from many sectors.

The Transport and Housing Bureau urged the operator to consider its corporate responsibility and take into account the affordability of fares for commuters.

Lawmaker Andrew Cheng Kar-foo said: "It is a disgrace for MTR to raise its fares sharply after making a hefty profit last year."

MTR net profit climbed 22 percent to HK$14.7 billion last year, thanks to better earnings from its property and commercial businesses and its overseas rail operations. Earnings from its transport operations in Hong Kong fell 6 percent to HK$2.7 billion.

Cheng urged the government to demand MTR set up a fund to stabilize fares.

Coalition to Monitor Public Transport and Utilities spokesman Richard Tsoi Yiu-cheong said the government should tell the company to consider the affordability of fares for commuters when it reviews the fare adjustment mechanism soon.

Li Kui-wai, associate professor of economics and finance at City University, said the government should consider setting a limit on MTR profits.

Several political and community groups, including the Democratic Alliance for the Betterment and Progress of Hong Kong, staged protests at MTR headquarters in Kowloon Bay yesterday against the fare increase.

The Transport and Housing Bureau said the government will review the fare adjustment mechanism with the company in the second half of this year and it has already told a consultant to study ways to improve the system.

MTR (066) share price rose 2.22 percent on the news to close at HK$27.65.

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