Toll hike ignites call for government to take control
Wednesday, May 04, 2005
The government should take full control of all tunnels in the future, rather than relying on the private sector and leaving the general public powerless to stop toll increases, according to legislators and pressure groups.
The latest toll increase, about 67 per cent, at the Eastern Harbour Tunnel showed the fare adjustment mechanism derived from the build-operate-transfer (BOT) model works against public interest, they said.
"The government has hundreds of billions of dollar and so it should not hesitate to spend several billions on infrastructure and [take] full control of [tunnels that will be built in the future]," Democratic Party's legislator Andrew Cheng said.
Pressure group Coalition to Monitor Public Transport and Utilities spokesman Richard Tsoi said the BOT model was unreasonable as neither the public nor the government has a say on tunnel tolls, which affects people's livelihoods.
He said the government should take control of tunnels in the future because private operators are only concerned about profits, without considering the prevailing economic conditions.
One of the earliest examples of BOT in Hong Kong was the Cross-Harbour Tunnel, which the government resumed ownership of after the 30-year franchise expired in August 1999.
Opened in 1972, Hong Kong's first harbor crossing remains one of the territory's busiest major roads.
Later the government negotiated with several consortiums to adopt the BOT model in planning new tunnels in different parts of the city.
In 1986, the government gave New Hong Kong Tunnel the lease to run the Eastern Harbour Tunnel on a 30-year franchise. The lease ends in August 2016.
In July 1988, Tate's Cairn Tunnel was handed a 30-year franchise to run the tunnel connecting Wong Tai Sin and Sha Tin as an alternative route to the 38-year Lion Rock Tunnel, which also connects the New Territories to Kowloon.
In 1993, Western Harbour Tunnel signed a 30-year franchise with the government to provide the third alternative cross-harbor route. In May 1995, Route 3 (CPS) Co Ltd signed a BOT agreement with the government to build and operate Route 3, or Tai Lam Tunnel and Yuen Long Approach Road, on a 30-year franchise to provide an alternative to the busy and aging Tuen Mun Road. These private operators have two ways to increase their tolls to reap their so-called "expected" or "reasonable but not excessive" profits.
First, the tunnel operators can apply to the government for a toll increase.
If the Chief Executive-in-Council rejects this, they can seek arbitration. The arbitration body, which is independent, comprises barristers, but is separate from the courts.
This method is applicable to Eastern Tunnel and Tate's Cairn Tunnel.
A second method for toll increases lets operators draft a timetable of their expected profits to be included as a part of their by-laws.
Once agreed with the government, they can increase their toll according to a set timetable.
This method, which was described by the legislators as "an automatic toll increase", is applied to Western Harbour Crossing and Route 3. "I feel the BOT model is unsuitable unless we can impose some restrictive terms.
"But I believe [tough terms] will discourage [the private sector from operating tunnels]," Democratic Party legislator Andrew Cheng said.
He suggests the government include terms, such as achieving a set traffic flow target and empowering the Legislative Council to decide the tunnel toll, if the government continues to adopt the BOT model.
But so far no one, including senior government officials, has proposed a solution to stop sharp increases in tunnel tolls.
Pro-democracy District Council member for Wong Tai Sin, Andrew To, said he had asked legal experts to study the possibility of a filing lawsuit in the courts to stop the toll increase at Eastern Harbour Tunnel. However, he said that lawyers advised him that there is a gray area in the law which makes it unclear on whether the government is the only party eligible to lodge an appeal against the arbitration ruling in January 2005, which enabled Sunday's toll increase.