MTR poised to freeze fares

MTR fares are expected to be frozen this year, the rail operator’s chief executive Jacob Kam Chak-pui said, and there is just one last piece of the jigsaw missing before the decision can be locked in.

Writing in a Chinese newspaper commentary, Kam said there is just one statistic yet to be announced in MTR’s fare adjustment mechanism before this year’s fare adjustment can be announced.

He is referring to the transport nominal wage index which calculates the year-on-year percentage change of transport workers in December of the previous year, which is usually announced by the Census and Statistics Department by the end of March.

“But based on what I see, this year’s fare will probably remain unchanged based on the formula,” Kam wrote.

He added that in the following six years after the mechanism was reviewed in 2017, there were three years the formula came to a frozen fare, one year with a fare reduction and two years with increased fares.

“The mechanism struck a balance between the society’s economic situation and the business’ sustainability,” Kam said.

He also said the corporation’s core business -- rail operation -- is hardly profitable, as maintenance and asset renewal expenses will gradually increase over time.

“Therefore I am more focused on recurrent income, including business at stations and MTR shopping malls. Property development profits will of course give us a nice report card, but to go further, we need a strong recurrent revenue,” Kam said.

He added that MTR Corp is going to have one-off revenues, while there are also massive railroad investments coming in the next few years.

“Right in front of us are opportunities to open new development areas and communities for Hong Kong, and there will be challenges, the MTR Corp will be prepared and continue walking forward with all stakeholders,” Kam said.

Michael Shum