The MTR Corporation (MTRC) will keep its existing fare setting formula, despite strong public demand for an overhaul after seven straight years of fare hikes.
However, the rail operator will lower the fare increase by 0.6 percentage point and apply a 10 percent discount on the reduced rate for this year to ease the burden on passengers, the Hong Kong Economic Journal reports.
Passengers will also receive a 3 percent rebate on fares for every Octopus trip for at least six months of each of the coming six years.
The new scheme will replace the existing 10 percent discount for every second trip.
The MTRC said it will also roll out a new discount of 30 HK cents for commuters switching between the MTR network and the green minibus routes operated by over 160 operators, starting from the second quarter of 2018.
These concessions will translate to a loss of HK$587 million from the company’s income for the 2017/18 financial year, the MTRC said.
The Executive Council has approved a recommendation that the existing price mechanism for MTR fares be extended for another six years from June 2017, before another review is conducted.
Secretary for Transport and Housing Anthony Cheung Bing-leung said the government has explored different ways to ease passengers’ burden and broaden the base of beneficiaries of the MTRC’s concessionary measures.
Cheung said the new measures will benefit five million passengers every day.
MTRC chairman Frederick Ma said the rail operator has listened to the views and suggestions of various parties, and the solutions arrived at are meant to strike a balance among the needs of the different stakeholders.
Legislator Michael Tien Puk-sun, chairman of the Legislative Council’s transport panel, said he was pleasantly surprised by the outcome of the review.
Tien said he expected the MTRC to hike fares by 1.6 percent next year, but with the 0.6 percentage point discount, the rate of increase would be under 1.5 percent.
Should the increase in the median monthly household income be under 3.3 percent, the fares would have to be frozen, Tien said.
Lawmaker Lam Cheuk-ting, a member of the Legco transport panel, said the results of the review were disappointing.
Lam said the rail operator only gave out small favors, while insisting on raising fares every year despite reporting more than HK$10 billion in annual profits.
The Civic Party said the concessions and rebates are more like marketing tools to increase sales. The party is urging the government to set up a fare stabilization fund to come from the proceeds of dividends from shareholdings of the rail operator.
The government, which holds a 75 percent stake in the MTRC, was forced to conduct a review of the fare setting mechanism one year ahead of schedule amid growing public clamor for lower fares.
[Chinese version 中文版]
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