MTR Corp., Hong Kong’s railway operator, may raise ticket prices again after freezing rates in the year ending in March as it can do so under the current fare adjustment mechanism.
The formula of the mechanism requires inputs of multiple variables, including the composite consumer price index (CCPI) and the nominal wage index of the transportation sector.
The government announced on Tuesday that the CCPI for December 2017 rose by 1.7 percent from a year earlier, taking the measure for the entire year 1.5 percent higher than in 2016.
As the nominal wage index of the transportation sector was 2.9 percent in the third quarter last year, MTR is allowed to increase fares by 1.7 percent for fiscal 2018-2019 using the formula, hk01.com reports.
Including the 1.49 percent accumulated from the previous year, when the company was prevented from increasing fares as it did not exceed the threshold set at 1.5 percent, the total increase allowed is 3.2 percent.
This, however, is subject to change since the actual increase will depend on the nominal wage index of the transportation sector in the fourth quarter, which has yet to be released.
Based on a 3.2 percent increase, an Octopus card user who takes an MTR train from Tsuen Wan to Central would have to pay HK$14.7, up from HK$14.2 at the moment, unless the operator offers a 3 percent fare discount like it did last year.
The price for a trip from Tai Po to Mong Kok East would be HK9.3, up 30 cents.
Public reaction to the possible fare increases is mixed. Some commuters say they are acceptable while others say they are not justified by the quality of MTR’s service.
Civic Party lawmaker Jeremy Tam Man-ho, who is a member of the Legislative Council transport panel, urged the government to revise the fare adjustment formula, saying it is clearly flawed because MTR can raise ticket prices again after freezing rates for just one year.
The formula should be able to reflect profits earned by MTR through its property and leasing businesses so as to keep fares as stable as possible, Tam said.
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