24 June 2019
MTR chairman Frederick Ma insists that the fare increase is reasonable, adding that Octopus Card users will get a  3 percent rebate for at least six months. Photo: HKEJ
MTR chairman Frederick Ma insists that the fare increase is reasonable, adding that Octopus Card users will get a 3 percent rebate for at least six months. Photo: HKEJ

Lawmakers lash out at MTR over plan to raise fares by 3.14%

MTR Corp. announced that it will raise ticket prices again after freezing rates in the fiscal year ending this month, sparking criticism from some lawmakers who questioned the fairness of its decision.

Hong Kong’s sole railway operator said on Tuesday its fares will go up by 3.14 percent from June this year based on the current fare adjustment mechanism, the Hong Kong Economic Journal reports.

The announcement came after the government released earlier in the day the nominal wage index of the transportation sector, which was up 2.8 percent year in the fourth quarter of 2017 from a year ago.

The rate formula requires inputs of multiple variables, including the composite consumer price index (CCPI) and the nominal wage index of the transportation sector.

As the CCPI was up 1.7 percent in December from a year earlier, taking the measure for the entire year 1.5 percent higher than in 2016, MTR is allowed to increase fares by 1.65 percent for 2018-2019 using the formula.

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 3.14 percent.

To reduce the impact on commuters, MTR chairman Frederick Ma Si-hang said the company will offer a 3 percent rebate based on the fare adjustment mechanism to Octopus Card users for at least six months, totaling HK$200 million. Details will be announced later.

Calling the fare increase reasonable, Ma claimed that it will only be nominal for Octopus Card users since it can be offset by the rebate, which will keep prices basically unchanged.

For example, an Octopus Card user who takes the MTR from Causeway Bay to Central will have to pay HK$5.5 theoretically based on the price adjustment, up from HK$5.3 at the moment, but they will still be charged HK$5.3 because of the rebate, Ma said.

Asked why MTR is still raising fares despite the fact that its profit soared 64 percent last year to over HK$16.8 billion, Ma explained that HK$6 billion of that amount was property-related income and three-fourths of the rest will have to be turned over to the government as it belongs to the public.

Besides, Ma said the concessionary fares being offered to children and the elderly are out of MTR’s own pocket and the company also needs to reserve some of the profit for the purchase of new trains as well as repair and maintenance expenses.

Still, Democratic Party lawmaker Lam Cheuk-ting, who is the deputy chairman of the Legislative Council’s Panel on Transport, disapproved of the fare increase and asked MTR to adopt another fare freeze or at least leave out the 1.49 percent accumulated increase.

Criticizing MTR for having increased fares almost every year for the past few years and thus putting more financial burden on the public, lawmaker Michael Luk Chung-hung from the Hong Kong Federation of Trade Unions urged the government to revise the formula used to calculate the fare so as to make any adjustment more balanced.

Meanwhile, the Transport Advisory Committee on Tuesday discussed Hong Kong Tramways’ application submitted in August last year to raise its fares by 1.3 percent.

Larry Kwok Lam-kwong, who chairs the committee, said its members basically agreed with the proposed increase and the matter will be left to the Executive Council for further discussion.

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