PART II THE STAR FERRY FARE ISSUE
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(a) Higher operating costs due to wage and salary increases and higher maintenance costs of piers and vessels. Figures produced by the Com- pany's auditors showed that operating costs in 1965 were 23% higher than in 1964. This increase was largely attributable to the introduction of the service between Hong Kong Island and Hung Hom in June 1965 at Government's request.
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(b) The Company's estimates of passenger traffic growth showed that increased operating costs would not be compensated by an increase in revenue from the services.
(c) The end of the Company's concession in 1979 had necessitated the intro- duction of a more rapid rate of depreciation for new ferries and the decision to proceed with the construction of a cross harbour tunnel to be opened in about 1970 had introduced a larger element of risk into the Company's operations.
Public Opposition to Passenger Transport Fare Increases
45. Prior to the Company's application for an increase, a number of articles had appeared in part of the Chinese press drawing attention to rumours that dis- cussions were in progress on public transport fare increases which were to be justified on the pretext of increased operation costs. Prominence was given to the unfavourable reactions of certain civic leaders and some editorial comment was extremely critical. The assumption that any increase would be large seems to have been fairly general, e.g. 'How could a family of five mouths afford extra expenses of several tens of dollars a month?' (morning paper 15/9), and Govern- ment was urged by one paper to allay public fears of such an increase, described as a challenge to the public interest'.
46. Opposition to an increase in public transport fares took a number of forms. The most widely published appear to have been the following.
(a) Past profits and future growth potential
None of the commentators seems to have envisaged either a temporary pause or a permanent halt in the growth of passenger transport. This attitude is illustrated by one paper's statement 'Everyone knows that public transport companies have reaped and will continue to reap huge profits every year. The increase of their expenses has been more than offset by their increased income from the increasing number of passengers' (evening paper 14/9).
(b) Poor Service
Some of the comment stressed that the public considered the public transport services in general to be far from satisfactory and that the companies tended to show more concern for making a profit than for serving the public.