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In the motion debate in this Council in January last year, on the subject of fare increases, I explained the criteria that the Administration adopts in considering and processing such applications. Let me briefly reiterate what these criteria are. We take into account -
(a)
the increase in operating costs since last year's adjustment;
(b)
efforts made to reduce costs and increase revenue;
(c)
the quantity and quality of service provided having regard to passenger demand and feedback;
(d)
future development plans and service improvement programmes;
(e)
forecast of future costs, revenue and return; and
(f) public affordability and acceptability including the impact on livelihood.
Honourable Members will recall that last year KMB submitted an application for a fare increase of 19.6%. The Administration scrutinised this application very carefully taking into account the factors I have just described. As a result the percentage increase sought was slashed and we found we could only recommend an increase of 12.9% which was ultimately approved.
KMB has been far more modest in its submissions this year. We have yet to process this application and I am not able to say to date what percentage increase the administration will recommend. We have well established procedures to deal with applications for fare increases. The Transport Panel of this Council is briefed by the company concerned - (and indeed KMB has already done this regarding its application this year); the Administration vets the application meticulously and decides on the rate of increase to be recommended. The Transport Advisory Committee is then consulted; and thereafter the recommendations are put to the Executive Council for approval.
To look at bus fare increases in percentage terms often results in an exaggeration of the real impact. The additional expenditure which passengers actually have to pay in monetary terms, and in perspective what KMB has now sought, works out at an average increase of only 30 cents per trip. And in this respect it should not be forgotten that almost all wage earners get annual adjustments in their pay..