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Motion debate on HYF fare increase
Following is the speech by the Secretary for Transport, Mr Haider Barma, in the motion debate on the Ferry Services (Hongkong and Yaumati Ferry Company Limited)(Determination of Fares)(Amendment) Order 1995 in the Legislative Council today (Wednesday):
Mr President,
The Hongkong and Yaumati Ferry Company Limited is losing money. Their reasons for seeking a fare increase are more than justified. What are the Democrats up to? Do they understand the facts? Mr President, these statements and questions have been made and put to me by some Members of this Council, by the media and by many others.
I must say I am equally puzzled by the stark stance taken by the Democrats on this occasion. Their intentions may well be good and they may believe that they are protecting the public interest by seeking to reject HYF's application for a fare increase. But this does not detract from the fact that this time they have got it totally wrong. A freeze on the existing fare levels may be a populist move and may appear to be defensible as an anti-inflationary measure but in reality such a move is short-sighted because the consequences would be quite disastrous: I say this because it must be recognised that transport operators cannot sustain a loss-making business. Providing public transport is not a charity if LegCo vetoes a fare increase application for a franchised transport operator who is losing money, this would send out a very damaging signal. Which company would then be prepared to invest and come out to run transport services?
Let me briefly outline the facts. HYF has been losing money for the past two years, despite an increase in fares in July 1994. Why? Because operating costs have increased substantially and patronage has continued to decline from 75 million passengers in 1985 to 50 million in 1990 and less than 35 million in 1995. As a result HYF is in a serious predicament: its ferry services are heavily loss-making. In 1995, the Company had an estimated deficit of HK$72 million. The forecast operating losses for 1996 and 1997 are even more astronomical. We have explained the facts very clearly to the LegCo Sub-Committee set up to consider this fare increase application. What is more, with HYF's agreement but in confidence, because of the need to comply with stock exchange rules, we have provided full cashflow projections to Members. These figures have been lodged with the LegCo Secretariat.