XN000022-1994-05-31 — Page 2

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TUESDAY, MAY 31, 1994

TAC ENDORSES CMB FARE INCREASE

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THE TRANSPORT ADVISORY COMMITTEE TODAY (TUESDAY) ENDORSED THE ADMINISTRATION'S RECOMMENDATION TO GIVE CHINA MOTOR BUS (CMB) A FARE INCREASE BY A WEIGHTED AVERAGE OF 9.8 PER CENT IN JULY SUBSTANTIALLY LOWER THAN THE 19.1 PER CENT SOUGHT BY THE COMPANY.

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EXCLUDING THE INCREASE FOR CROSS-HARBOUR ROUTES WHICH WAS INTRODUCED ON APRIL 1 TOGETHER WITH THE FARE RISE FOR KOWLOON MOTOR BUS, CMB'S FARES FOR HONG KONG ISLAND ROUTES WOULD ONLY GO UP

BY A WEIGHTED AVERAGE OF 5.6 PER CENT.

THE PROPOSED FARE RISE WILL MEAN THAT ABOUT 96 PER CENT OF THE PASSENGERS ON 34 MAIN ROUTES ON HONG KONG ISLAND WILL ONLY PAY 10 то 20 CENTS MORE PER TRIP.

FARES FOR OTHER ROUTES OF LOWER FREQUENCY AND PATRONAGE WILL GO UP BY 20 TO 30 CENTS, WHILE FARES FOR 15 RECREATIONAL ROUTES WILL RISE BETWEEN 20 CENTS TO $1.

IT IS ALSO RECOMMENDED THAT THE FARE DIFFERENTIAL BETWEEN AIR- CONDITIONED AND NON-AIR-CONDITIONED SERVICES SHOULD BE REDUCED FROM 46 PER CENT TO 41 PER CENT.

THE PROPOSED FARE RISE HAS A NEGLIGIBLE IMPACT ON THE CONSUMERS PRICE INDEX (A) A MERE 0.03 PER CENT.

CMB HAS AGREED TO EXTEND ITS EXISTING ELDERLY CONCESSIONARY FARE SCHEME TO ALL ROUTES ON HONG KONG ISLAND ON A FULL DAY BASIS WHEN THE NEW FARES BECOME EFFECTIVE. BUT, THE CONCESSIONARY FARE WOULD NOT BE APPLICABLE TO CROSS-HARBOUR ROUTES.

THE ELDERLY CONCESSIONARY FARE SCHEME IS ENTIRELY VOLUNTARY AND IT IS LEFT TO THE INITIATIVE OF INDIVIDUAL TRANSPORT OPERATORS, TAKING ACCOUNT OF THEIR FINANCIAL POSITION.

IN CONSIDERING THE FARE INCREASE APPLICATION, MEMBERS NOTED THAT WITH HIGHER STAFF AND MAINTENANCE COST AND LITTLE PROSPECT FOR PATRONAGE INCREASE, CMB'S PROFIT WILL FALL TO A VERY LOW LEVEL IN 1994/95 IF FARES ON HONG KONG ISLAND ROUTES ARE TO REMAIN AT EXISTING LEVEL.

A MODEST FARE INCREASE WILL ENABLE CMB TO ACHIEVE A REASONABLE RETURN FOR IT TO CONTINUE ITS SERVICE IMPROVEMENT PROGRAMME AND TO REMAIN REASONABLY COMPETITIVE.

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MEMBERS NOTED THAT SINCE THE REDUCTION OF 26 ROUTES IN SEPTEMBER LAST YEAR, CMB HAD MADR SOME IMPROVEMENTS IN PERFORMANCE, SUCH AS A HIGHER BUS TURNOUT RATE AND THE ESTABLISHMENT OF PASSENGERS LIAISON GROUPS.

THE COMMITTEE ALSO RECEIVED TODAY CMB'S FIVE-YEAR FORWARD PLAN AND NOTED THAT CMB WILL CONTINUE TO EXPAND ITS SERVICES.

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