XN000022-1996-03-06 — Page 94

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I fully share the Honourable Paul Cheng's views on the dangers of politicising such cases.

Mr President, the Administration's fundamental policy on public transport is that all such services should be provided by the private sector without any subsidy. This formula has served Hong Kong well and we risk changing this at our peril. There have been many debates on this subject. The arguments and counter-arguments have been rehearsed over and over again and are well documented in the Hansard. Likewise Members are fully aware of the consultative process and the criteria which the Administration has adopted in processing applications for fare increases. There is no need for me to reiterate these points again to-day. Instead, let me focus on the basic facts pertaining to the present application from Star Ferry.

At this juncture, let me particularly thanks the Honourable Miriam Lau and the Honourable Chan Kam-lam for so clearly expressing the views of the Liberal party and the DAB respectively and so convincingly demonstrating why the fare increase sought is totally justify.

Let me now trying to echo some of these points and explain why the Government likewise believes that the Star Ferry application merit full support.

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First, the Company's undertaking its commitment not to seek another fare increase in 1995 was subject to the caveat that its profits would remain at more or less the same level as then forecast. As the Honourable Selina Chow and the Honourable Miriam Lau have pointed out, there can be no misunderstanding since it was explicitly stated in the Star Ferry's letter dated 7 December 1994 to which had been circulate to Members of this Council. Although the Company's forecast of its financial performance has not been accurate, the actual position to-day is that its audited accounts show that it made but a very small profit in 1994 but incurred a loss of $4.79 million in 1995. The Company has not therefore reneged on any promise in seeking an adjustment in fares now.

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Second, the amount of the fare increase although this appears to be excessive in percentage terms, the real impact is better described and understood in monetary sums. About 90% of the 96,000 daily passengers will pay but 20 to 30 cents extra per trip. This is minimal and affordable. Senior citizens, comprising 6% of Star Ferry's commuters, will continue to enjoy free rides. It is also worth pointing out that there has been no protest from commuters and no adverse editorial comment on the proposed fare increase. Indeed, even with this increase, Star Ferry will still provide the cheapest public transport mode for cross-harbour services. I am glad that the survey undertaken by the DAB and I thank them for their initiative as re-confirm the public acceptability for the fare increase now sought.