TNAG-0639-FCO40-787-Construction-of-underground-railway-system-in-Hong-Kong-(Mas-1978 — Page 54

C.S. 166

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XCC(75)55

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However, the Provisional Authority decided that it would be prudent to examine the revenue estimates again on the basis of the most up to date information available. In this respect it was fortunate that the Government was in the process of carrying out a Compre- hensive Transport Study (CTS) and that, therefore, working procedures which could assist in the exercise were readily available. The CTS is concentrating particularly on the long-term future (1991). However, for the purposes of the MIS, an examination has now been made of the 1981 and 1986 situations under a number of assumptions.

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Although not all the results of the CTS are yet available, enough information has been produced to confirm the broad conclusions of earlier transport studies in so far as the extent of the future trans- port problem generally is concerned. Furthermore, the latest revenue calculations for the MIS are not out of line with those obtained from the study referred to in paragraph 28 above.

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Briefly, the expectation is that the MIS will carry in ex- cess of one million passengers per day in 1986. It would also account for a significant proportion (20%) of the total daily public transport passenger mileage in Hong Kong as a whole, thus relieving traffic congestion in the dense corridor along which it passes. It is also significant that a large increase in demand for public transport has been indicated as taking place in areas away from the MIS corridor (e. g. in and to/from the New Territories and to/from the south side of Hong Kong Island) and this the existing forms of public transport (buses and PLBs) will naturally be required to meet.

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The fare structure to be adopted is a matter which can only be decided shortly before the System begins to operate. It had been concluded previously that, at 1974 prices, the MIS would be viable if the fare charged were to be a minimum of $1 plus 50 cents addition for each subsequent fare stage. The latest traffic forecasts, however, suggest that the number of passengers to be carried will be slightly higher than that assumed in previous calculations and that the fare could be slightly lower (at, say, an average per passenger of something below $1, 25). All in all, from this latest examination, it has been concluded that there is no reason to depart from the previous revenue estimates which indicated that sufficient revenue would be generated to make the System viable, There can, of course, be no absolute certainty in forecasting and the results will always depend on the assumption made but, over and above the revenue to be pro- duced from fares and advertising on the Railway, there is a contingency element in the form of revenue available from property development (see paragraphs 34-37).

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