C.S. 166
CONFIDENTIAL #2 機密
XCC(77)54
Copy No Page 10
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of the MTR should be to reduce over-crowding on existing transport modes. This would mean an improved standard of service, but the reduced numbers of passengers on each bus would subject bus fares to upward pressure. For these reasons a basic fare structure ranging from $1 to $2.50 (at 1975 prices) for a faster and more reliable service represents a reasonable differential over the fares for other forms of public transport.
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A 7% annual increase in fares, based on assumed inflation, was adopted for the MIS revenue calculations. Annex D to XCC(75)55 commented in respect of the financial strategy to be adopted for the MIS:
It is important to note here that the assumed rate of inflation is 7% per annum from mid-1975. All costs and revenues and the maximum loan availabilities are escalated at this rate unless otherwise specified.
The Corporation argues that to increase fares in line with general inflation is consistent with its obligation to act on commercial principles (section 13 of the MTRC Ordinance) and is necessary to fund existing loans which were raised on this premise. The Corporation believes that to hold down fares in a period during which they could otherwise have been increased (market conditions allowing) would unnecessarily extend the pay back period for loans and thus increase the interest charges.
(d) Reshaping Bus and PLB Services
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As a natural consequence of the extension, bus and PLB services will be modified in such a way as to complement and sup- plement it. It may also be expected that public transport feeder services will be introduced to link MTR Stations to passengers' origins and destinations. In due course, it will be necessary to se- cure Members' agreement to revised Schedules of routes and frequencies.
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The likely reduction in bus and PLB numbers over MTR routes will bring benefits to all road users, since the reduction in congestion will reduce the journey time of trips made by private motor cars, goods vehicles, buses and taxis.
(e) Interest
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The Corporation's estimate of medium-term interest rates of 81% - 9% in the 1980's is above rates that prevail today, but seem
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