TNAG-1060-FCO40-1310-Mass-Transit-Railway-in-Hong-Kong-1981 — Page 159

CONFIDENTIAL

For information

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RECEIVES AT REGISTRY NO. 51

07 APR 1981

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PEGISTRY

THE

PA

NOTE FOR EXECUTIVE COUNCIL

MASS TRANSIT RAILWAY CORPORATION ·

REVIEW OF FARES

Introduction

Under section 6 of its Ordinance (Chapter 270), the Mass Transit Railway Corporation (MTRC) has the power to determine the fares payable by its passengers. Under section 3 of the same Ordinance, the Corporation, when operating the railway, is required to pay regard to the reasonable requirements of the public transport system of Hong Kong. With this latter consideration in view, Members were informed in May 1979, vide memorandum XCC(79)45, of the decision reached by the Corporation's Board of Directors regarding the initial MTR fares for 1979 and 1980. Members were also informed that the MTRC's Board envisaged a further fare review at the end of 1980 to take account of cost increases during 1979 and 1980.

Fare Review by the MTRC

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The MTRC has now completed this review and its Board of Directors has decided on a revised fare structure, involving an increase of 20% on all single ride journeys, to give new fares of $1.20, $1.70, $2.20, $2.70 and $3.20 instead of $1.00, $1.50, $2.00, $2.50, and $3.00 respectively. At the same time, however, cheaper fares will be offered in off-peak periods to passengers who purchase stored value tickets. These lower fares would be $1.00, $1.50, $1.90, $2.40 and $2.80 respectively, which would give discounts of between 20¢ and 40¢ from the revised single ride fares. It is emphasised that these off peak discounts will only be available to passengers using stored value tickets.

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The case for an increase in fares, its effect on MTR patronage and revenue and certain other advantages available to passengers purchasing stored value tickets are covered more fully in the paper (at Annex) which has been prepared by the Chairman of the MTRC. The Chairman's paper also discusses the questions of feeder bus services and the deployment of buses away from routes paralleling the MTR.

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The Corporation estimates that, in order to enable it to become profitable in 1983, a total daily patronage on the Modified Initial System (MIS) and the Tsuen Wan Extension (TWE) of about 1.8 million trips would be required at an average fare of $2.50 (1983 prices), compared with a current daily patronage of about 0.55 million on the MIS at an average fare of $1.90 (1981 prices). It states its intention of reaching the average level of $2.50 in 1983 by small increases in fares in the interm.

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