TNAG-1513-FCO40-2071-Hong-Kong-Mass-Transit-Railway-Corporation-1986 — Page 28

For information

(18.3.86)

CONFIDENTIAL

XCCI (86)152 Copy No...

3.1

NOTE FOR EXECUTIVE COUNCIL

MASS TRANSIT RAILWAY FARES FOR 1986

INTRODUCTION

Under section 6 of the Mass Transit Railway Corporation (MTRC) Ordinance (Chapter 270), the Corporation has the power to determine the fares payable by its passengers. The purpose of this note is to inform Members of the decision of the Board of Directors of the MTRC regarding revisions to the existing fares for 1986. The note also outlines the factors MTRC took into consideration in arriving at this decision.

BACKGROUND

MTR Fare Policy

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The MTRC is obligated under its Ordinance to "ensure as far as possible that, taking one year with another its revenue is at least sufficient to meet its expenditure" and also to operate the MTR system "having regard to the reasonable requirements of the public transport

transport system of Hong Kong". The MTRC believes these criteria can best be attained by a continuing policy of making modest annual fare increases rather than larger increases at less frequent

intervals.

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MTR fares were last revised on 31 May 1985 coincident with the opening of the Island Line. Following implementation of this review, 25% of

25% of passengers

passengers faced an increase in fares, 73% had no change and 2% benefited from a reduction. The combined effect of the Island Line opening and the whole 1985 fare package was to increase the average fare on the MTR (including the Government's reimbursement for student travel) from $2.78 to $2.90 or by about 4%.

MTRC Financial Position

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Weekday patronage on the Modified Initial System in early 1982 was 720,000. This increased to 1.18m by the end of 1982 following the opening of the Tsuen Wan Line and stayed virtually unchanged until 1985 when the Island Line came into operation. The existing Tsuen Wan, Kwun Tong and Island lines now carry about 1.4m passengers on weekdays. The actual annual patronage and fare revenue for 1982 to 1985 are summarized below :-

MKK

KK 173/1 RECEIVED IN REGISTRY

20 MAR 1986

PA

REGISTRY

Action Taken:

IND

CONFIDENTIAL