Legislators have criticised a 3.14 per cent increase in MTR fares set to be implemented in June, in light of a large profit reported by Hong Kong’s railway operator.
The MTR Corporation reported a net profit of HK$16.8 billion for 2017.
The MTR Corporation did not raise fares last year as the calculated adjustment rate – 1.49 per cent – was below the 1.5 per cent threshold to trigger a fare increase. However, the rate will be added to this year’s adjustment, providing a total fare increase of 3.14 per cent.
Lawmaker Michael Tien said increasing fares when such a large profit has been reported made the MTR Corporation look bad. He suggested that the company make rebates by subtracting them from fare increases.
“That means it should increase fares by 1.64 per cent. To me, 1.64 per cent is lower than 1.7 per cent inflation, so I think this would be reluctantly acceptable.”
Lawmaker Lam Cheuk-ting, who is the deputy chair of the legislature’s Panel on Transport, said the price-setting mechanism should be revised. He said that the corporation should not add the 1.49 per cent from last year. He added that the 3.14 per cent increase surpassed the rate of inflation, and was hard to accept.
He said the MTR’s profit should be factored into the price-setting mechanism.
“That means if the MTR has a certain increase in profit each year, it should adjust its increase accordingly.”
Frederick Ma Si-hang, chair of the MTR Corporation, said the company must distribute dividends to its shareholders, including 75 per cent to the government treasury, which he argued will make its way back to the public. He added that the company will use the profits to invest in expansion, new trains and repairs.
Ma said the company will give passengers using their Octopus cards a three per cent discount in the latter half of the year, which he said could offset the fare increase.
“Actually, we’ve already given big discounts to passengers. Everyone knows, children get discounts, even those who are 65 years or older – the two dollars they pay is partially paid for by the MTR – not by the government. So in terms of discounts, we are doing our best.”
The government and the MTR renewed the price-setting mechanism last year after a year-long review, but retained the formula it uses to set fares.
The formula calculates fare adjustments based on economic conditions and salary levels of the transportation sector, and is controversial for creating more fare increases than cuts.
Richard Tsoi, spokesperson for the Coalition to Monitor Public Transport and Utilities NGO, said there was a need to completely revamp the price-setting mechanism.
Tsoi said the percentage of profit that the MTR shares with residents was too small, and suggested creating rules to require the MTR to return ten percent of its profits to residents.