Speech at Panel on Transport

MTR fare adjustment for 2018

Fare concessions and promotional schemes

Mr CHAN Chun-ying appreciated MTRCL’s increase in the provision for fare concessions under the Profit Sharing Mechanism (“PSM”) by raising the upper limit for the profits counted from the original $13 billion to $15 billion after the 2nd FAM review. He considered that, since MTRCL would share more of its yearly underlying business profits (including profits from property development) with passengers under PSM, this arrangement could better reflect the correlation between MTRCL’s profitability and the implementation of FAM.

In response, CD/MTRCL said that with the 3% Rebate via Octopus for six months in the second half of 2018, there would unlikely be any actual fare increase for Octopus users in 2018. MTRCL would take account of Mr Michael TIEN’s views when considering the fare promotions for Monthly Pass Extras and MTR City Saver users so that they could enjoy similar fare concessions as Octopus users.

Service Performance Arrangement

Mr CHAN Chun-ying noted that the maximum amount per incident of serious service disruption to be set aside for fare concession had been increased from $15 million to $25 million. As service disruption incident lasting for more than eight hours was rather rare, it was rather unlikely that MTRCL would be penalized the maximum amount. Mr CHAN suggested that, in order to achieve the intended deterrent effect, the amount to be set aside for fare concession per incident of train service disruption for the various shorter durations (e.g. that for more than one hour and less than or equal to two hours) should be increased.

In response, USTH said that the Administration considered the existing level of penalty per incident of train service disruption under SPA appropriate. While MTRCL should be held accountable for serious service disruptions, heavier penalties might put undue pressure on MTRCL’s frontline staff, who might be tempted or pressed to rush their repair works, thereby putting railway safety at risk. Notwithstanding this, he said that Mr CHAN Chun-ying’s views expressed above could be further considered in future FAM reviews.