Speech at Panel on Transport

Special Helping Measures for six major outlying island ferry routes for the next three-year licence period 2017-2020

Special Helping Measures

Mr CHAN Chun-ying noted that the proposed subsidy cap of reimbursing the vessel maintenance cost was $241 million whereas that for vessel related depreciation costs was $16 million. Besides, ferry operators could only reimburse half of the depreciation expense under SHM. He considered that the above arrangement would not be conducive to encouraging ferry operators to purchase new vessels and suggested the Administration consider combining the financial caps of these two reimbursement items. The purpose was to encourage ferry operators to purchase more new vessels which would lead to higher depreciation cost but lower maintenance cost.

Profit-sharing mechanism

Mr CHAN Chun-ying also considered that the profits should be shared with island residents or frequent commuters only and that fare concessions should be offered on weekdays only.

In response, STH explained that while oil price had dropped in recent months, other operating costs had been increasing. Since the profits earned in the second half of the licence period was not guaranteed, it would be more appropriate to share the profits with passengers through the offer of time-limited fare concessions instead of reducing the fares which would impose permanent effect on the faretables.

Measures to maintain the long-term financial viability of the six routes

Mr CHAN Chun-ying considered that instead of taking forward the Pier Proposal, the Administration could consider redeveloping the piers at islands and increasing the space for commercial activities. In addition, passengers should be allowed to enter the piers well in advance of the departure of ferries to encourage more commercial activities inside piers and hence help increase the rental income. The Administration noted his views.