Following is a question by the Hon Frankie Yick and a written reply by the Secretary for Transport and Logistics, Mr Lam Sai-hung, in the Legislative Council today (January 18):
Question:
Some operators of non-rail public transport modes (operators) have relayed that with the continuous expansion of the railway network, their patronage has continued to drop while they are facing an incessant rise in operating costs. They hope that the Government will expedite the vetting and approval of the fare adjustment applications submitted by them to alleviate their financial difficulties. In this connection, will the Government inform this Council:
(1) of the respective time currently taken by the Government to process the fare adjustment applications of various types of non-rail public transport modes (including taxis, franchised buses, green minibuses and ferries/kaitos); whether it will formulate performance indicators in respect of the time for processing such applications, so as to avoid a lag effect on the levels of fare adjustments by the time when their applications are approved, resulting in the cumulative rates of fare increase failing to catch up with the cumulative inflation rate and the surges in fuel and insurance costs (the lag effect on fare adjustments), and causing operators the present predicament; if so, of the details; if not, the reasons for that;
(2) given the aforesaid lag effect on fare adjustments, and the fuel cost being one of the major costs for the operators with the changes in fuel prices being difficult to grasp, whether the Government will consider establishing a mechanism for regular fuel subsidies for non-rail public transport modes, under which the Government will provide fuel subsidies whenever the fuel cost is higher than a specified level; if so, of the details; if not, the reasons for that; and
(3) to ensure the financial viability of non-rail public transport modes, whether the Government will consider establishing a mechanism for regular annual fare adjustments for them, and abolishing the existing arrangement under which individual operators need to apply on their own for a fare adjustment according to their financial situations; if so, of the details; if not, the reasons for that?
Reply:
President,
My reply to the question raised by the Hon Frankie Yick is as follows:
(1) Upon receiving fare adjustment applications from non-rail public transport operators, the Government will conduct assessments according to the established mechanism or statutory requirements as soon as practicable, and then conduct consultation and seek approval as and when appropriate. When processing the applications, the Transport and Logistics Bureau and the Transport Department (TD) will take into consideration and balance a basket of factors, such as the financial and operational situations of the operators (including both fare and non-fare revenue, staff salaries, expenses on fuel and insurance), service performance, prevailing social and economic situation as well as public acceptability and affordability. In the process, the TD will make reference to the latest available data.
With regard to the established mechanism or statutory requirements, there are different procedures for the Government to follow in processing fare adjustment applications of different public transport modes. For franchised buses, franchised ferries and taxis, the Government will consult the Panel on Transport of the Legislative Council (LegCo) and the Transport Advisory Committee, before submitting the proposals to the Chief Executive in Council for consideration. Proposals for fare adjustment of franchised ferries and taxis also involve amendments to the relevant legislations and hence need to be introduced into the LegCo for vetting. As regards applications for adjustment to fares of individual route packages of green minibuses and licensed ferries, the TD will conduct local consultation on the proposals as appropriate before granting its approval in accordance with the established procedure.
We appreciate that timely processing of fare adjustment applications is vital to maintaining healthy operation situation of the relevant public transport operators. As mentioned above, the Government will process all applications received according to the established mechanism or statutory requirements as soon as practicable. In case further explanation and supplementary information are needed from the operator, the Government will also invite the operator to provide the requisite information at the earliest opportunity, with a view to completing the assessment in an expeditious manner. As the number of routes involved, the scope of information required, and the complexity of the assessment may vary for each application, and further information may be required from the operator, it is difficult to generalise the processing time required and it may not be appropriate to set rigid indicators in this respect.
(2) In the light of the impact of the COVID-19 pandemic on public transport operators, the Government introduced fuel subsidies in the first and sixth rounds of the Anti-Epidemic Fund (AEF). As at January 12, 2023, subsidies of about $1.55 billion have been approved and disbursed, while some applications under the sixth round of the AEF are still pending approval and disbursement. The fuel subsidy is a temporary measure for alleviating the operating difficulties facing the trade amidst the prolonged epidemic and the drop in patronage.
As the epidemic situation stabilises, the Government has been gradually relaxing the social distancing measures, and most public transport modes have seen a rebound in patronage. Together with the progressive, orderly and comprehensive resumption of travel between Hong Kong and the Mainland since January 8, we believe that the business of public transport operators will further recover. At this stage, we have no plan to provide regular fuel subsidy for non-rail public transport operators, but will continue to maintain close liaison with the operators on their operating situation.
We understand that fuel cost is one of the major operating costs for public transport operators. As mentioned above, the Government will take into account the latest available data of the operating costs, including the fuel costs, when assessing fare adjustment applications.
In order to relieve the financial burden of the public transport operators, the Government has also put in place a series of complementary and concessionary measures to alleviate the operating pressure of the trade.
These measures include provision of transport infrastructure, such as bus termini and public transport interchanges, exemption from diesel duty, exemption of government tunnel tolls for franchised buses and keeping the toll saved in dedicated fund accounts, maintenance of ferry piers by the Government, and provision of Special Helping Measures for outlying island ferry routes.
(3) Under the existing mechanisms and arrangements, operators may submit fare adjustment applications to the Government at a suitable opportunity having regard to their actual financial and operational situations. This arrangement is flexible and generally strikes a balance between maintaining effective public transport services and taking into account public affordability and acceptability. The Government has no plan to introduce a mechanism for regular annual fare adjustment for non-rail public transport modes at this stage.
Ends/Wednesday, January 18, 2023
Issued at HKT 11:10