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Monday, March 27, 2017, 19:02

Hong Kong: MTR fares frozen for first time in 8 years

By chinadailyasia.com

Hong Kong: MTR fares frozen for first time in 8 years
In this on Feb 1, 2010 photo, a Mass Transit Rail (MTR) network metro train moves along an outdoor section of track in Hong Kong. (Mike Clarke / AFP)
HONG KONG – The city’s major train operator MTR Corporation (MTRC) says fares will be frozen after the Fare Adjustment Mechanism (FAM) failed to reach its minimum hike of 1.5 percent.

The last time fares were frozen was in 2009 when the city’s two train operators merged into one – MTRC

This is the first such move by the operator after seven years of consecutive fare hikes – adding up to a more than 25 percent increase since 2010.

The government’s Quarterly Report of Wage and Payroll Statistics, released on Monday, showed that the wage index for the transport industry increased by just 3.3 percent. This helped lead to a fare adjustment under the mechanism of 1.49 percent.

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That came after an earlier agreement between the government – the biggest shareholder of the rail operator – and the company’s board to give an extra 10-percent discount on the percentage of the hike calculated based on the FAM.

But the 1.49-percent increase will be factored in next year’s ticket prices when they are slated to be adjusted again.

The last time fares were frozen was in 2009 when the city’s two train operators merged into one – MTRC. The FAM was introduced then as a tool to review ticket prices once a year.

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The mechanism – frequently a cause of dispute – is anticipated to eat into MTRC’s profits. The corporation has been raising ticket prices despite securing sizable profits every year.

Instead, this year – as a bargaining ploy to ease public discontent – the rail operator agreed to roll out a series of measures to rebate its passengers, including an extra 3 percent discount on the ticket price for at least half a year for the coming six years. But this, in fact, turned out to be less beneficial to the public than a previous promotion package giving a 10 percent discount for a second ride.

ALSO READ : MTR announces 3% Octopus rebate

Chief Executive-elect Carrie Lam Cheng Yuet-ngor, in her election manifesto, promised to research ways to use the dividends handed out by the rail operator – especially lowering long-haul passengers’ commute expenditure.

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