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NWFB and Citybus’s high-level bombardment of the lack of transparency in bus fare mechanism advocates annual fare adjustments based on objective data

2021-05-18T10:20:17.004Z

The epidemic has struck Hong Kong for more than a year, and Hong Kong's economy has been hit hard. Huida Transportation, which operates the New World First Bus and Citybus, announced earlier that the two buses had a pre-tax loss of 813 million yuan. Even after government subsidies, they still lost 262 million yuan. The two bus companies announced last Wednesday



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Author: Zheng Qiyuan

2021-05-17 08:00

Last update date: 2021-05-17 08:00

The epidemic has struck Hong Kong for more than a year, and Hong Kong's economy has been hit hard.

Huida Transportation, which operates the New World First Bus and Citybus, announced earlier that the two buses had a pre-tax loss of 813 million yuan. Even after government subsidies, they still lost 262 million yuan.

The two bus companies announced on Wednesday that they will freeze their wages for the second consecutive year for the purpose of reducing expenditure. Even if they increase their fares by 12% in stages starting last month, the disadvantage cannot be reversed.

In an interview with media such as "Hong Kong 01", Vice Chairman of Huida Transportation Zhong Zewen emphasized that the two buses still record tens of millions of yuan in losses every month after the epidemic has not been reversed and passenger traffic has not resumed. Although the financial situation can be maintained for a period of time, It is difficult to bear long-term losses.

Zhong Zewen pointed his finger at the current franchised bus fare adjustment mechanism. He believes that the authorities introduced a "basket of factors" to approve franchised bus fare increase applications since 2006. The mechanism is not transparent, and the time for each approval is calculated in years, making the bus company's operating conditions unclear. Can be improved in time.

He urged the authorities to reform the bus fare adjustment mechanism, such as referring to the MTR fare adjustment equation and using a simple mechanism directly driven by objective data to adjust fares every year.

The current franchised bus fare adjustment mechanism consists of the Chief Executive in conjunction with the executive meeting, based on the reasonable return rate of the bus company, public acceptance and affordability, revenue and return forecasts, and reference to the calculation results of the fare adjustment equation. Make a decision.

The last time the two bus companies submitted a fare increase application in August 2019, it has been extended to the beginning of the year and has been approved to increase the fare in stages by 12%.

Zhong Zewen pointed out that the current franchised bus fare adjustment mechanism was introduced in 2006 when Liu Xiudong became the Secretary of the Environment, Transport and Works.

Due to deflation in Hong Kong that year, in response to the public’s expectation of "price reduction", the authorities set up a fare adjustment equation. When a calculation result of minus 2% occurs, the Hong Kong government can initiate a price reduction.

However, different from the MTR’s "Fare Addition and Reduction Mechanism", franchised buses have to raise their fares, which must be proposed by the bus company and approved by the government and the Chief Executive in conjunction with the Executive Council based on a single factor. The result of the equation calculation is only one of them. Reference data.

Zhong Zewen said that he understands that the public is dissatisfied with the bus companies’ fare increase under the epidemic, but the two bus companies have rarely increased fares in the past. Citybus franchise 2’s airport line has never increased fares since it was put into service in 1996; the citybus franchise has been operating for nearly 10 years. Only increase the price three times.

He also pointed out that it took more than a year for the authorities to approve the price increase, and the approved price increase was only "catch up", and the losses recorded in the intermediate lag time could not be recovered.

[Interview with Zhong Zewen and other content:]

The management of NWFB and Citybus first recognizes that the unified fare of the two bus companies may become an obstacle to the increase of some fares

The current mechanism is not transparent

The Secretary for Transportation and Housing, Chen Fan, had "released the wind" earlier and would set up a constant mechanism to study the regular adjustment of bus fares every year or two to avoid a major increase in several years.

Zhong Zewen agreed that reform of the bus fare adjustment mechanism is necessary. If an annual inspection can be achieved, each adjustment will be milder, and it can also reflect changes in the bus industry's operation.

In addition to regular reviews, Chung Ze-man believes that if the MTR can be imitated by using objective data such as inflation rate and the transportation industry wage index to directly drive the fare equation as the basis for adjusting the fare, it will replace the existing guild’s approval based on a single factor. , Will further improve the transparency of franchised bus fare adjustments. "Every time the fare is adjusted in the past, even if the bus company did not know how to calculate the adjustment range approved by the government, I have talked about how to approve it. The detailed reasons for this range."

The two bus companies submit proposals to the Hong Kong government to reform the fare mechanism

However, how to design the fare equation and which data to use? Chung believes that the mechanism has a far-reaching impact and also affects the general public. "The mechanism of the MTR makes people angry." It must be discussed carefully.

The mechanism also involves all franchised bus operators, and the Government also needs to discuss with other bus companies.

The current bus fare mechanism is reviewed approximately every three years, and the last time it was reviewed in 2019.

Zhong said that the two bus companies will submit proposals to the Hong Kong government to reform the bus fare mechanism.

When asked about the benefits of adjusting the fare each year to passengers, Zhong emphasized that bus operation is always risky, and the operator does not necessarily make money. "We don’t have the right to decide the fare. If the fare increase is not enough, the service will continue to be provided. , A company can click sustain (support)... Many employees have to continue to pay, and to make colleagues have happy life, they have to add labor, so if you increase the price, you have to add labor. Click to catch inflation.”

Many employees have to continue to pay, and they have to add labor to their colleagues to have a happy life. Don't increase the price and increase the labor to catch up with inflation.

Zhong Zewen, Vice Chairman of Huida Transportation

Advocate the establishment of fare stability and basically replace the feedback arrangement

In the current franchised bus fare mechanism, there is a "return to passengers arrangement" mechanism. When the return on average net value of the bus company's fixed assets exceeds 8.7%, half of the extra profit needs to be paid back to the passengers in the form of fare concessions.

Zhong believes that there is room for adjustments in the relevant arrangements. He suggests that the authorities set up a separate "Bus Fare Stabilization Fund" to allow the extra profits used by bus companies to provide feedback to the fund to ease the pressure of bus companies to increase their fares.

For example, he pointed out that fuel costs are an important operating expense for buses. When fuel prices fluctuate, the relevant funds can reduce the impact.

However, he admitted that under the current operating conditions of the two buses, it is quite difficult for the two buses to "make a sudden profit" and allocate extra profits to the fund.

But he added that if there is a fare mechanism that can improve bus operations, and whether the rate of return is maintained at 8.7%, there is room for discussion, but it must reach a reasonable level agreed by shareholders.

Zhong Xu said that the new bus and the city bus are relatively "younger" companies than the KMB. The time to build a fleet to buy buses is more concentrated, and the fleet renewal cycle is uneven, which makes the calculation of bus depreciation more volatile.

Before each car swap cycle, when calculating the rate of return, it is easy to make people feel "making money", but it is not actually "making more money."

He pointed out that if the problem is handled by the bus company alone, I believe it will take several bus replacement cycles to straighten out the problem. Taking the life of each bus from 17 to 18 years, it will take a long time to solve it.

The management of NWFB and Citybus first recognizes that the unified fare of the two bus companies may become an obstacle to the increase of some fares

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NWFB and Citybus Frozen Salaries for the second consecutive year and lost 262 million last year: 12% increase in fare failed to reverse the disadvantage

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NWFB and Citybus lost 90% of passengers at airports and land ports in a three-month eclipse of 221 million yuan

NWFB and Citybus’s fare increase is still eroding, but it is not ruled out that it will also integrate the nearly half of the Hong Kong Island line to expand the territory of Kowloon New Territories

Bus fare increase|NWFB and Citybus will increase the fare by 8.5% from April 4th to see the new fare of each route in one article

NWFB and Citybus lay off more staff during the Lantern Festival and speculate in the logistics department. Parent company Huida Transportation cuts 84 positions

01News

NWFB Increase Fare Increase Citybus Fare Increase NWFB Citybus Transportation and Housing Bureau

Source: hk1

All news articles on 2021-05-18

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