LegCo Panel on Transport Toll Levels For The Lantau Link

PURPOSE

This paper informs Members of the proposed toll levels for the Lantau Link and the additional charges to be levied on taxi passengers for using the Lantau Link.

BACKGROUND

2. The Tsing Ma Control Area (TMCA) is an integrated expressway system linking the new Airport to Kowloon Peninsula and the North West New Territories. It comprises the Kwai Chung Viaduct, Rambler Channel Bridge, Cheung Ching Tunnel, Ting Kau Bridge, the Lantau Link (consisting of Tsing Ma Bridge, Ma Wan Viaduct, and Kap Shui Mun Bridge), and part of the North Lantau Expressway (up to Yam O Interchange). The TMCA has a total length of 17 km and its total construction cost is $21 billion in money of the day (MOD) prices. A plan showing the extent of the TMCA is at Annex C.

3. The TMCA is scheduled for opening on 21 May 1997. The management, operation, and maintenance (MOM) of the TMCA will be contracted out to a private operator. Government will formally award the MOM Contract to the operator following determination of the toll schedule.

4. The toll schedule for the Lantau Link will be submitted as subsidiary legislation under Section 27 of the Tsing Ma Control Area Ordinance to the Governor in Council for approval and this will be subject to negative vetting by the Legislative Council. Schedule 5 to the Road Traffic (Public Service Vehicles) Regulations will have to be revised by the Governor in Council to enable taxi drivers to charge passengers an additional fare of $60 for using the Lantau Link and this will also be subject to negative vetting by the Legislative Council.

5. The Transport Advisory Committee (TAC) endorsed at its meeting on 28 January 1997 the following recommendations:–

  1. differential tolls be charged on different types of vehicles;
  2. the toll schedule as set out in Annex A be adopted; and
  3. taxi passengers crossing the Lantau Link in both directions be charged an additional fare equivalent to two times the toll for taxis.

USER–PAYS PRINCIPLE

6. It is Government’s established policy that the "user-pays" principle should apply in respect of capital-intensive facilities such as Government tunnels. This principle aims to recover the full cost of providing, operating and maintaining the facilities. It is equitable in that the financial burden is shifted away from general taxation borne by taxpayers to users of facilities who derive direct benefits from the facilities.

DIFFERENTIAL TOLLS

7. Flat tolls are currently imposed in all Government toll tunnels while differential tolls are charged in Build, Operate, and Transfer (BOT) private tunnels. We propose that differential tolls be levied for the Lantau Link for the following reasons:–

  1. differential tolls reflect the different degrees of usage of road space and wear and tear caused by different types of vehicles; and
  2. differential tolls facilitate the accomplishment of certain traffic management objectives; for example, Government may encourage the use of public transport by imposing a higher toll on private cars.

Relativity Between Different Classes of Vehicles

8. In determining the relativity between different classes of vehicles for the Lantau Link, the following factors are taken into account:–

  1. the relative space occupied by different vehicles;
  2. the relative wear and tear caused to the Lantau Link by different vehicles;
  3. traffic management objective of encouraging the use of public transport; and
  4. the Lantau Link being the only route linking the new Airport to Kowloon and the New Territories.

Reference is also made to the toll schedules of the five BOT tunnels, namely the Western Harbour Crossing, Eastern Harbour Crossing, Tate’s Cairn Tunnel, Cross Harbour Tunnel and Route 3 (Country Park Section)(CPS). Furthermore, since the toll collection system at the Lantau Toll Plaza does not cater for the collection of tolls on the basis of the number of axles (the installation of axle counters would cost about $11 million) and since under the one-way toll collection arrangement when a container vehicle enters and leaves Lantau with a different number of axles, there could be argument over the toll to be collected, a class of "articulated vehicle" is introduced to replace toll collection on the basis of the number of axles. The proposed relativity between different classes of vehicles for the Lantau Link, as compared with those for the five BOT tunnels, are set out in Annex B.

PRINCIPLES FOR TOLL DETERMINATION

(I) Public Acceptability

9. In considering the proposed toll levels, we have examined their acceptability from the point of view of not only travellers, but also airport employees and residents of the Tung Chung New Town and concluded that they should be acceptable. It should be noted that:–

  1. the tolls of $30 for private cars and taxis, $15 for motorcycles, $40 for private and public light bus, $40 for single-decked bus and $55 for double-decked bus are the same as those for the Western Harbour Crossing;
  2. the tolls of $40 for light goods vehicles, $45 for medium goods vehicles and $75 for heavy goods vehicles are lower than those for the Western Harbour Crossing. This would be welcomed by the freight transport industry; and
  3. a class of "articulated vehicles" at $80 is introduced to replace the class with tolls collected on the basis of number of axles, which by comparison would result in tolls ranging from $120 to $180 for a container vehicle. This rate plus the avoidance of arguments due to different number of axles on entering and leaving the Lantau Link should also be welcomed by the freight transport industry.

10. There are public transport services for those who do not use private cars and taxis. In mid-1997, there will be three bus services in the daytime running between the urban area and Tung Chung new town, and one bus service at night-time. Three shuttle bus services will operate between Tung Chung new town and the new Airport. By mid-1998, the bus network will be expanded to seven bus services in the daytime and four at night-time. The shuttle bus services will increase to six. There will also be six direct airbus services between the urban area and the new Airport. The Airport Railway will be opened in mid-1998 and North Lantau will also be served by the Lantau Line.

(II) Return on Investment

11. The TMCA, like other Government utilities, is wholly financed by public funds, i.e. resources belonging to the whole community. The community thus becomes the shareholder of the investments and we manage them on the community’s behalf. Not only has the community a right to expect a reasonable return on its investments, but there is a need for us to ensure that the infrastructures are managed in a proper, prudent and business-like manner.

12. The nominal target rate of return for Government’s investment in toll tunnel projects is 12% on Average Net Fixed Assets (ANFA). If the toll schedule set out in Annex A is adopted and if future toll increases are in line with inflation, the average rates of return on ANFA over a period of 20 years will be 13.28% at revision interval of four years and 12.34% at an interval of six years. This would give a nominal internal rate of return over the life of the project of 11.25% at revision interval of every four years and 11.19% at revision interval of every six years. This is consistent with the expected range of returns from other major public infrastructural projects, such as the New Airport and the Airport Railway, and demonstrates that the overall toll levels are reasonable.

ONE-WAY TOLL COLLECTION ARRANGEMENT

13. Although two-way toll collection arrangement is currently adopted at all toll-tunnels in Hong Kong and the design of the Lantau Link allows for collection of tolls in both directions, we consider that one-way toll collection should be adopted for the Lantau Link until an alternative route is available. Drivers will be required to pay double the amount of the appropriate toll when leaving Lantau, but nothing on entering. This arrangement would make it more convenient for motorists. It would improve traffic flow in the airport bound direction and should be welcomed particularly by those catching flights. Furthermore, it will bring about manpower savings of $13.6 million over a 4-year period. This would far outweigh the costs needed to reactivate the dormant toll collection system (estimated to be $0.5 million) when an alternative route is constructed in future and two way toll collection is re-instated.

CHARGE FOR TAXI PASSENGERS

14. Since the Lantau Link provides the only vehicular access to Lantau, we recommend that taxi passengers using the Lantau Link should pay an additional fare of $60; i.e. two times the base toll, irrespective of the direction of travel. This would encourage supply of taxis as the taxi drivers would never be out of pocket in relation to the Lantau Link toll.

15. As a one-way toll collection system is to be adopted for the Lantau Link, the proposed arrangement will be widely publicised in information materials for the visitors to Hong Kong, at major taxi stands, and inside taxis so as to avoid any misunderstanding and disputes between taxi drivers and passengers.

16. The proposed arrangement for taxi passengers has been made known to the trade, LegCo members, and the public during consultations on the recommendations of the Transport Study for the New Airport. The trade have welcomed the proposal. No adverse comment has been received from LegCo members and the public.

Transport Branch
Government Secretariat

TBCR 65/5/581/87
14 February 1997

Last Updated on 21 August 1998