Provisional Legislative Council
Panel on Transport

Kowloon Motor Bus Company (1933) Limited
Application for Fare Increase

Purpose

Kowloon Motor Bus Company (1933) Limited (KMB) has applied for a fare increase of 9.2% on all routes to take effect on 1 December 1997. This is equivalent to a weighted average fare increase of 9.5%. KMB last increased the fares of its cross harbour routes on 3 March 1996 and those of its local routes on 4 April 1996 by a weighted average of 3.6%.

KMB Franchised Bus Services

2. At present, KMB operates 380 franchised bus routes with a fleet of about 3,800 buses. It carries about 2,927,000 passengers daily and employs about 12,000 staff.

KMB's Performance

3. During the first half of 1997, KMB's bus availability rate, in terms of actual over scheduled bus allocation, improved from 101% in 1996 to 102%. The percentage of lost trips dropped from 3.5% in 1996 to 3.4% in the first half of 1997. The average number of complaints about its services handled by the Transport Complaints Unit decreased slightly from 111 cases per month in 1996 to 109 cases per month in the first half of 1997.

4. KMB currently operates eight permanent depots and eight temporary ones for bus parking and maintenance. The standard of maintenance is satisfactory. Up to now, seven of its eight permanent depots have been awarded the ISO 9002 certificates for bus maintenance. The number of bus accidents per million vehicle-km in the first half of 1997 remained at 3.6, same as that in 1996. In view of more frequent breakdowns and accidents in recent months, KMB has strengthened its bus maintenance and driver training programmes, which include safety seminars organised by the Transport Department and the Hong Kong Police Force.

5. KMB's Passenger Liaison Group met four times in 1996. The Company also attended the Traffic and Transport Committee meetings of the Provisional District Boards and user group meetings on request.

6. KMB operates a passenger hotline and a faxline for answering passengers?enquiries. The system was upgraded in December 1996 to incorporate a new telephone enquiry service, the Bus Arrival Timeline, in order to facilitate passengers in checking the arrival time of the next two buses on its newly introduced overnight bus routes. Following the successful trial of digital display panels for provision of route information and departure time at the Tsim Sha Tsui bus terminus, KMB plans to extend the erection of these panels to the Tsuen Wan MTR bus terminus in late 1997. Apart from distribution of district-based route map, the Company also publishes purpose-designed route map pamphlets upon launching of new services and major service changes. Information on KMB's services is also available on Internet.

7. In its Route Development Programme for the period 1998 to 2002, KMB plans to introduce 51 new routes, implement 556 items of service improvements and purchase 1,601 new buses to meet anticipated growth in demand. It has also proposed to cancel 26 routes and introduce 83 items to rationalise services which are under-utilised. The average age of KMB's fleet is 8.4 years at present. This will decrease slightly to 7.6 years at the end of 2002.

8. Overall, KMB provides a proper and efficient service. Its bus services and passenger amenities have, to a large extent, met public aspirations for a high quality bus service.

Application for a Fare Increase

9. Public transport fares need to be pitched at a level affordable to the public. At the same time, operators should be able to recover their operating costs and to obtain a reasonable return on their investment.

10. In considering this application, the Administration will take into account the following factors -

1. changes in operating costs and revenue since the last fare increase;
2. the quality and quantity of services provided having regard to passenger demand and feedback;
3. cost economy measures;
4. future development plans and service improvement programmes;
5. forecast of future costs, revenue and return;
6. public affordability and acceptability, including the impact on inflation and livelihood; and
7. the need to provide the Company with a reasonable rate of return from its operation of the public bus service.

11. The Administration is examining KMB's application.

Transport Bureau
October 1997