Provisional Legislative Council
Panel on Transport

China Motor Bus Company Limited
Application for Fare Increase

Purpose

China Motor Bus Company Limited (CMB) has applied for a weighted average fare increase of 11% to take effect on 16 February 1997. CMB last increased the fares of its cross harbour and local routes on 3 March 1996 by a weighted average of 10.4%.

CMB Franchised Bus Services

2. At present, CMB operates 124 franchised bus routes with a fleet of about 850 buses. It carries about 490,000 passengers daily and employs about 2,400 staff.

CMB's Performance

3. During the first half of 1997, CMB's bus availability rate, in terms of actual over scheduled bus allocation, increased from 108% in 1996 to 113%. The percentage of lost trips dropped from 4.6% in 1996 to 3.0% in the first half of 1997. The average number of complaints about its services handled by the Transport Complaints Unit decreased from 57 cases per month in 1996 to 51 cases per month in the first half of 1997.

4. CMB currently operates two permanent depots and four temporary ones for bus parking and maintenance. The standard of maintenance is acceptable. The accident involvement rate of CMB's buses in terms of accidents per million vehicle-km decreased slightly from 5.73 in 1996 to 5.03 in the first half of 1997.

5. CMB's Passenger Liaison Group met six 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. CMB operates a passenger hotline and a faxline for answering passengers?enquiries. It has provided improved information display panels covering route details, timetables and faretables at major bus termini and bus stops. In 1996, it published a Bus Guide for distribution to members of the public on request. The Company also distributes purpose-designed pamphlets to passengers upon launching of new services and major service changes. General information on CMB's services is available on Internet.

7. In its Route Development Programme for year 1998 to 2002, the Company plans to introduce two new routes and 20 items of service improvements to meet anticipated growth in demand from new residential developments in the Eastern and the Southern Districts on Hong Kong Island. It has proposed to purchase 250 new buses in the next five years. The average age of CMB's fleet is 13.4 years at present. This will be lowered slightly to 12.1 years at the end of 2002.

8. Overall, CMB has shown some service improvements in the face of competition. According to the complaint statistics compiled by the Transport Complaints Unit, the public is most dissatisfied with three major areas of CMB's services, namely, erratic bus services, poor staff attitude and age of its bus fleet. In general, there is still room for CMB to improve its service quality and public relations.

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 CMB's application.

Transport Bureau
October 1997