Provisional Legislative Council
Panel on Transport

Citybus Limited
Application for Fare Increase

Purpose

Citybus Limited (Citybus) has applied for a weighted average fare increase of 8.7% to take effect on 1 November 1997. Citybus last increased the fares of its cross harbour routes and local routes on 3 March 1996 by a weighted average of 9.6%.

Citybus Franchised Bus Services

2. At present, Citybus operates 79 franchised bus routes with a fleet of about 515 buses. It carries about 410,000 passengers daily and employs about 1,860 staff.

Citybus's Performance

3. During the first half of 1997, Citybus's bus availability rate, in terms of actual over scheduled bus allocation, was maintained at 100%, same as that in 1996. The bus fleet increased by 30% over the same period. The percentage of lost trips increased slightly from 2.5% in 1996 to 2.8% in the first half of 1997. The average number of complaints about its services handled by the Transport Complaints Unit increased from 30 cases per month in 1996 to 39 cases per month in the first half of 1997.

4. Citybus currently operates four temporary depots for bus parking and maintenance. The standard of maintenance is satisfactory. The number of bus accidents per million vehicle-km increased from 5.6 in 1996 to 6.7 in the first half of 1997. In view of more frequent breakdowns and accidents in recent months, Citybus 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. Citybus'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. Citybus operates a 24-hour hotline and faxline for answering passengers?enquiries. It has installed information panels at all of its en-route bus stops for displaying route numbers, operation hours and fares. Apart from distribution of the guidebooks for its bus routes, the Company also distributes route map/leaflets to passengers upon launching of new services and major service changes. To provide easy access to route information for passengers, Citybus plans to set up a home page on Internet in December 1997.

7. In its Route Development Programme for the period 1998 to 2002, Citybus plans to introduce 5 new routes and implement 11 items of service improvements to meet anticipated growth in demand. It has proposed to purchase 75 buses in the next five years. The average age of Citybus's fleet is 3.5 years at present. This will increase to 7.0 years at the end of 2002.

8. Overall, Citybus 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 have to be pitched at a level affordable to the public. At the same time, operators should be able to recover their operating costs and obtain a reasonable return on their investment.

10. In considering Citybus's 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 Citybus's application.

Transport Bureau
October 1997