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Quality of train services and fare concessions
2014-04-16

Following is a question by the Hon Charles Mok and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (April 16):

Question:

According to the Service Performance Arrangement (the Arrangement) implemented since June last year, the MTR Corporation Limited (MTRCL) has to pay a fine for each train service disruption lasting 31 minutes or longer, in an amount specified for that length of disruption, and the fines will be transferred to a fare concession account for provision of fare concessions to passengers. In addition, MTRCL will credit part of its profits to that account. Regarding the quality of train services and fare concessions, will the Government inform this Council if it knows:

(1) the (i) date, (ii) cause, (iii) course of the incident, (iv) length of service disruption, and (v) amount of fines imposed (set out in table form) for each service disruption resulting in MTRCL being fined, since the implementation of the Arrangement; the percentage of the total fines imposed in the profits of MTRCL recorded in the year concerned;

(2) the number of service disruptions lasting 31 minutes or longer which were caused by factors beyond MTRCL’s control since the implementation of the Arrangement, and set out in a table the (i) date, (ii) cause, (iii) course of the incident, and (iv) length of service disruption for each service disruption;

(3) the accumulated amount of money transferred to the fare concession account since its establishment; the percentage of that amount of money in the profits of MTRCL recorded in the same period; the current balance of the account;

(4) the fare concession schemes to be launched by MTRCL this year, and the (i) details, (ii) expected number of beneficiaries, (iii) total value of concessions, and (iv) percentage of the total value of concessions in the balance of the fare concession account in respect of each scheme; and

(5) the amount of investment to be made by MTRCL on service quality improvement next year (including train safety, contingency measures to deal with emergencies and relevant training, etc.), and set out the estimated expenditures for the improvement projects and their respective percentages in the annual total expenditure of MTRCL?

Reply:

President,

The Government and the MTR Corporation Limited (MTRCL) together completed the review on the Fare Adjustment Mechanism (FAM) in early 2013. The service performance arrangement has been introduced. Under the arrangement, a fine will be imposed on MTRCL for service disruptions of 31 minutes or above resulting from equipment failure or human factors. Proceeds are credited to a fare concession account and returned to passengers through the “10% Same Day Second Trip Discount” scheme. “Exemption Events” (i.e. events outside MTRCL’s control, such as those caused by passengers’ behaviours and bad weather) are excluded under the arrangement.

Separately, according to the profit sharing mechanism under the new FAM revised in April last year, MTRCL uses a pre-determined tiered table to decide on the amount to be shared with passengers each year under different underlying business profit levels. Proceeds will also go to the fare concession account and returned to passengers via the “10% Same Day Second Trip Discount” scheme. The underlying business profit includes profit from all businesses of MTRCL, i.e. profit from Hong Kong transport operations, Hong Kong station commercial business, Hong Kong property rental and management businesses, property developments and the Corporation’s overseas ventures, etc. MTRCL’s underlying business profit was $8.6 billion in 2013. Using the tiered table of the profit sharing mechanism, an amount of $125 million will be set aside for the “10% Same Day Second Trip Discount” scheme in 2014.

My reply to Hon Charles Mok’s question is as follows:

(1) Details of the service disruptions of 31 minutes or above resulting from equipment failure or human factors from 2012 to March 2014 subsequent to the introduction of the service performance arrangement last year are at Annex 1.

(2) Details of the service disruptions of 31 minutes or above resulting from events outside MTRCL’s control from 2012 to March 2014 are at Annex 2.

(3) The fare concession account has been in operation since its setup on July 1, 2013. The amount to be returned to passengers via the “10% Same Day Second Trip Discount” scheme under the new FAM in 2013/14 (effective since July 1, 2013) was estimated to be $363 million, including $150 million and $13 million respectively from the profit sharing mechanism and service performance arrangement, as well as an unspent sum of around $200 million committed from the 2012 fare concession schemes. Ending on March 31, 2014, the scheme eventually returned an amount of $379 million to passengers, with the extra sum of $16 million paid by MTRCL.

(4) Every year, MTRCL provides fare concession schemes that benefit different passenger groups. Such schemes include interchange discounts, monthly pass extra/day pass, and concessions for children, students, persons with disabilities and the elderly. The total amount exceeds $2 billion.

In 2014, MTRCL will put $152.5 million into the fare concession account for the “10% Same Day Second Trip Discount” scheme. The sum includes $125 million and $27.5 million respectively from the profit sharing mechanism and service performance arrangement. The scheme will be implemented again from June 2014 onwards.

As a result of the FAM review last year, the MTR City Saver ticket scheme will be launched in the second quarter this year. MTRCL is also examining the possibility of introducing other concessionary schemes.

(5) Every year, MTRCL invests over $5 billion ($5.6 billion in 2013, around half of that year’s expenditure on Hong Kong transport operations (around $8.4 billion) and related capital expenditure (around $2.7 billion), totalling $11.1 billion*) on replacement, upgrade and repair/maintenance of trains, railway assets as well as station facilities, with a view to maintaining a safe and reliable railway service. Moreover, MTRCL will from time to time strengthen the manpower of the Rapid Response Units of infrastructure maintenance, rolling stock and customer service. In case of incidents, the three Rapid Response Units can swiftly provide the necessary recovery and help maintain station order. This year, a total of 35 employees will be recruited for the Rapid Response Units, incurring an additional $11 million in the annual expenditure.

Under the Listening‧Responding Programme, service frequencies of various railway lines have been and will be enhanced this year in two stages, with the addition of 329 train trips per week on Island Line, Kwun Tong Line, Tsuen Wan Line, East Rail Line and West Rail Line in April and August. Light Rail service has also been enhanced since April, operating an extra 148 trips per week. With more coupled-set vehicles running along five Light Rail routes, the carrying capacity has been enhanced. Since the introduction of the Listening‧Responding Programme in 2012, an additional $57 million has been incurred in the annual expenditure.

Moreover, MTRCL will recruit some 300 platform assistants this year, adding the total number of platform assistants to about 1 000. The annual expenditure of which is about $20 million.

*Excluding the amount MTRCL has to pay the Kowloon-Canton Railway Corporation (KCRC) each year for using the latter’s railway assets since the rail merger (some $2 billion was paid in 2013).

Click here to read annex 1

Click here to read annex 2

Ends

Office Of Hon. Charles Mok, Legislative Councillor (IT)