MTR's 2013 revamped fare adjustment rate dips to 2.7%

There will also be new passes.

According to a release, Secretary for Transport & Housing Prof Anthony Cheung says the Executive Council has approved the results of the five-yearly review of the MTR's fare adjustment mechanism, which will take effect from June with a package of related fare measures.

Prof Cheung told reporters that under the new deal, the existing direct drive formula will be improved. "This would result in the productivity factor value being improved from the present 0.1% to 0.6%, so that the 2013 fare adjustment rate will reduce from 3.2% to 2.7%, a 16% reduction, benefiting all passengers."

He said the monthly passes scheme will be comprehensively enhanced, with the addition of a new Tung Chung-Nam Cheong sectional monthly pass, a new MTR City Saver ticket, and a new Monthly Pass Extra scheme.

A public affordability cap will be based on the change in median monthly household income, such that any fare increase will not be higher than the corresponding figure for that year. Any shortfall will be recouped in two phases in years when the calculated fare increase rate is lower than the rise in median monthly household income.

A profit sharing mechanism, based on the MTR’s underlying business profits each year, including profits from property developments and overseas ventures, will allocate a share of profits to an account to support time-limited fare concessions.

There will also be a service performance arrangement where service disruptions lasting 31 minutes or more, except for those outside the MTR’s control, will result in the MTR being fined, and the amount put into the fare concession account.

"We believe the overall arrangements will reduce not only the general fare table increase rate, but more significantly the fare burden of frequent and medium to long journey passengers."

For passengers benefiting from various monthly pass schemes and other fare concessions, their effective fare increase for 2013 will be significantly lower than the 2.7% calculated according to the revised direct drive formula, he said.

"We hope that at the end of the day, the individual passengers will be the one who would benefit most from this new deal."