TAC discusses Star Ferry's application for franchise extension and the taxi fuel surcharge applications

The Transport Advisory Committee (TAC) discussed today (Nov 8) Star Ferry's (SF) application for franchise extension and applications by the taxi trade for introducing a fuel surcharge.

On SF's application for franchise extension, TAC members considered that SF had been providing a proper and efficient ferry service and noted that the company had committed to further enhance its service standards if a new franchise was to be granted.

"We understand that having considered TAC's views, the Government will submit its proposal to the Chief Executive in Council for a final decision," said TAC Chairman Ms Teresa Cheng.

Regarding the taxi trade's applications for a fuel surcharge, Ms Cheng said that TAC appreciated that the fuel price increase created pressure on the trade's revenue and understood its request for adjusting its fare receipt in the face of difficult operating conditions. But she emphasized TAC's view was that it would be more appropriate for the trade to make use of the fare adjustment mechanism instead of a fuel surcharge.

"The fare adjustment mechanism has the benefit of taking into account not only fuel price increase but also revenue and other cost components, such as changes in repair and maintenance costs. It will be a more comprehensive assessment on the taxi trade's operating conditions," Ms Cheng said.

"In addition, this can balance public interest and avoid passing the fuel cost changes onto passengers directly each time when the fuel price fluctuates. "

Ms Cheng also said TAC considered that introducing a taxi fuel surcharge will have a knock-on effect on other modes of public transport, such as buses, minibuses and ferries. The public might not be able to withstand these negative implications.

"We hope the taxi trade could seriously consider submitting applications within the existing fare adjustment mechanism. We understand that the Government will process such applications of the taxi trade, if received, as quickly as possible."

At present, the public consultation on the taxi operation review was still in process. Some members of the taxi trade and the public have been expressing their views. Ms Cheng said the ultimate aim of the review was to enhance the competitiveness of taxi services and she hoped that the taxi trade would take the opportunity to consider whether and how the existing fare structure should be changed.

Ends/Thursday, November 8, 2007