Value for money: Secretary for the Environnment, Transport & Works Dr Sarah Liao says the new bus-fare plan offers the best deal.

The Chief Executive in Council has approved the proposed bus-fare adjustment mechanism, which can better respond to economic conditions and improve objectivity. The related fare-cut initiatives will take effect on February 19.

Meanwhile, it has endorsed applications from Citybus, KMB and New Lantao Bus for new 10-year franchises. The new franchises will replace those expiring this June, and March and July 2007.

Secretary for the Environment, Transport & Works Dr Sarah Liao said the bus-fare adjustment mechanism, which takes effect today, has been through a long period of negotiations and is the best deal the Government can achieve at the moment.

More transparent, objective

"The fare -djustment mechanism is formula-related with a basket of factors. With that, we are able to provide more transparent and objective parameters for fare adjustment. We can be more proactive in terms of a situation in which there is economic downturn, we can ask for fare reduction," she added.

On passenger reward arrangements, Dr Liao said the existing trigger for sharing returns with passengers will be lowered from 13% return on average net fixed asset to 9.7% - a 25% improvement.

On the new franchises, she stressed bus companies must offer passengers reliable and efficient services. They have also been asked to adopt more environmental-friendly measures to reduce emissions.

Fare-cut initiatives on the way

Under the new bus-fare adjustment mechanism, fare-cut initiatives will be introduced on February 19, including:

* 10% day return-fare reduction on bus routes where the single fare is $15 or above;

* 5% day return-fare reduction on bus routes where the single fare is between $10 and $14.9; and

* bus-bus interchange discounts for 306 bus routes where the single fare is below $10.

She said the advance payment day return-fare reduction in the original proposal has been shelved in view of public response.

For the aged, Dr Liao said a $2 flat fare or half-price fare - whichever is lower - will be offered on Sundays and public holidays from January 28.

Dr Liao said the discounts will last for three years until the Government reviews the bus-fare adjustment mechanism and return rate.