The Transport Advisory Committee has endorsed the rail merger proposal saying it will enhance efficiency and benefit commuters.

Committee Chairman Cheng Yeuk-wah said today the merger package meets the five parameters set by the Government. It welcomed the introduction of a fare adjustment mechanism allowing fares to go up or down according to a formula that is linked to the consumer price index, a wage index and productivity factors.

"The future fare adjustment process will be more objective, transparent and the adjustment more predictable. This is a major improvement to the existing arrangement whereby the railway corporations have fare autonomy," Ms Cheng said.

Members welcomed the proposed fare cut that will benefit 2.8 million daily passenger trips, and the proposal to provide greater cuts for long-distance travellers. Passengers on journeys with fares at $12 or above will get at least a 10% cut.

Ms Cheng said this reflects public aspiration that more assistance be offered to encourage cross-district commuting.

"Naturally, the more fare reductions, the more receptive the public would be to the merger package. We have suggested the administration to continue to listen carefully to and take into account public views in moving forward," she said.

Ms Cheng said job security for all frontline staff of the two corporations will help ensure stability and safe operation of the railways.