The Chief Executive in Council today approved the maintaining of the current fare adjustment arrangement for franchised buses, which includes a formula to assess the level of supportable fare adjustment.

While the components and their weightings in the formula will remain unchanged, the value of productivity gain in the formula will be set at zero until the next review in three years' time.

In assessing the fare adjustment, the Government will consider changes and forecasts in operating cost and revenue, a reasonable rate of return, public acceptability and affordability, and the quantity and quality of service.

The Government also bases its decision on the outcome of the fare adjustment formula which covers changes in the wage index, composite consumer price index and productivity gain.

In assessing the reasonable rate of return, the Government will continue to make reference to 9.7% rate of return on average net fixed assets, which will continue to serve as the point for triggering the passenger reward arrangement.