The Chief Executive in Council gave its concent to Hong Kong Tramways Limited (HKT) to alter fares, in accordance with section 51 of the Tramway Ordinance (Cap. 107).
Persons aged 12 or above will be charged $2.60, from $2.30. Children aged 3 to 11 will be charged $1.30, $1.20.
The monthly ticket will be $220, from $200.
In addition, the fare for the elderly (aged 65 or above) will increase from $1.10 to $1.20. The fare for a tourist ticket will remain at $34.
A Government spokesman said the Government should ensure that HKT would have sound financial capability in providing economical, efficient and quality tram services at reasonable fares.
In assessing the fare increase, the Government took into account various factors, including the quality and quantity of service provided and the planned improvement projects of HKT; the changes in operating costs and revenue since HKT's last fare adjustment; HKT's forecasts of future costs, revenue, profit and return; and the likely public acceptability.
HKT submitted a fare increase application to the Transport Department in August 2017. The Government has consulted the Legislative Council Panel on Transport and the Transport Advisory Committee.
HKT has not adjusted its fares for the past seven years. Since the last fare adjustment in June 2011, given the competition from other public transport modes, its patronage has been decreasing and the revenue has also correspondingly dropped.
The potential to further increase non-fare box revenue is rather limited. Although HKT made profits between 2011 and 2017, its profit after tax has been decreasing since 2014. HKT's profit after tax in 2016 and 2017 was $37.6 million and about $22.9 million respectively (the profit margin was 14.7 per cent and about 9 per cent respectively).
Nevertheless, HKT has planned to invest about $110 million in the next few years for service improvement projects.
