Ref.: THB(T)CR 3/5591/94
LEGISLATIVE COUNCIL BRIEF
Public Bus Services Ordinance (Chapter 230)
NEW FRANCHISE FOR THE BUS NETWORK OF THE KOWLOON MOTOR BUS COMPANY (1933) LIMITED
INTRODUCTION
At the meeting of the Executive Council on 28 March 2017, the Council ADVISED and the Chief Executive ORDERED that a new franchise with conditions as set out at Annex A, conferring upon the Kowloon Motor Bus Company (1933) Limited (“KMB”) the right to operate a bus network for ten years from 0400 hours on 1 July 2017 to 0400 hours on 1 July 2027, be granted under section 5 of the Public Bus Services Ordinance (Cap. 230) (“the Ordinance”).
JUSTIFICATIONS
Bus Franchise
2. Under section 5 of the Ordinance, the Chief Executive in Council may grant to a registered company1 a franchise conferring the right to operate public bus service. Under section 6 of the Ordinance, a franchise may be granted for a period not exceeding ten years. Section 12 of the Ordinance prescribes that a grantee of a bus franchise is required to maintain a proper and efficient public bus service to the satisfaction of the Commissioner for Transport (“the Commissioner”) at all times during the franchise period.
1 This means any company registered under the Companies Ordinance (Cap. 622), or under the Companies Ordinance (Cap. 32) as in force from time to time before the commencement date of section 2 of Schedule 9 to the Companies Ordinance (Cap. 622). 3. The current franchise of KMB will expire on 1 July 2017. KMB has applied for a new franchise for another ten years. According to established practice, a grantee that has proven to be capable of providing a proper and efficient service and is willing to further invest in franchised bus operation may be granted a new franchise for a period of not exceeding ten years. The certainty of a ten-year franchise will facilitate long-term planning and development of bus service, including operation of loss-making but socially desirable routes. It will enable the grantee to secure financing on more favourable terms, thus reducing operating cost. A ten-year franchise will also provide room for weathering short-term business volatility. Bus operation is a labour-intensive service industry. A ten-year franchise is conducive to a more stable working environment for the grantee’s staff and the provision of a proper and efficient service to the travelling public.
4. Meanwhile, it is expected that the market share of franchised buses will continue to shrink with the commissioning of new railways in the coming years. For instance, following the commissioning of the Kwun Tong Line Extension in October 2016, the overall patronage on KMB’s bus routes serving Whampoa and Ho Man Tin dropped by around 10% in the first month of the new railway’s operation. Looking ahead, as the Shatin to Central Link (which is expected to come into operation in phases in 2019 and 2021) as well as the three priority railway projects under the Railway Development Strategy 2014 (namely Northern Link and Kwu Tung Station, Tuen Mun South Extension and East Kowloon Line) will all be within the service catchment of KMB’s network, KMB’s market share in public transport services will further shrink. The ageing population is also exerting pressure on KMB’s fare revenue in the longer run2.
2 Since 1993, franchised bus companies have offered concessionary half fares to elderly passengers through the Elderly Concessionary Fare Scheme (“ECFS”). Under the ECFS, franchised bus companies are exempted from the annual vehicle licence fees and receive reimbursement of rentals paid in respect of government land so as to facilitate them to introduce, or continue to offer, fare concessions to the elderly. Franchised bus companies shall absorb the fare revenue forgone which cannot be offset by the subsidy. Under the Government Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities (i.e. the “$2 Scheme”) introduced in 2012, the franchised bus companies still have to absorb any fare revenue forgone arising from the provision of fare concessions for the elderly under the ECFS (i.e. the difference between full fare and the concessionary half fare), while the Government will only reimburse the difference between the $2 fare and the concessionary half fare to the franchised bus companies. With the ageing population and growing number of elderly passengers, the financial burden borne by KMB for the provision of fare concessions to the elderly has kept on rising even after netting out government subsidies. The amount of fare revenue forgone borne by KMB in 2015 was about $310 million. KMB expects that such amount will continue to rise progressively over the next decade.
- 2 - 5. To assess whether KMB is providing proper and efficient public bus services, the Transport Department (“TD”) has been reviewing its performance regularly through passenger satisfaction surveys, site surveys, vehicle inspections, examination of regular returns and feedback from the public. In the light of the assessment in paragraphs 6 to 8 below, we consider that KMB has been providing proper and efficient public bus services. As regards its willingness to invest in franchised bus operation, it is noted that KMB will enhance passenger facilities and offer new fare concessions as set out in paragraphs 9 to 12 below. With the bus replacement cycle entering its peak in the coming years, KMB will need to make a substantial investment of about $3.8 billion for purchasing 1 380 new buses (around 35% of its current fleet) in the coming five years for replacing older buses and further enhancing its service. Having taken all factors into account, the Chief Executive-in-Council decided to grant to KMB a new franchise commencing upon the expiry of its current one and running for a period of ten years, from 0400 hours3 on 1 July 2017 to 0400 hours on 1 July 2027.
Assessment of Application
(A) Service Performance
6. As at end-2016, KMB was operating 384 bus routes using 3 916 buses. Between August 2007 (commencement of its existing franchise) and end-2016, KMB’s average lost trip rate was 3.7%. In view of the relatively higher lost trip rates in 2011 (8.0%) and 2012 (4.6%), KMB implemented a series of improvement measures which had encouragingly brought the lost trip rate down to a low level of 1.5% in 2016, slightly better than the industry average of 1.6%. The average number of complaints against KMB per million passengers received by the Transport Complaints Unit under the Transport Advisory Committee (“TAC”) was 2.73, lower than the overall industry average of 3.52 during the same period. The average number of KMB buses involved in accidents per million vehicle-kilometre travelled was 2.90, lower than the overall industry average of 4.19 during the same period. As at end-2016, over 95% of KMB’s fleet were low-floor wheelchair-accessible buses for the convenience of wheelchair passengers; by mid-2017 the whole fleet is
3 The existing franchise ends at 0400 hours of 1 July 2017 to ensure continued operation of the bus services straddling the last day of a franchise onto the early hours of the next day in case of a change of bus operator following the expiry of that franchise. The new franchise will take effect immediately after the expiry of the current one.
- 3 - expected to comprise low-floor buses.
7. With continual expansion of the railway network, the average daily patronage of KMB decreased slightly from about 2 762 000 passenger journeys in 2007 to about 2 705 000 passenger journeys in 2016. Nevertheless, KMB has strived to enhance its operational and network efficiency through vigorous rationalisation of bus routes in partnership with the Government. Between August 2007 and end-2016, KMB, with the assistance of TD, implemented 287 service improvement4 measures and 330 service rationalisation5 measures. It is noteworthy that in recent years, bus services in North District, Tai Po, Tuen Mun, Yuen Long, Sha Tin, Tsing Yi and Kowloon were rationalised under an “Area Approach”, through which bus services were reviewed holistically for a district as a whole, rather than on a route-by-route basis, with a view to maximising the overall benefits to the community.
8. TD commissioned an independent opinion survey in November 2015 to collect passengers’ overall opinion on KMB’s services. The results showed that 85% of the respondents were satisfied with the overall quality of services provided by KMB. A summary of the survey findings is at Annex B. Among the eight service performance aspects measured, KMB received satisfactory rating of over 80% in six aspects. The two performance aspects which received the comparatively lower satisfaction rating were environmental performance and service regularity. On environmental performance, all KMB’s buses have met the prevailing statutory emission standards at the relevant time when they were purchased (currently set at EURO V emission standards), with 51% of its current fleet being EURO V buses as at end-2016. With the on-going bus replacement programme, the percentage of buses of EURO V emission standards or above will rise to around 73% and 87% respectively in the next three and five years. As for service reliability, as reflected by the improving average lost trip rate mentioned in paragraph 6 above, KMB has been making continuous effort and has achieved noticeable result.
4 Service improvement measures mainly include introduction of new routes, frequency enhancement, extension of service hours and extension of routeing. 5 Service rationalisation measures mainly include route cancellation, frequency reduction, route truncation and re-routeing.
- 4 - (B) New Franchise Conditions and Commitments
Incorporating Franchise Conditions and Commitments of the Most Recently Granted Franchises and Updating Franchise Conditions
9. According to established practice, as a starting point in any franchise negotiation, the Government will ask the potential grantee to accept the franchise conditions of the most recently granted franchises as well as the commitments made thereunder in respect of enhancement of services and facilities as far as applicable. Generally speaking, generic and long-lasting requirements will be set out as franchise clauses, while specific initiatives or objectives required to be achieved within a certain timeframe will be set out by way of commitments.
10. In this regard, KMB’s new franchise will incorporate the franchise conditions in the most recently granted franchises, i.e. the franchises granted to Citybus Limited (Franchise for Hong Kong Island and Cross-Habour Bus Network) and New Lantao Bus Company (1973) Limited which commenced on 1 June 2016 and 1 March 2017 respectively. KMB will also fully adopt the commitments on enhancement of services and facilities in the aforesaid most recently granted franchises. Please refer to Annex C which sets out the key features of KMB’s new franchise in terms of bus services, enhancement of government regulation and improvement in environmental perfomance including those rolled over from the most recently granted franchises.
Introducing New Franchise Commitments
(i) Service Enhancement Initiatives
11. On top of the above, in the discussion on a new franchise, the Government has also requested KMB to introduce new initiatives for enhancing service as appropriate having regard to the changing circumstances as well as passenger demand. In this connection, KMB has committed to implementing the following initiatives concerning service quality under its new franchise –
(a) Offering free Wi-Fi service in bus compartments: KMB will set up Wi-Fi service in around 500 buses per year, and a total of around 2 000 buses (about half of KMB’s fleet) will be equipped with Wi-Fi service in phases by end-2020. The Wi-Fi service will be available for use by passengers free of charge. In order to optimise the use of the buses equipped
- 5 - with free Wi-Fi service, KMB will flexibly deploy these buses to operate on long-haul routes or routes with higher patronage;
(b) Enhancing ancillary facilities and passenger waiting environment: KMB will upgrade passenger facilities at highly-utilised bus termini and bus interchanges progressively throughout the period of the new franchise, such as setting up customer service kiosks, providing passengers with free Wi-Fi service, route enquiry service and Octopus card value-adding service, as well as providing passenger toilets subject to individual site conditions;
(c) Upgrading ancillary facilities at bus stops and setting up more shelters: The Government announced last year to provide subsidy to franchised bus companies (including KMB) for expediting their installation of real-time bus arrival information display panels and seats at covered bus stops. The preparatory work for the scheme is progressing well. It is expected that all existing and suitable covered bus stops of KMB will be equipped with seats and/or display panels by 2019-2020. Furthermore, KMB will erect or refurbish 20 shelters each year throughout the franchise period (i.e. a total of 200 shelters over the 10-year period of the new franchise). KMB will also explore alternative means to erect shelters at bus stops which have been constrained by the physical environment. To improve the passenger waiting environment and for passengers’ convenience, KMB will equip all new shelters with seats and real-time bus arrival information display panels wherever practicable;
(d) Partnering with “Hong Kong eTransport” to provide real-time arrival information: KMB has already made available real-time bus arrival information for all of its regular routes to passengers through smartphone applications and website, in addition to a total of some 450 display panels at major bus termini, bus stops and bus interchanges. KMB will partner with TD to provide new features in the latter’s “Hong Kong eTransport” smartphone application and website so as to provide convenience to users to obtain real-time arrival information of KMB’s routes. TD expects to be able to introduce the new hyperlink function within the first half of 2017. TD is also discussing similar partnerships with other franchised bus companies;
- 6 - (e) Providing information on seat vacancy in upper deck: KMB will conduct a trial by making use of suitable technology, through which passengers in the lower deck of the bus compartment will be given real-time information on seat vacancy in the upper deck. This will reduce unnecessary passenger movements between the two decks. Subject to the trial’s outcome, KMB will provide the same on more buses progressively; and
(f) Improving transport for persons with disabilities and introducing hospital routes (i.e. “H” routes): With an ageing population, KMB plans to launch a trial to reconfigure the bus compartments of its existing super-low-floor buses so that the lower deck can accommodate two wheelchair passengers at one time. KMB expects to launch the trial progressively from mid-2017 onwards on a few selected routes serving hospitals. Subject to passengers’ feedback, KMB will consider further expanding the number of buses with dual wheelchair spaces. In addition, KMB has proposed to introduce two “H” routes, with one route serving United Christian Hospital to ply between Yau Tong and Shun Lee, and another route serving Yan Chai Hospital to ply between Cheung Shan Estate and Lai Chi Kok. These routes will provide local residents (particularly the elderly) with convenient access to these two hospitals. Buses operating on these new routes will be equipped with the aforesaid barrier-free facilities on board. Detailed proposals on their routeings have been put to the District Councils concerned for discussion under this year’s Route Planning Programme.
(ii) Provision of Fare Concessions
12. Currently, KMB provides a variety of fare concessions to passengers (such as bus-bus interchange (“BBI”) concession schemes and section fares) which basically encompass all of its regular routes. In 2016, an average of about 630 000 passenger trips benefitted each day. According to KMB, the fare concessions offered under all BBI concession schemes amount to over $360 million per annum (the fare receipts in 2016 was $6.65 billion). KMB will offer the following fare concession initiatives to benefit more passengers under its new franchise (please refer to Annex D for a list of applicable routes for the concession initiatives to be introduced):
- 7 - (a) Introducing a long-haul route fare concession scheme for full-time students: KMB will introduce a long-haul route fare concession scheme for full-time students, under which students can enjoy concessionary half fare on their return trips on daytime routes solely operated by KMB with adult fare of $12 or above6. A total of 80 KMB routes met these criteria as at February 2017. This concessions will be offered on a regular basis and will be rolled out on the commencement date of the new franchise (i.e. 1 July 2017) (the scheme is subject to review after around six months of implementation, see paragraph 16 below);
(b) Offering more BBI concessions:
(i) KMB and Long Win Bus Company Limited (“LW”) have jointly introduced a BBI concession scheme for passengers interchanging between LW’s Airbus routes (“A” routes) and KMB’s routes since mid-November 2016, ahead of the commencement of the new franchise. Under the scheme, passengers can enjoy a fare discount of up to $6. The scheme operates on a year-round basis and is applicable to a wide range of routes, covering about 310 KMB solely operated routes7 and 13 LW “A” routes;
(ii) KMB will partner with the Hong Kong Tramways Limited to roll out inter-modal interchange fare concessions by offering free connecting journeys on trams on Hong Kong Island for passengers of 23 cross-harbour routes solely operated by KMB. Passengers who have taken trams can enjoy a fare discount of $2.3 per trip (equivalent to the existing adult single journey fare on trams) when
6 Any student aged between 12 and 25 and currently enrolled in a full-time day course offered by an acceptable education institution in Hong Kong is eligible for this concession scheme. To be eligible for the half fare discount on the return journey, a student should use a Personalised Octopus with “Student Status” to take a daytime route solely operated by KMB with a single adult journey fare currently at $12 or above, and to pay for the fare of the return trip on the same route or routes within the same group on the same operation day. Any new routes meeting the fare level under the existing fare scales will be included in the scheme. Certain single bound routes are presently not included in this scheme as they do not have corresponding return trip, or the fares of their return trips fall below $12. 7 Racecourse routes, recreational routes, special routes (festive service) and feeder routes connecting Tai Po Market Station (“K” routes) are excluded.
- 8 - interchanging for the aforesaid KMB routes on Hong Kong Island. KMB and Hong Kong Tramways Limited plan to launch the interchange concession initiative in mid-2017;
(iii) KMB will introduce 13 new BBI concession schemes, involving 80 routes, for enhancing intra-network interchange services under its new franchise. This will bring the total number of KMB’s BBI schemes to around 190 to benefit more passengers, particularly those in new development areas and less accessible areas.
(c) Alignment of fares for short-haul trips on cross-district routes and shuttle bus routes: At present, while the destinations and journey distances of certain cross-district routes and shuttle bus routes operated by KMB are comparable, their section fares offered at stops along trunk roads or bus interchanges (such as tunnel toll plazas) are different (or no section fare is offered at all). The Government and KMB have looked into the issue, and KMB will align the section fares of 77 routes with the aforesaid issue with effect from 1 July 2017. Routes with similar destinations and comparable journey distances will be placed under the same group, and the fare level for short-haul trips on all routes within the same group will be aligned with the lowest existing one. This will enable passengers to enjoy more route choices at the same fare8.
(C) Other Issue - Profit Control Scheme
13. Under section 5(3)(b) of the Ordinance, a franchise shall, except where the Legislative Council (“LegCo”) by resolution excludes the application of the Profit Control Scheme (“PCS”), be subject to the PCS as stipulated under Part V of the Ordinance. In keeping with established
8 For instance, there are currently four KMB routes plying via MTR Tsuen Wan Station with the same terminal point at Allway Gardens but their fares for this section of journey range from $3.5 to $6.4. KMB will align the fares of these four routes at $3.5 for the above section of journey. Another example is the existing 21 KMB routes heading to Tuen Mun via Tuen Mun Road and observing Tuen Mun Road BBI en route. KMB will align their fares to $8.4 for that section of journey while their present fares range from $8.4 to $18.4.
- 9 - practice that new franchises shall not be entitled to the PCS9, we shall seek a LegCo resolution under section 5(3)(b) of the Ordinance for disapplication of the PCS to KMB’s new franchise.
IMPLICATIONS OF THE NEW FRANCHISE
14. The new franchise has economic, environmental, family and sustainability implications as set out at Annex E. The new franchise is in conformity with the Basic Law, including the provisions concerning human rights. It has no civil service, financial, gender or productivity implications.
PUBLIC CONSULTATION
15. The Government conducted public consultation on the requirements of KMB’s new franchise between January and April 2016. A total of 135 submissions were received, covering aspects including service quality, fare concessions and regulation of bus services. The LegCo Panel on Transport also discussed on 15 January 2016 and 21 June 2016 respectively our plan to enter into direct negotiation with KMB on the granting of a new franchise and the views canvassed from public consultation. We have actively followed up with KMB on the major suggestions and views received from the public consultation exercise. Please refer to Annex F for details.
16. The LegCo Panel on Transport was subsequently briefed on the negotiation outcome on 20 January 2017. The Panel took note of the service enhancement and fare concession initiatives to be pursued by KMB under the new franchise. The major requests from Panel members were about widening the scope of the fare concessions for students and introducing monthly passes on KMB’s routes. Four motions concerning
9 Under the PCS, fares are to be set at a level which allows cost recovery plus a certain level of profit with a cap on the permitted return. Profit exceeding the permitted return in any year will be retained in a development fund. When profit falls below the permitted return, the grantee may make good the shortfall by drawing money from the development fund. In view of strong criticisms by LegCo and the community that PCS encouraged the grantee to over-expand and inflate its asset value, guaranteed a profit level irrespective of performance, and provided no incentive for cost efficiency and expenditure control and following a decision by the then Governor-in-Council in June 1992, all bus franchises granted thereafter were awarded without PCS.
- 10 - mainly fare concessions and service quality were carried10, while the Government subsequently provided the Panel with written response to these four motions on 14 March (see LC Paper No. CB(4)699/16-17(01) 11 ). Although KMB has been in a profitable position in recent years due to significant drop in fuel prices, having regard to the various challenges posed to the bus industry over the medium to long term (particularly the continual expansion of our railway network), we have been discussing the new franchise with KMB in a prudent and pragmatic manner, with the focus of the fare concession and service enhancement initiatives placed on areas which could benefit more passengers or specific cohorts, while ensuring that their implementation could be sustainable. While it is our established policy to encourage public transport operators to offer more fare concessions, it should be noted that public transport services are provided by private operators in accordance with commercial principles basically without government subsidies. The provision of fare concessions should thus avoid exerting fare pressure which might eventually affect the basic fare level. On this basis, we will continue to explore with KMB (and other operators) the feasibility of introducing further practicable fare concessions initiatives (including monthly passes). We will also conduct a review on the fare concession for full-time students around six months after its implementation, focusing on the possibility of fine-tuning its detailed arrangements with a view to benefitting more students. For other requests on service enhancement, we will continue to follow up with KMB on an ongoing basis.
17. The TAC was consulted on matters concerning KMB’s new franchise on 26 January 2016, 28 June 2016 and 16 February 2017. It supported the granting of a new ten-year franchise to KMB. TAC’s advice is set out in the letter by the TAC Chairman to the Secretary for Transport and Housing at Annex G.
PUBLICITY
18. The new franchise will be published in the Gazette as General Notice for public information. A spokesman will be available to
10 The motions were put forward at the meeting of the LegCo Panel on Transport on 20 January 2017. The meeting ran out of time and these motions were carried when Members voted on them at the subsequent panel meeting on 24 February 2017. 11 The paper can be retrieved from the LegCo’s website (http://library.legco.gov.hk:1080/record=b1194988).
- 11 - respond to media enquiries.
ENQUIRIES
19. Any enquiry concerning this brief can be directed to Miss Rachel Kwan, Assistant Commissioner for Transport, at 2829 5210.
Transport and Housing Bureau 28 March 2017
- 12 -
Annex A
PUBLIC BUS SERVICES ORDINANCE (Chapter 230)
FRANCHISE
In exercise of the powers conferred by section 5 of the Public Bus Services Ordinance, the Chief Executive in Council hereby grants to The Kowloon Motor Bus Company (1933) Limited (九龍 巴士(一九三三)有限公司), a company registered under the Companies Ordinance, whose registered office is situated at 16/F, 9 Po Lun Street, Lai Chi Kok, Kowloon, Hong Kong, the right to operate a public bus service on the routes specified in the appropriate Schedule of Routes order from time to time in force in respect of the said company under section 5(1), and in any notices under sections 14 and 15, of the Public Bus Services Ordinance, subject to the conditions hereinafter contained namely:
PART I
PRELIMINARY
1. (1) In this franchise, unless the context otherwise requires: Interpretation
“Bus Service” means the Grantee’s business of operating a public bus service under this franchise;
“Certification Body” means a certification body accredited under the Hong Kong Certification Body Accreditation Scheme by the Hong Kong Accreditation Service, Innovation and Technology Commission;
“Clause” means a clause of this franchise;
“Commencement Date” means 04:00 Hours 1 July 2017;
“Facilities” means each of the following and includes parts thereof:
bus stop signs, bus stop sign posts, canopies, shelters, seats, queue railings, lighting at bus stops, terminal points and termini; information panels and equipment; customer service centres; bus regulators’ offices and kiosks; air-conditioned
Page 1 of 33
passenger waiting areas; television broadcasting and all other audio-visual equipment; and such other facilities that are used by the Grantee for the purpose of or in connection with the Bus Service, and in the event of any dispute as to the meaning of any of the aforesaid, shall be determined by the Commissioner after consultation with the Grantee;
“Forward Planning Programme” means a programme which is in force from time to time under section 12A of the Ordinance;
“Franchise Period” means the period referred to in Clause 4;
“Grantee” means The Kowloon Motor Bus Company (1933) Limited (九龍巴士(一九三三)有限公司);
“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China;
“Kwai Chung Depot” means the Grantee’s former bus depot situated at Kwai Chung KCTL 215 which was disposed of by the Grantee in 2005;
“Kwun Tong Depot” means the Grantee’s former bus depot situated at Kwun Tong Inland Lot No. 240 which was disposed of by the Grantee in 2008;
“Open Tendering” means a tendering exercise where all interested persons may participate;
“Ordinance” means the Public Bus Services Ordinance (Cap. 230);
“Other Grantee” means any other company which is a grantee of a public bus franchise under the Ordinance;
“Passenger Liaison Groups” means the passenger liaison groups established pursuant to Clause 15(1);
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“Qualified Auditor” means a person who is qualified for appointment as an auditor of a company under section 393 of the Companies Ordinance (Cap. 622);
“Related Party” or “Related Parties” means a party or parties that is/are considered to be related for the purposes of the Hong Kong Accounting Standard (HKAS) No. 24 (Revised) “Related Party Disclosures” issued by the Hong Kong Institute of Certified Public Accountants in November 2016 as the same may be amended from time to time;
“Schedule of Service” means a schedule of service issued by the Commissioner from time to time in respect of each bus route of the Bus Service specifying, pursuant to the Ordinance, bus service arrangements including but not limited to the route, timetable, faretable, journey distance, journey time, carrying capacity and type of buses to be used;
“TM80 Depot” means the Grantee’s former bus depot situated at Tuen Mun Town Lot No. 80 which was disposed of by the Grantee in 2010; and
“West Kowloon Reclamation Depot” means the Grantee’s bus depot situated at 100 Hing Wah Street, West Kowloon Reclamation which is leased from the Government under short term tenancy number KX2536.
(2) Any expression or word not specifically herein defined shall have the meaning assigned to it by the Ordinance and, if not defined therein, by the Interpretation and General Clauses Ordinance (Cap. 1) and/or the Hong Kong Reunification Ordinance (110 of 1997).
(3) For the avoidance of doubt, unless there is express provision to the contrary, the Grantee shall at no cost to the Government comply with any direction and requirement given under this franchise by the Commissioner, the Financial Secretary or any other public officer.
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(4) For the avoidance of doubt:
(a) where this franchise confers upon any public officer power to do or enforce the doing of any act or thing, all such powers shall be also conferred as are reasonably necessary to enable the public officer to do or enforce the doing of the act or thing.
(b) without prejudice to the generality of Clause 1(4)(a) above, where this franchise confers power upon any public officer:
(i) to grant approval, consent or exemption, such power shall include power to impose reasonable conditions subject to which such approval, consent or exemption may be granted;
(ii) to approve any person or thing, such power shall include power to withdraw approval thereof; and
(iii) to give directions, such power shall include power to couch the same in the form of prohibitions.
2. (1) This franchise is granted subject to the Grantee complying with the Franchise terms and conditions on its part to be performed in any franchise subject to applicable to the Grantee under the Ordinance and in force in the performance period ending 04:00 Hours 1 July 2017 and with the provisions of of obligations, the Ordinance. etc.
(2) The Ordinance shall apply to this franchise in full and for all purposes. Nothing in this franchise is intended or shall be construed to affect, restrict, limit or diminish in any way, any of the powers (including discretion or privilege) of the Government, the Commissioner or any other public officer under the Laws of Hong Kong.
3. The Grantee shall have the non-exclusive right to operate a public bus Routes Order service on the routes which are specified in the Schedule of Routes order for the time being in force.
4. This franchise is granted for the period from and including the Franchise Commencement Date until 04:00 Hours 1 July 2027 and such period Period may be extended under section 6(2) or (3) of the Ordinance.
5. For the purposes of section 8 of the Ordinance, a majority of the Residential directors of the Grantee shall be ordinarily resident in Hong Kong requirement irrespective of their nationality.
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PART II
GENERAL
6. The Grantee shall, if requested by the Financial Secretary, take such Grantee’s steps as are necessary and reasonable to have and to continue to have shares to be its shares listed on the Stock Exchange Company as defined in section listed on the 1 of Schedule I to the Securities and Futures Ordinance (Cap. 571). Stock Exchange Company
7. (1) The Grantee shall, as far as practicable, acquire, provide, adopt, Provision of maintain, or modify to the satisfaction of the Commissioner such the Facilities, safety or service enhancement facilities, installation, fixtures, etc. fittings, apparatus or equipment on its buses as may be reasonably required by the Commissioner after consultation with the Grantee.
(2) Subject to Clauses 9 and 10, the Grantee shall acquire, provide, adopt, maintain, modify or remove to the satisfaction of the Commissioner such Facilities as may be reasonably required by the Commissioner after consultation with the Grantee.
8. Subject to Clauses 9 and 10, the Grantee shall acquire, provide, adopt, Provision of maintain, modify or remove to the satisfaction of the Commissioner canteens, such canteens, washrooms and toilets for its employees and the washrooms employees of any Other Grantee as the Commissioner considers and toilets appropriate after consultation with the Grantee.
9. (1) The Commissioner may, after consultation with the Grantee, Shared use of direct in writing that for a specified period with effect from a bus stops, etc. specified date the Grantee shall share or permit the sharing of the use of any or all of the bus stops, terminal points, termini, Facilities (other than those provided on-bus), canteens, washrooms and toilets acquired, provided or adopted by the Grantee or any Other Grantee whether under this or any other franchise, as the case may be.
(2) The Commissioner may, after consultation with the Grantee, direct in writing that with effect from a specified date the Grantee shall cease using, vacate or remove any bus stops, terminal points, termini and Facilities which are or have been used by the Grantee under this or any other franchise and which are not required for use by the Grantee for the Bus Service.
(3) The Commissioner may, after consultation with the Grantee, direct in writing that with effect from a specified date the Grantee shall:
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(a) make available and transfer the Grantee’s whole right, title and interest in the Facilities (other than those provided on-bus) acquired, provided or adopted by the Grantee under this or any other franchise to any Other Grantee; and
(b) accept the transfer of and assume responsibility for any facilities (other than those provided on-bus) which are used by any Other Grantee and which are to be transferred to the Grantee by virtue of a direction given by the Commissioner to any Other Grantee under the provisions of any other franchise with similar effect to Clause 9(3)(a).
(4) In the event that the Commissioner makes a direction:
(a) under Clause 9(1), the Grantee shall negotiate in good faith with the concerned Other Grantee to reach an agreement as to maintenance responsibilities and the fair and equitable apportionment of the expenses of maintaining the Facilities (other than those provided on-bus), canteens, washrooms and toilets between the Grantee and the Other Grantee; and
(b) under Clause 9(3)(a) or (b), the Grantee shall negotiate in good faith with the concerned Other Grantee to reach an agreement as to a fair and equitable price for acquiring or providing the facilities or Facilities (other than those provided on-bus).
(5) In the event that the Grantee and the concerned Other Grantee fail to reach an agreement under Clause 9(4)(a) or (b) within a reasonable time to be specified by the Commissioner, the Grantee and the concerned Other Grantee shall enter into an agreement on what the Commissioner may determine to be a fair and equitable apportionment or price for the purpose of Clause 9(4)(a) and (b).
10. (1) No Facilities, installation, fixtures, fittings, apparatus or Approval of equipment shall be constructed, erected, installed or permitted at, Commissioner on or in any bus stops, terminal points, termini or buses without required in the prior approval in writing of the Commissioner. The connection Commissioner may require the Grantee to remove any Facilities, with the installation, fixtures, fittings, apparatus or equipment which are Facilities, constructed, erected, installed or permitted in contravention of canteens, this Clause. washrooms and toilets (2) No canteens, washrooms or toilets referred to in Clause 8 shall be constructed, erected or installed nor shall any structural alteration or change in use be made thereto without the prior approval in writing of the Commissioner.
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11. (1) The Grantee shall not for the purposes of advertising, Advertising, sponsorship or commercial promotion use or permit the use of, etc. the Facilities, canteens, washrooms and toilets of the Grantee or any Other Grantee without the prior approval in writing of the Commissioner (such approval shall not be unreasonably withheld).
(2) Any agreement or arrangement in respect of any advertising, sponsorship or commercial promotion entered into by the Grantee with the prior approval in writing of the Commissioner under Clause 11(1) above shall be and be made subject to the terms and conditions of this franchise.
12. The Commissioner may by notice in writing direct the Grantee to use Government to such terminal points or termini and facilities which will be made provide available by the Government at no cost to the Grantee for the purposes parking of parking and turn-around of buses used by the Grantee on any of the facilities at specified routes. terminal points
13. (1) Subject to Clause 13(3), the Grantee shall, at such place as the Display of Commissioner may direct in writing, make available free of routes and charge for inspection by members of the public a copy of the fares Schedule of Routes order for the time being in force and any notice given under section 15 of the Ordinance.
(2) Subject to Clause 13(3), the Grantee shall cause to be displayed free of charge for viewing by members of the public in a conspicuous place:
(a) at each terminal point or terminus of a specified route; and
(b) at such bus stops as may be specified by the Commissioner
information on the location of the bus stops and the fares and timetables applicable to the bus service on such specified routes.
(3) The Grantee shall provide the information mentioned in Clause 13(1) and (2) above in such form and manner, by such means, and at such times as may be reasonably required by the Commissioner, after consultation with the Grantee.
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14. (1) The Grantee shall make available to the public, in relation to the Making bus service on each specified route, the following information: available information on (a) the bus fares; specified route, etc. (b) the route and timetable; and
(c) the location of bus stops, journey time and any other related information, as may be reasonably required by the Commissioner after consultation with the Grantee
in such form and manner, by such means and at such times as may be specified from time to time by the Commissioner.
(2) The Grantee shall make available to the public the information referred to in Clause 14(1)(a) to (c) above for free or for a fee not exceeding that determined by the Commissioner.
(3) The Grantee shall also make available to the public, the information referred to in Clause 14(1)(a) to (c) above on the Grantee’s website and through readily accessible common web browsers as may be reasonably required by the Commissioner after consultation with the Grantee.
15. (1) The Grantee shall, to the satisfaction of the Commissioner, make Passenger appropriate arrangements including the establishment of Liaison Passenger Liaison Groups to liaise, communicate with and Groups receive opinions of the public for the purpose of assessing and improving standards of the Bus Service.
(2) The Grantee shall, to the satisfaction of the Commissioner, provide the Passenger Liaison Groups with reasonable facilities for meetings including venues, postage and stationery, as they may require from time to time.
(3) The Grantee shall promulgate such rules for membership and meetings of the Passenger Liaison Groups, rules for attendance by officers of the Transport Department as observers, terms of reference of the Passenger Liaison Groups and, without limitation, such other terms relating to the Passenger Liaison Groups, their members or constitution as the Commissioner may direct or approve in writing. Any officer of the Transport Department may attend the meetings of the Passenger Liaison Groups as an observer.
(4) The Grantee shall use its reasonable endeavours to facilitate meetings of each of the Passenger Liaison Groups at least once every two months or as and when the Commissioner may reasonably require for the purpose of making proposals for maintaining or improving standards relating to the Bus Service.
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(5) The Grantee shall report to the Commissioner, at least once every two months or as and when directed by the Commissioner, the details of passenger liaison arrangements made by the Grantee, the proposals made by the Passenger Liaison Groups and implementation of those proposals.
(6) The Grantee shall waive and forego all rights to sue each member or observer of the Passenger Liaison Groups in respect of any statement defamatory of the Grantee made by him during a meeting of a Passenger Liaison Group or in any communication published only to the members of a Passenger Liaison Group or to any officer of the Transport Department attending any such meeting as an observer in respect of the Bus Service unless such statement is made maliciously.
16. (1) The Grantee shall to the satisfaction of the Commissioner make Passenger appropriate arrangements to conduct passenger satisfaction satisfaction surveys in such form and manner, by such means and at such times as may be reasonably required by the Commissioner, after consultation with the Grantee.
(2) (a) The Grantee shall publish:
(i) its passenger service pledge setting a reasonable time frame for responding to complaints and suggestions from the public; and
(ii) the achievement rate of its passenger service pledge under Clause 16(2)(a)(i) above.
(b) The Grantee shall respond to complaints and suggestions referred to the Grantee by the Commissioner at such times and in such manner as may be reasonably required by the Commissioner after consultation with the Grantee.
17. (1) The Grantee shall furnish the Commissioner, on or before 15 List of January each year in such form as the Commissioner may specify premises and from time to time, with information on: maintenance facilities (a) premises provided and maintained by the Grantee under section 19 of the Ordinance as at 31 December of the preceding year; and
(b) facilities provided by the Grantee and their locations as at 31 December of the preceding year for the construction, repair and maintenance of the buses and other vehicles used or kept by the Grantee for the purposes of or in connection with this franchise.
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(2) The Commissioner may, after consultation with the Grantee, from time to time direct by notice in writing to the Grantee the manner in which the Grantee is to use any of the specified premises provided and maintained by the Grantee under section 19 of the Ordinance.
18. The Grantee shall, as and when directed by and to the satisfaction of Provision of the Commissioner: control centre and (a) provide and maintain for the purpose of regulating, contingency controlling and directing bus movements a control centre arrangement which shall be:
(i) situated at such location as the Commissioner may direct; and
(ii) manned at all times by competent personnel of the Grantee;
(b) provide and maintain at all times direct communication links between the control centre and the emergency contact point of the Transport Department designated by the Commissioner;
(c) design a contingency plan to meet any exigency that may arise in respect of the Bus Service and shall promptly carry out the measures contained in the contingency plan when such exigency arises; and
(d) provide assistance, including sending competent personnel to attend the emergency control centre of the Transport Department.
19. (1) The Grantee may provide, or permit the provision of, ancillary Provision of or add-on services subject to prior approval in writing of the ancillary and Commissioner. add-on services (2) The Grantee shall provide such ancillary or add-on services as may be reasonably required by the Commissioner for the purpose of the Bus Service after consultation with the Grantee.
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PART III
FINANCIAL
20. In this Part, unless the context otherwise requires: Definitions in Part III “Appointed Actuary” means an actuary who:
(a) has the qualifications as prescribed for the appointment of actuaries under the Insurance Companies (Actuaries’ Qualifications) Regulations (Cap. 41A); and
(b) is in practice with a firm providing actuarial consultancy services in Hong Kong;
“Contingency Fund” means all contingency funds provided or to be provided by the Grantee for meeting its liabilities including without limitation those for third party risks in respect of the Bus Service but excluding any contingency funds for any loss of revenue due to any cause whatsoever;
“Fair Market Value” of any of the Fixed Assets means the market price at which the assets could be acquired in a transaction at arm’s length between persons that are not Related Parties;
“Fixed Assets” means:
(a) land, buildings, furniture, fixtures and fittings, buses, coaches and other motor vehicles, plant, machinery and equipment;
(b) other fixed assets;
(c) all assets mentioned in (a) and (b) which are in the course of construction or in transit; and
(d) payments on account of all assets mentioned in (a), (b) and (c)
in which the Grantee has any right, title or interest (including assets acquired through finance leases) and which are used or to be used or kept or to be kept by the Grantee for the purposes of or in connection with the Bus Service;
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but excludes:
(A) stores and spares including but not limited to items which have not been used but may form part of any buses, coaches or other motor vehicles, plant, machinery and equipment which are used or to be used or kept or to be kept by the Grantee for the purpose of or in connection with the Bus Service, irrespective of the amount of the unit cost of each item; and
(B) any capital cost incurred prior to the dates specified below relating to modification or other works effected to or at any land or buildings forming part of the Grantee’s undertaking as a result of or otherwise made necessary by reason of the disposal of the following depots:
Depot Specified Date Kwai Chung Depot 14 December 2005 Kwun Tong Depot 23 December 2005 TM80 Depot 17 December 2008
“Funds” means both the Contingency Fund and the Pension Fund unless the Commissioner determines otherwise;
“Gross Revenue” means the total income or revenue of the Grantee derived or arising from or connected with the Bus Service, which, for the avoidance of doubt, includes inter alia:
(a) revenue of the Grantee from fares directly or indirectly appertaining to the Bus Service;
(b) income derived or realised directly or indirectly from Fixed Assets including but not limited to rents, advertising and private hire;
(c) interest on cash and bank balances of the Grantee consisting of or representing funds derived or arising from the Bus Service;
(d) income derived or realised directly or indirectly from any investment or commercial transactions, other than from Fixed Assets, made by the Grantee of funds derived or arising from the Bus Service;
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(e) income or revenue derived by the Grantee from any transaction, operation, business or activity connected with or otherwise related or ancillary, whether directly or indirectly to the Bus Service; and
(f) currency gains realised by the Grantee in or in connection with:
(i) the acquisition of the Fixed Assets, stores and spares;
(ii) the making and maintenance of provision for payment of emoluments for staff engaged in the Bus Service;
(iii) deposits in foreign currency accounts of funds derived or arising from the Bus Service; and
(iv) other transactions which are directly related to the Bus Service,
but excludes capital gains or capital receipts of the Grantee derived or arising from or connected with the disposal of any right, title or interest in land;
“Pension Fund” means the fund or funds provided or to be provided by the Grantee for the payment of employees’ pensions or other retirement benefits in respect of employees engaged directly or indirectly in the operation of the Bus Service;
“Service-Related Expenditure” means the total expenditure of the Grantee incurred or arising from or connected with the Bus Service, which, for the avoidance of doubt, includes inter alia:
(a) operating costs directly or indirectly incurred by the Grantee appertaining to the operation of the Bus Service and contributions to the Funds required in accordance with the assessment made by the Appointed Actuary;
(b) depreciation as charged in accordance with Clause 21;
(c) expenditure in establishing and maintaining public liaison and arranging for passenger satisfaction surveys in accordance with Clauses 15 and 16(1); and
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(d) currency losses suffered by the Grantee in or in connection with:
(i) the acquisition of Fixed Assets, stores and spares;
(ii) the making and maintenance of provision for payment of emoluments for staff engaged in the Bus Service;
(iii) deposits in foreign currency accounts of funds derived or arising from the Bus Service; and
(iv) other transactions which are directly related to the Bus Service, but excludes:
(A) capital losses of the Grantee derived or arising from or connected with the disposal of any right, title or interest in land;
(B) capital expenditure incurred in or arising from or connected with the Bus Service (other than that provided in sub-clause (d)(i) above);
(C) any amount of over-provisioning in the accounts of the Grantee;
(D) any amount of amortisation or depreciation effected (if any) in respect of any right, title or interest in land;
(E) finance costs and depreciation charges in respect of such part of the construction costs of West Kowloon Reclamation Depot incurred prior to 11 February 2002; and
(F) finance costs and depreciation charges in respect of the capital cost incurred prior to the dates specified below on relocation and modification work in connection with the disposal of the following depots:
Depot Specified Date Kwai Chung Depot 14 December 2005 Kwun Tong Depot 23 December 2005 TM80 Depot 17 December 2008
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“Undertaking” means:
(a) all the assets listed in Schedule I as the same is updated or revised in accordance with Clause 22(2); and
(b) all Fixed Assets and stores and spares which have been acquired by the Grantee to be included in Schedule I but before the same have been included pursuant to Clause 22(2).
21. For the purpose of this franchise, the following practice shall be Depreciation observed in the accounts of the Grantee: of Fixed Assets (1) With effect from the Commencement Date, depreciation expenses of the Grantee’s Fixed Assets shall be calculated at their costs of acquisition and by applying, on a straight-line basis, annual rates of depreciation derived from the useful lives, and subject to the residual values, as set out in the table below:
Fixed Assets Useful Life for Residual Value Depreciation
Land Not Applicable Not Applicable
Buildings ((a) Permanent buildings: $1 40 years
(b) Other buildings: $1 Term of lease including extension or renewal period
Buses and (a) New 1 buses and $100 for each coaches, coaches: bus or coach other than light 14 years unless duty coaches otherwise approved by the Commissioner
(b) Second-hand buses $100 for each and coaches: bus or coach 14 years from the date of manufacture unless otherwise approved by the
1 Means buses which have been acquired by the Grantee first hand
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Commissioner
Light duty 6 years $100 for each coaches light duty coach
Other motor 6 years Nil vehicles
Computers 5 years Nil
Plant, 7 years Nil machinery and equipment (other than computers), furniture, fixtures and fittings
(2) When calculating the depreciation expenses of the Grantee’s Fixed Assets, the cost of acquisition of the Fixed Assets shall be net of any subsidies received or receivable by the Grantee from the Government solely for the purpose of the acquisition of such Fixed Assets.
(3) The cost of acquisition of Fixed Assets acquired through a finance lease shall be measured and depreciated in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and, where applicable, subject to the provisions in Clause 21(1) above.
(4) Notwithstanding any other provisions of this franchise, Clause 21(5) shall not apply to any of the construction or building costs referred to in Clause 21(12).
(5) When any Fixed Assets or part thereof are sold or otherwise disposed of or when compensation is received from insurers in respect of damage to or loss of any Fixed Assets or any part thereof, the difference between the proceeds and net book value will be deducted from or added to the Service-Related Expenditure, as the case may be.
(6) For the purpose of Clause 21(5):
(a) Fixed Assets shall exclude land in respect of which the Grantee has any right, title or interest.
(b) Where the Fixed Assets comprise buildings which are sold or disposed of together with the land on which they stand,
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and it is impossible to ascertain which portion of the sale proceeds is attributable to such buildings alone, the Grantee shall provide a valuation report prepared by an independent surveyor on the Fair Market Value of such buildings as of the date of disposal. Such Fair Market Value will be deemed to be the sale proceeds of the buildings for the purpose of Clause 21(5).
(7) Depreciation of any Fixed Assets shall cease to be effected when the residual values as stipulated at Clause 21(1) have been reached.
(8) No amortisation or depreciation shall be effected in respect of any land comprised in the Fixed Assets. Such land shall be valued at cost of acquisition.
(9) Whether a building is to be regarded as a permanent building for the purpose of this Clause shall be determined by the Commissioner after having regard, inter alia, to the estimated useful life of that building, the unexpired period of the lease including any extension or renewal period, and land use zoning. If the Grantee disagrees with any determination of the Commissioner on what is or is not a permanent building for the purpose of this Clause, the Grantee and the Commissioner shall forward the point in disagreement to the Secretary for Transport and Housing who shall decide on the point having regard to the submissions of the Grantee and the Commissioner and such decision of the Secretary for Transport and Housing shall, subject to section 33 of the Ordinance, be final.
(10) The cost of any structural addition to a permanent or other building comprised in the Fixed Assets shall, from the date the addition is made, be depreciated in accordance with Clause 21(1) along with such permanent or other building (as the case may be) over the remainder of the useful life of that permanent or other building.
(11) The net book value of all Fixed Assets brought forward from any public bus franchise applicable to the Grantee immediately before the Commencement Date shall be depreciated in accordance with but over the remainder of the applicable useful life as stipulated in Clause 21(1).
(12) The net book value of the West Kowloon Reclamation Depot as at 11 February 2002 is nil. For the avoidance of doubt, the construction cost of the West Kowloon Reclamation Depot incurred prior to 11 February 2002 and any cost that may be incurred by the Grantee at any time for rectifying any latent defects of any part of the West Kowloon Reclamation Depot constructed prior to 11 February 2002 shall not be counted
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towards the average net fixed assets or charged against the Service-Related Expenditure of the Grantee.
22. (1) The Grantee represents that its Undertaking at the Grantee’s Commencement Date shall be as listed in Schedule I. Subject Undertaking to Clauses 22(3) and (4) and except for that part of the and Undertaking listed in Schedule I which is held on short term restrictions tenancies, the Grantee shall maintain at all times during the on disposal Franchise Period its Undertaking sufficient to operate a proper and efficient public bus service on the specified routes in accordance with section 12(1) of the Ordinance.
(2) The Grantee shall provide in writing to the Commissioner an annual update of Schedule I within five months after the close of an accounting year.
(3) The Grantee shall not without the previous written consent of the Commissioner assign, transfer, mortgage, charge, lease, grant option to lease, part with possession or otherwise dispose of the whole or any part of its Undertaking falling within the following description:
(a) land, buildings and buses, or
(b) any other part of the Undertaking (except for plant, machinery, equipment, furniture, fixtures, fittings, motor vehicles (other than buses), stores or spares being disposed of with a view to replacement in the ordinary course of business), the disposal of which would result in an increase in the cost of the Bus Service
nor shall the Grantee without the previous written consent of the Commissioner cause or permit the forfeiture, surrender, loss, destruction or dissipation of its right, title or interest in the whole or any part of its Undertaking referred to in Clauses 22(3)(a) and (b) above. The Grantee shall observe and perform all the terms, conditions, covenants and provisions contained in any deed, agreement and other instrument under which the Grantee acquired the right, title or interest in the whole or any part of its Undertaking.
PROVIDED that: (i) consent to any disposition of landed property may be withheld if the consequence of the disposition would be to increase the cost to the Grantee of acquiring, using, holding or maintaining the premises referred to in section 19 of the Ordinance; and
(ii) consent required under this Clause shall not be unreasonably withheld or delayed.
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(4) Without prejudice to the Ordinance and other provisions of this franchise, the Grantee shall not develop or cause or permit the development of any land or buildings forming part of its Undertaking or enter into any agreement to do so without the previous written consent of the Financial Secretary (which, subject to Clause 22(5), shall not be unreasonably withheld or delayed).
(5) Notwithstanding any other provisions herein, consent to any disposition or development of any land or building under Clause 22(3) and (4) may be withheld by the Commissioner or the Financial Secretary if the consequence of the disposition or development of such land or buildings would be to increase the cost to the Grantee of acquiring, using, holding or maintaining premises referred to in section 19 of the Ordinance.
23. The Grantee shall not without the previous consent in writing of the Investment Commissioner invest in or dispose of any securities, such consent shall in securities not be unreasonably withheld or delayed.
24. (1) (a) The Grantee shall, at such times as the Commissioner may Contingency direct in writing, cause the Funds to be examined by an Fund and Appointed Actuary for the purpose of assessing possible Pension under-provisioning or over-provisioning of the Funds. Fund
(b) The Grantee shall provide such information and give access to such of its business and financial records as the Appointed Actuary may reasonably require.
(c) Any finding by the Appointed Actuary as to any under-provisioning or over-provisioning of the Funds shall be accepted as final and conclusive by the Grantee in the absence of manifest error.
(d) The Grantee shall, subject to the prior approval in writing of the Commissioner, write back such amount which is certified in an actuarial report prepared by the Appointed Actuary for the purpose of Clause 24(1)(a) to be over-provided in the Funds to the profit and loss account kept by the Grantee in respect of the Bus Service.
(2) The Grantee shall provide such information as the Commissioner may require in writing in respect of the Funds and their use within one month from the date of such request in writing by the Commissioner or within such other period as the Commissioner may reasonably require.
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(3) (a) The balance of the Contingency Fund shall represent liabilities in the accounts of the Grantee and shall not contribute towards its distributable profit or accrue to the benefit of shareholders of the Grantee.
(b) Notwithstanding the expiry of this franchise and any other terms or provisions herein, the balance of the Contingency Fund shall remain a liability in the accounts of the Grantee and shall not contribute towards its distributable profit or accrue to the benefit of shareholders of the Grantee and the balance of the Contingency Fund as at the expiry of this franchise, howsoever determined, shall be deposited with an authorised institution, other than a deposit-taking company, within the meaning of the Banking Ordinance (Cap. 155) as approved or directed from time to time by the Commissioner.
(c) The Commissioner may within six months prior to the expiry of this franchise or within three months thereafter appoint a trustee or a custodian to hold the Contingency Fund after the said expiry of this franchise and may require the title to the Contingency Fund to be vested in the said trustee or custodian for a period of ten years from the date of expiry of this franchise (“the ten-year period”). In such event, the said trustee or custodian shall:
(i) hold the Contingency Fund in accordance with the terms and conditions as may be determined or approved by the Commissioner;
(ii) apply the balance of the Contingency Fund to meet third party claims against the Grantee in accordance with the terms and conditions as may be determined or approved by the Commissioner; and
(iii) distribute the remaining balance in the Contingency Fund (if any) at the expiry of the ten-year period to the shareholders of the Grantee whose names appear on the register of shareholders of the Grantee on the date when the Contingency Fund is vested in the said trustee or custodian.
(d) For the avoidance of doubt, this Clause, in so far as it relates to the Contingency Fund, shall survive the expiry of this franchise until the date falling ten years thereafter.
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(4) The Grantee shall procure in such manner as it may be advised by the Appointed Actuary that the Pension Fund is held by an independent trustee under a retirement scheme registered under the Occupational Retirement Schemes Ordinance (Cap. 426) and, where applicable, the Mandatory Provident Fund Schemes Ordinance (Cap. 485).
25. (1) By virtue of section 13 of the Ordinance, the Chief Executive in Revenue and Council may review the scale of fares to be charged for the Bus expenditure Service and may determine and adjust such scale of fares upward or downward at any time and from time to time during the Franchise Period as he deems fit.
(2) Without derogation from the provisions of section 13 of the Ordinance and the powers conferred on the Chief Executive in Council thereunder, in making recommendations to the Chief Executive in Council for him to determine the scale of bus fares under the provisions of section 13 of the Ordinance, the Commissioner may have regard, inter alia, to:
(a) changes in Gross Revenue and Service-Related Expenditure since the last fare adjustment;
(b) forecasts of future Gross Revenue, Service-Related Expenditure, and return on average net fixed assets which takes into account net profit or loss and borrowing costs after tax attributable to the Bus Service;
(c) the need to provide the Grantee with a reasonable rate of return;
(d) public acceptability and affordability;
(e) the quality and level of the public bus service provided by the Grantee; and
(f) changes in price of cost elements and improvement in productivity of the franchised bus industry.
(3) In applying for an upward or downward adjustment to the fares applicable to its Bus Service, the Grantee shall take into account, inter alia, the factors specified in Clause 25(2)(a) to (f).
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PART IV
MISCELLANEOUS
26. (1) When acquiring new buses and setting specifications for such Environmentally acquisition, the Grantee shall, as far as reasonably practicable: friendly buses
(a) adopt the latest commercially available and proven technologies to reduce noise emissions; and
(b) acquire the most environmentally friendly buses in terms of vehicle exhaust emission (with the ultimate objective of acquiring zero emission buses), that are technologically proven and commercially available
taking into account feasibility in terms of operational and passenger service requirements and affordability for the Grantee and passengers.
(2) The Grantee shall adopt, at such times and in such manner, such commercially available and proven technologies and products on its buses as the Commissioner may reasonably specify after consultation with the Grantee for the purpose of reducing exhaust and noise emissions in the operation of the Bus Service.
27. (1) The Grantee shall comply with all the provisions, stipulations Forward and requirements set out in a Forward Planning Programme for Planning the time being in force. Programme
(2) If the Grantee fails to comply with any of the provisions, stipulations and requirements contained in a Forward Planning Programme, the Grantee shall, within such time as may be specified by the Commissioner, submit a report to the Commissioner with full details and the reasons for such failure.
28. (1) The Grantee shall: Operational records and (a) provide to the Commissioner the information relating to information to and records kept by the Grantee in respect of the Bus be supplied to Service in accordance with Schedule II; and Commissioner
(b) provide and maintain at such times and in such manner as may be specified by the Commissioner, including without limitation electronic means to enable the Commissioner to at all times access and directly retrieve the information and records referred to under Clause 28(1)(a).
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(2) The Grantee shall without delay provide in writing to the Financial Commissioner such information as he may from time to time information to reasonably require for the purpose of assessing the financial be supplied to position of the Grantee, including without limitation: the Commissioner (a) accounting system manual and costing system manual used by the Grantee for the preparation of accounts for the Bus Service; and
(b) procurement policies, procurement procedures and practice manual of goods and services relating to the Bus Service including but not limited to fuel, buses, spare parts, tyres and tubes, plant and machinery, repair and maintenance and cleaning services.
(3) The Grantee shall provide in writing to the Commissioner with financial information for the purpose of assessing the financial position of the Grantee, including without limitation:
(a) annual audited financial statements prepared and certified by a Qualified Auditor within four months after the close of each accounting year;
(b) monthly management accounts (including profit and loss account, balance sheet and cashflow statement) in such form and manner as the Commissioner may specify within two months from the ending date of the period concerned or such longer period as the Commissioner may specify; and
(c) monthly report on the fuel price, fuel cost, fuel consumption, hedging contracts on fuel, in such form and manner as the Commissioner may specify, within two months from the ending date of the period concerned.
(4) (a) Subject to the provisions of the Ordinance, this franchise and the accounting policies approved by the Commissioner under Clause 28(4)(b), the Grantee shall prepare and keep its accounts related to the Bus Service in accordance with the prevailing accounting standards and principles generally accepted in Hong Kong.
(b) The Grantee shall, not later than three months before the end of each accounting year, submit for the approval of the Commissioner the accounting policies governing the accounts of the Grantee which are related to the Bus Service in the form and manner as the Commissioner may specify. Such approval shall not be unreasonably withheld or delayed. The Grantee shall comply with such accounting policies as approved by the Commissioner for
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keeping and preparing its accounts relating to the Bus Service. The Grantee shall not make any change to the accounting policies approved by the Commissioner hereunder without the prior written approval of the Commissioner. Such accounting policies are subject to the provisions of the Ordinance and this franchise, and unless agreed otherwise between the Grantee and the Commissioner, shall be in accordance with the prevailing accounting standards and principles generally accepted in Hong Kong.
(5) Without prejudice to the generality of Clause 28(4), the Commissioner may give direction as to the criteria for apportionment of the Grantee's general administration costs between the Bus Service and the Grantee’s other businesses.
(6) The Grantee shall ensure that contracts that are material to the Bus Service shall be put out for Open Tendering as far as practicable. Where it is not practicable for Open Tendering, prior approval for not pursuing Open Tendering shall be sought from the Grantee’s board of directors. The Grantee is also required to specify in any internal paper on procurement of services or goods or both whether or not the tenderers or suppliers and the Grantee are Related Parties.
(7) The Grantee shall obtain approval from the Grantee’s board of directors before awarding any contract that is material to the Bus Service to a Related Party of the Grantee save and except where such award is effected as a result of an Open Tendering process participated by any third party which is not a Related Party. In seeking the board of directors’ approval to award a contract to a Related Party of the Grantee without going through an Open Tendering process, the Grantee shall, in so far as practicable, provide relevant information to satisfy its board with supporting evidence that the terms and conditions of the proposed contract are no less favourable to the Grantee than those in a contract which might otherwise be entered into with a third party which is not a Related Party of the Grantee.
(8) The Grantee shall procure and provide to the Commissioner financial information on all transactions which are related to the Bus Service made between the Grantee and any Related Party of the Grantee on an annual basis within five months after the close of each accounting year or as the Commissioner may from time to time require.
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29. (1) The Grantee shall keep separate accounts for the Bus Service Publication of and its other businesses. The accounts of the Grantee which accounts and are related to the Bus Service shall be audited annually by a operational Qualified Auditor and published for the information of the information public, in such form and manner as the Commissioner may from time to time require, within five months after the close of each accounting year.
(2) The Grantee shall publish for the information of the public such records kept by the Grantee which are related to the Bus Service, in such form and manner as the Commissioner may from time to time require after consultation with the Grantee within five months after the close of each accounting year.
30. (1) Any notice in writing or other document to be given to the Notices Grantee by the Chief Executive in Council, the Financial Secretary, the Secretary for Transport and Housing, the Government or the Commissioner under or in relation to this franchise may be given under the hand of any duly authorised officer of the Government and may be served by sending the same in a letter addressed to the registered office of the Grantee.
(2) Any notice in writing or other documents to be given to the Chief Executive in Council, the Financial Secretary, the Secretary for Transport and Housing, the Government or the Commissioner by the Grantee under or in relation to this franchise may be served by sending the same in a letter to the Commissioner.
31. All meetings of the board of directors of the Grantee shall be held in Board Hong Kong unless all the directors of the Grantee unanimously agree meetings in to have a meeting elsewhere. Hong Kong
32. (1) Without derogation from any provisions of the Ordinance, this Mid-term franchise will be subject to review at any time and from time to review time by the Commissioner during the Franchise Period starting from and including 1 July 2021. For this purpose, the Grantee shall comply without delay with all reasonable requests by the Commissioner and afford such assistance and co-operation in all respects to facilitate the conduct of the review as the Commissioner may reasonably require.
(2) Without prejudice to the generality of Clause 32(1) and any other provisions of this franchise, the Grantee shall, for the purpose of this Clause:
Page 25 of 33
(a) upon request by the Commissioner, provide without delay to the Commissioner such information as may be reasonably required; and
(b) appoint a person with such qualification or experience as the Commissioner may from time to time require to examine such aspects of the Bus Service as he may reasonably direct.
(3) During the period of such review, the Commissioner may consult with and receive written submissions or recommendations from such persons as he sees fit.
33. The Grantee shall publish its code on corporate social responsibility Corporate within six months from the Commencement Date and, annually social thereafter: responsibility
(a) publish the achievement of individual items contained therein; and
(b) review and update its content for the purpose of continuous improvement.
34. The Grantee shall, throughout the Franchise Period, submit to the System audit Commissioner annually a report prepared by a Qualified Auditor or a Certification Body certifying that the Grantee has put in place internal control systems and procedures which are adequate to enable, as far as practicable, the Grantee to measure and record, in all material respects, its operation statistics and other information to ensure that such statistics and other information which may be required by the Commissioner under the Ordinance or this franchise are accurate in all material respects and if the Qualified Auditor or Certification Body forms the view that those control systems and procedures are not adequate, the nature and extent of such inadequacies.
Dated this 28th day of March 2017
COUNCIL CHAMBER Clerk to the Executive Council
Page 26 of 33
SCHEDULE I Clause 22(1) Grantee’s Undertaking (As at 1 July 2017)
1. Buses
(A) Requirement Number of Buses Operating Requirement Required in Fleet
(i) For operating the Bus 3,622 Service
(ii) Total requirement for 3,916 operating the Bus Service based on 92.5% availability
(B) The requirement for buses in paragraph 1(A) above will be represented by:
Bus Fleet Number Average Age Estimated Nature of (Year) Written Down Interest Value (HK$) (1) Single Deck air-conditioned 164 6.5 147,140,000 Wholly Owned
(2) Double Deck
2-/3-axles air-conditioned 3,752 8.2 4,627,810,000 Wholly Owned
Total fleet 3,916 8.1 4,774,950,000
2. Land and Buildings Approx. Site Estimated Written Nature of Interest Area (m2) Down Value (HK$)
(A) Depots 266,700,000
( 1) A depot at Tuen Mun 10,554 Leasehold for a term TMTL 81 of years expiring on 30.6.2047
Page 27 of 33
(2) A depot at Tuen Mun 10,880 Leasehold for a term TMTL 82 of years expiring on 30.6.2047
(3) A depot at Shatin STTL 21,070 Leasehold for a term 241 of years expiring on 30.6.2047
(4) A depot at Kowloon Bay 21,470 Leasehold for a term NKIL 5801 of years expiring on 30.6.2047
(5) A depot at West 23,300 Short term Kowloon Reclamation tenancy. Seven KX 2536 years certain from 10.2.2009 and thereafter quarterly
(B) Bus Parking Areas 69,300,000
(1) KX 877 Yuet Lun Street, 7,431 Short term Lai Chi Kok tenancy. Three for bus parking years certain from 1.4.1983 and thereafter quarterly
(2) STT 665 Area 4A, 14,250 Short term Sheung Shui tenancy. One for refueling and bus year certain from parking 1.10.1987 and thereafter quarterly
(3) STT 1342 Area 14, 10,900 Short term Tin Shui Wai tenancy. Five for refueling and bus years certain from parking 1.7.1995 and thereafter quarterly
(4) STT 981 Area 16, 20,000 Short term Tuen Mun tenancy. Three for bus parking years certain from 1.8.1998 and thereafter quarterly
(5) STT 1676 Area 13, 2,180 Short term Tin Shui Wai tenancy. Three
Page 28 of 33
for bus parking years certain from 23.10.2000 and thereafter quarterly
(6) STT 3683 K&T Area 16, 23,600 Short term Tsing Yi tenancy. Three for refueling and bus years certain from parking 1.8.2007 to 31.7.2010 and thereafter quarterly until 1.7.2017 (7) STT 1097 Dai Fuk 18,700 Short term Street, Tai Po tenancy. Three for refueling and bus years certain from parking 22.12.2000 and thereafter quarterly
(8) STT 1229 Fo Tan, 9,170 Short term Shatin tenancy. Two for bus parking years certain from 19.5.2003 and thereafter quarterly
(9) STT 2545 Wang Lok 3,670 Short term Street, Yuen Long for tenancy. Three bus parking years certain from 1.12.2011 and thereafter quarterly
(10) SX 4125 Area 26, 7,480 Short term Tseung Kwan O for tenancy. A term refueling and bus certain from parking 1.2.2012 to 1.7.2017 and thereafter quarterly
(11) STT 2575 Fuk Wang 5,590 Short term Street for refueling and tenancy. Five bus parking years certain from 19.2.2013 and thereafter quarterly or co-terminus with the franchise
Page 29 of 33
(12) STT 2567 Wang Lee 4,170 Short term Street for bus parking tenancy. Three years certain from 19.2.2013 and thereafter quarterly
3. Machinery and Equipment Estimated Written Nature of Down Value (HK$) Interest
Machinery and equipment including: 23,200,000 Wholly Owned
(A) Underground oil tank & lubricating equipment (B) Air-conditioning plant (C) Waste water treatment plant (D) Motor tyre retreading machine (E) Forklift truck (F) Welding machine (G) Mobile crane (H) Folding machine (I) Drilling machine (J) Shearing machine (K) Grinder (L) Forklift (M) Hot water cleaner (N) Bandsaw machine (O) Cutting machine (P) Brake lining turning machine (Q) Lathe (R) Air operated lift table (S) Pump test bench (T) Air dryer (U) Hydraulic scissor lift (V) Post service lift (W) Metal cleaning machine (X) Tyre changer (Y) Mobile column lift (Z) Injector calibrator (AA) Portable dynamometer (AB) Hydraulic press (AC) Electric stand stacker (AD) Fame cooling system flushing machine (AE) Parts cleaning machine
Page 30 of 33
(AF) Air compressor, air controllers (AG) Auto fare collection equipment (AH) Spray booth (AI) Brake tester (AJ) Engine dynamometer (AK) Gearbox test bench (AL) Smoke tester (AM) Recovery recycling system (AN) Electrical test bench
4. Other Fixed Assets Estimated Written Nature of Down Value (HK$) Interest
Other fixed assets including:
(A) Other vehicles 16,100,000 Wholly Owned Water tankers Trucks Vans Training buses Patrol cars Private cars
(B) Computer equipment and software 37,900,000 Wholly Owned
(C) Furniture and other equipment 16,100,000 Wholly Owned
(D) Passenger facilities, 16,800,000 Wholly Owned termini and passenger shelters
(E) Octopus System 700,000 Wholly Owned
(F) Major motor vehicle components 165,000,000 Wholly Owned
5. Others Estimated Written Nature of Down Value (HK$) Interest
Spare parts and stores 112,100,000 Wholly Owned
Page 31 of 33
SCHEDULE II
Information and Records Relating to the Bus Service to be Kept and Provided by the Grantee under Clause 28(1)
Item Records and Information (a) the number of passengers carried on every day on each specified route.
(b) the number of passengers boarding and alighting at bus stops and the occupancy of buses when leaving each of the stops at hourly interval on each specified route as collected by surveys or any other means as the Commissioner may specify after consultation with the Grantee. For the purpose of this Clause, the Grantee shall collect such information at least once in each year on a weekday, other than a public holiday or a day on which the storm signal Number 8 (or higher) or a black rainstorm warning is issued.
(c) the number of passengers and the occupancy of buses when leaving such stops at half-hourly interval on any of the specified routes as the Commissioner may specify.
(d) the number of buses in use on each specified route on every day and the carrying capacity of each of such buses for the purpose of or in connection with this franchise.
(e) the journey time for journeys between terminal points on each specified route as reflected from the survey hereinafter mentioned. For the purpose of this Clause, the Grantee shall conduct surveys at such times and in such manner as the Commissioner may specify.
(f) (i) the scheduled and actual departure time of each journey on every day on each specified route, where the scheduled departure time refers to the time when the journey departs from the terminus in accordance with the Schedule of Service of each specified route; and
(ii) the actual departure time of adjusted journey departs from the designated stop.
(g) the number of scheduled journeys, actual journeys and additional journeys operated by the Grantee on every day on each specified route in each of the periods of a day specified by the Commissioner, where the number of scheduled journeys refers to the number of journeys that shall be operated by the Grantee in accordance with the Schedule of Service of each specified route.
(h) the number of scheduled journeys that the Grantee fails to operate on every day on each specified route due to vehicle breakdown, vehicle shortage, driver shortage, traffic congestion, accidents, inclement weather, public events, redeployment of buses and others, or any other categorisation of reasons as specified by the Commissioner.
(i) the carrying capacity and technical specifications of buses kept by the Grantee for the
Page 32 of 33
purpose of or in connection with this franchise in each calendar month.
(j) the number of buses of each bus type and other vehicles used and the number of buses ordered by the Grantee for the purpose of or in connection with this franchise in each calendar month.
(k) the number of journeys and total kilometres travelled with breakdowns of revenue-generated kilometres and non-revenue-generated kilometres on each specified route on every day.
(l) the number of bus driver duties scheduled to operate all specified routes in accordance with the Schedule of Service on a day required by the Commissioner and the percentage of bus drivers, selected on the sample size as specified by the Commissioner, in compliance with the guidelines on arrangements in relation to working hour and rest time of bus drivers issued by the Commissioner after consultation with the Grantee.
(m) the number of bus drivers at the end of each calendar month required and available to operate all specified routes in accordance with the Schedule of Service; and the surplus or shortage of bus drivers.
(n) the total number of bus drivers resigned, retired, separated with other reasons, newly recruited and re-employed in each calendar month.
(o) the daily receipts from the passengers carried on every day on each specified route.
(p) the maintenance schedule of the buses.
(q) the maintenance schedule of other vehicles and inventory of stores.
Page 33 of 33 Annex B
Summary of Findings of Passenger Opinion Survey on KMB’s Service
Very Dissatisfied Service Performance satisfied & & very No comment Aspects satisfied dissatisfied
1. Overall quality of service 85.1% 14.9% -
2. Comfort of buses 85.5% 13.5% 1.0%
3. Facilities on buses 90.8% 8.3% 0.9%
4. Passenger information 81.2% 14.6% 4.2%
5. Reliability of bus 63.6% 35.5% 0.9% services
6. Driving performance 87.7% 11.0% 1.3%
7. Staff attitude 89.0% 9.0% 2.0%
8. Effort on environmental 73.3% 19.9% 6.8% protection
Note : Survey period was from 11 to 30 November 2015. Total number of respondents was 2 600, which is equivalent to an overall response rate of 82.1%. Annex C
Clauses and Service-related Commitments of the Most Recently Granted Franchises
KMB will fully take on board the clauses and commitments adopted in the two most recently granted franchises in 2015 (i.e. the franchises for Citybus Limited (Franchise for Hong Kong Island and Cross-Habour Bus Network) and New Lantao Bus Company (1973) Limited), details of which are set out below -
Bus service
The new franchise will empower the Commissioner to require KMB to provide facilities and installation for enhancement of bus safety, and provide a barrier-free and elderly-friendly travel environment. Specific initiatives are as follows -
Service quality
(i) adopting bus design with barrier-free and friendly features for the elderly and people with disabilities when setting specifications for new buses. Major ones include low-floor and wheelchair accessible designs, provision of wheelchair parking spaces and the associated safety restraint system, designated priority seats for persons in need, enhanced railing design, easily reached pushed buttons, bus stop announcement system, and large electronic destination and route number display panels;
(ii) providing facilities and installation to further enhance safety, such as facilities and installation that can reduce potential fire hazards on all new buses. All buses of KMB will be retrofitted with such facilities by end-2021;
(iii) allowing foldable bicycles, which are properly folded and bagged, and will not cause any hazard to other passengers, to be carried on board; and
(iv) providing passenger seating facilities at newly-built covered bus stops as far as practicable.
Passenger information
(i) the new franchise will enhance the regulatory power of the Commissioner over the type, form and manner of information to be provided by KMB to passengers to ensure provision of suitable service information to passengers through better means; and
(ii) providing real-time bus arrival information through website and smartphone application, and installing display panels at suitable bus stops in phases for disseminating such information.
Enhancement of government regulation
The new franchise will require KMB to publish the service pledge, setting out a reasonable timeframe for responding to complaints and suggestions from the public, as well as the achievement rate of its passenger service pledge;
The new franchise will strengthen regulation over the financial and accounting arrangements of KMB, for example, by specifying more clearly in the franchise the calculation of depreciation of fixed assets; and
The new franchise will require KMB to conduct open tendering for all material procurement contracts as far as practicable, and to seek prior approval of the Board of Directors if open tendering cannot be arranged.
Improvement in environmental performance
The new franchise will require KMB, as far as reasonably practicable, to acquire the most environmentally-friendly buses in terms of exhaust emissions that are technologically proven and commercially available, with the ultimate objective of switching to zero emission buses. To further improve roadside air quality, KMB is also required to deploy low emission buses (buses of emission standards of EURO IV or above) for operation at low
- 2 - emission zones in Central, Causeway Bay and Mong Kok as delineated by the Environmental Protection Department.
* * *
- 3 - Annex D
Routes under New Fare Concession Schemes to be Introduced by KMB
Page
Table 1： Long-haul routes fare concession scheme 2 – 4 for full-time students (routes meeting the qualifying criteria of the scheme as at 28 February 2017)
Table 2： Routes to be covered under the new 5 interchange concession scheme with Hong Kong Tramways Limited
Routes to be covered under new BBI concession schemes within KMB’s network
Table 3A： List of routes 6 – 8
Table 3B： Detailed information 9 – 10
Cross-district routes and shuttle routes with fares for short-haul trips to be aligned
Table 4A： List of routes 11 – 13
Table 4B： Detailed information 14 – 16
Table 1 : Long-haul routes fare concession scheme for full-time students (80 routes meeting the qualifying criteria of the scheme as at 28 February 2017)
KMB Route Terminating Location 52X Tuen Mun Central – Mong Kok (Park Avenue) 58X Leung King Estate – Mong Kok East Station 59X Tuen Mun Pier Head – Mong Kok East Station 60X Tuen Mun Central – Jordan (To Wah Road) 61X Tuen Mun Central – Kowloon City Ferry 62X Tuen Mun Central – Lei Yue Mun Estate 63X Hung Shui Kiu (Hung Fuk Estate) – Jordan (To Wah Road) 66X Tai Hing – Olympic Station 67X Siu Hong Court – Mong Kok East Station 68X Hung Shui Kiu (Hung Fuk Estate) – Mong Kok (Park Avenue) 69C Tin Shui Wai (Tin Yan) – Kwun Tong Ferry 69X Tin Shui Wai (Tin Shui) – Jordan (To Wah Road) 74C Kau Lung Hang – Kwun Tong Ferry 74D Kau Lung Hang – Kwun Tong Ferry 74E Tai Mei Tuk – Kwun Tong Ferry 252B Handsome Court – Tsim Sha Tsui 258D Po Tin – Lam Tin Station 258P Hung Shui Kiu (Hung Fuk Estate) – Lam Tin Station 258S Shan King Estate – Lam Tin Station 258X Po Tin – Kwun Tong Ferry 259B Tuen Mun Pier Head – Tsim Sha Tsui 259C Sun Tuen Mun Centre – Tsim Sha Tsui 259D Lung Mun Oasis – Lei Yue Mun Estate 259X Lung Mun Oasis – Kwun Tong Ferry 260B Tuen Mun Central – Tsim Sha Tsui 260X Po Tin – Hung Hom Station 261 Sam Shing – Tin Ping Estate 261B Sam Shing – Kowloon Station 261P Ng Lau Road (Tsing Lun Road) – Tin Ping Estate 263 Tuen Mun Station – Sha Tin Station 265B Tin Heng Estate – Mong Kok (Park Avenue) 265S Tin Shui Wai Town Centre – Tai Po Industrial Estate 267X Siu Hong Court – Lam Tin Station 268B Long Ping Station – Hung Hom Ferry 268C Long Ping Station – Kwun Tong Ferry 268P Ma Wang Road – Kwun Tong Ferry 268X Hung Shui Kiu (Hung Fuk Estate) – Jordan (To Wah Road) 269B Tin Shui Wai Town Centre – Hung Hom Ferry
- 2 - KMB Route Terminating Location 269C Tin Shui Wai Town Centre – Kwun Tong Ferry 269D Tin Shui Wai (Tin Fu) – Lek Yuen 269S Tin Shui Wai Town Centre – Kwun Tong Ferry 270A Sheung Shui – Tsim Sha Tsui East (Mody Road) 270B Sheung Shui – Sham Shui Po 270C Luen Wo Hui – Tsim Sha Tsui East (Mody Road) 270D Luen Wo Hui – Sham Shui Po 270P Sheung Shui – Kowloon Station 270S Tsim Sha Tsui East (Mody Road) – Luen Wo Hui 271P Kau Lung Hang – Tsim Sha Tsui (Canton Road) 271X Tsim Sha Tsui (Middle Road) – Fu Heng 277E Tin Ping Estate – Lam Tin Station 277P Tin Ping Estate – Lam Tin Station 277X Luen Wo Hui – Lam Tin Station 278P Luen Wo Hui – Tsuen Wan (Nina Tower) 278X Sheung Shui – Tsuen Wan (Nina Tower) 279X Luen Wo Hui – Tsing Yi Station Sheung Shui – Central (Hong Kong Station Public Transport 373 Interchange) 603 Ping Tin – Central (Ferry Piers) 603P Central (Ferry Piers) – Ping Tin 603S Ping Tin – Central Sheung Shui – Central (Hong Kong Station Public Transport 673 Interchange) 934 Bayview Garden – Wan Chai 934A Allway Gardens – Wan Chai 935 Shek Lei (Tai Loong Street) – Wan Chai Lei Muk Shue Estate Public Transport Interchange – 936 Causeway Bay (Cotton Path) Kin Sang – Wan Chai (North) Temporary Public Transport 960 Interchange 960A Central (Worldwide House) – Hung Shui Kiu (Hung Fuk Estate) 960B Quarry Bay (King’s Road) – Hung Shui Kiu (Hung Fuk Estate) Hung Shui Kiu (Hung Yuen Road) – 960P Wan Chai (North) Temporary Public Transport Interchange Fu Tai Estate – Wan Chai (North) Temporary Public Transport 960S Interchange 960X Hung Shui Kiu (Hung Yuen Road) – Quarry Bay (King’s Road) Shan King Estate – Wan Chai (Hong Kong Convention and 961 Exhibition Centre) Leung King Estate – Wan Chai (Hong Kong Convention and 961P Exhibition Centre)
- 3 - KMB Route Terminating Location 968 Yuen Long (West) – Causeway Bay (Tin Hau) 968X Yuen Long (West) – Quarry Bay (King’s Road) Fanling (Wah Ming) – Wan Chai (North) Temporary Public 978 Transport Interchange Fanling (Luen Wo Hui) – Wan Chai (North) Temporary Public 978A Transport Interchange Fanling (Chi Fuk Circuit) – Wan Chai (North) Temporary 978B Public Transport Interchange B1 Tin Shui Wai (Tin Tsz) – Lok Ma Chau Station T270 Fanling (Cheung Wah) – Tsim Sha Tsui East (Mody Road) T277 Sheung Shui – Lam Tin Station
- 4 - Table 2 : Routes to be covered under the new interchange concession scheme with Hong Kong Tramways Limited (23 routes)
KMB Route Terminating Location 108 Kai Yip – Braemar Hill Sheung Shui – Central (Hong Kong Station Public Transport 373 Interchange) 603 Ping Tin – Central (Ferry Piers) 603P Central (Ferry Piers) – Ping Tin 603S Ping Tin – Central Sheung Shui – Central (Hong Kong Station Public Transport 673 Interchange) 934 Bayview Garden – Wan Chai 934A Allway Gardens – Wan Chai 935 Shek Lei (Tai Loong Street) – Wan Chai Lei Muk Shue Estate Public Transport Interchange – 936 Causeway Bay (Cotton Path) Kin Sang – Wan Chai (North) Temporary Public Transport 960 Interchange 960A Central (Worldwide House) – Hung Shui Kiu (Hung Fuk Estate) 960B Quarry Bay (King’s Road) – Hung Shui Kiu (Hung Fuk Estate) Hung Shui Kiu (Hung Yuen Road) – 960P Wan Chai (North) Temporary Public Transport Interchange Fu Tai Estate – Wan Chai (North) Temporary Public Transport 960S Interchange 960X Hung Shui Kiu (Hung Yuen Road) – Quarry Bay (King’s Road) Shan King Estate – Wan Chai (Hong Kong Convention and 961 Exhibition Centre) Leung King Estate – Wan Chai (Hong Kong Convention and 961P Exhibition Centre) 968 Yuen Long (West) – Causeway Bay (Tin Hau) 968X Yuen Long (West) – Quarry Bay (King’s Road) Fanling (Wah Ming) – Wan Chai (North) Temporary Public 978 Transport Interchange Fanling (Luen Wo Hui) – Wan Chai (North) Temporary Public 978A Transport Interchange Fanling (Chi Fuk Circuit) – Wan Chai (North) Temporary 978B Public Transport Interchange
- 5 - Table 3A : Routes to be covered under new BBI concession schemes within KMB’s network (80 routes) – List of Routes
KMB Route Terminating Location 1 Chuk Yuen Estate – Star Ferry 1A Sau Mau Ping (Central) – Star Ferry 2 So Uk – Star Ferry 2D Chak On Estate – Tung Tau Estate 2F Tsz Wan Shan (North) – Cheung Sha Wan 3C Tsz Wan Shan (North) – China Ferry Terminal 3D Tsz Wan Shan (Central) – Kwun Tong (Yue Man Square) 5M Kai Tak (Tak Long Estate) – Kowloon Bay Station (circular) 6 Lai Chi Kok – Star Ferry 6D Ngau Tau Kok – Mei Foo 7 Lok Fu – Star Ferry 11B Kwun Tong (Tsui Ping Road) – Kowloon City Ferry 11C Chuk Yuen Estate – Sau Mau Ping (Upper) 11D Lok Fu – Kwun Tong Ferry 12A Whampoa Garden – Cheung Sha Wan (Sham Mong Road) 14 Lei Yue Mun Estate – China Ferry Terminal 15 Ping Tin – Hung Hom Ferry 16 Lam Tin (Kwong Tin Estate) – Mong Kok (Park Avenue) 16M Kwun Tong Station – Lam Tin (Hong Wah Court) (circular) 17 Kwun Tong (Yue Man Square) – Oi Man 24 Kai Yip – Mong Kok (circular) 28B Kai Tak (Kai Ching Estate) – Choi Fook 38 Kwai Shing (East) – Ping Tin 40 Tsuen Wan (Hoi On Road) – Laguna City 42C Cheung Hang – Lam Tin Station 57M Shan King Estate – Lai King (North) 58M Leung King Estate – Kwai Fong Station 58P Kwai Fong Station – Tin King Estate (Tin Yue House) 59M Tuen Mun Pier Head – Tsuen Wan Station 60M Tuen Mun Station – Tsuen Wan Station 61M Yau Oi (South) – Lai King (North) 61X Tuen Mun Central – Kowloon City Ferry 62X Tuen Mun Central – Lei Yue Mun Estate 66M Tai Hing – Tsuen Wan Station 67M Siu Hong Court – Kwai Fong Station 69C Tin Shui Wai (Tin Yan) – Kwun Tong Ferry 74A Tai Wo – Kai Yip 74X Tai Po Central – Kwun Tong Ferry 75X Fu Shin Estate – Kowloon City Ferry
- 6 - KMB Route Terminating Location 80 Mei Lam – Kwun Tong Ferry 80P Hin Keng – Kwun Tong Ferry 80X Chun Shek – Kwun Tong Ferry 81K Sun Tin Wai – Sui Wo Court 82K Mei Lam – Wong Nai Tau 83A Shui Chuen O – Kwun Tong Ferry 83X Wong Nai Tau – Kwun Tong Ferry 84M Chevalier Garden – Lok Fu 85X Ma On Shan Town Centre – Hung Hom Ferry 87D Kam Ying Court – Hung Hom Station 88X Fo Tan Station – Ping Tin (circular) 89 Lek Yuen – Kwun Tong Station 89B Sha Tin Wai – Kwun Tong Station 89C Heng On – Kwun Tong (Tsui Ping Road) 89D Wu Kai Sha Station – Lam Tin Station 89X Sha Tin Station – Kwun Tong Station 91M Po Lam – Diamond Hill Station Diamond Hill Station / Choi Hung Station – Hong Kong 91P University of Science and Technology 98A Hang Hau (North) – Ngau Tau Kok Station (circular) 203C Tai Hang Tung – Tsim Sha Tsui East (Mody Road) 211 Tsui Chuk Garden – Wong Tai Sin Station (circular) 219X Laguna City – Tsim Sha Tsui (circular) 258D Po Tin – Lam Tin Station 258P Hung Shui Kiu (Hung Fuk Estate) – Lam Tin Station 258S Shan King Estate – Lam Tin Station 259D Lung Mun Oasis – Lei Yue Mun Estate 260C Sam Shing – Kwai Fong Station 268C Long Ping Station – Kwun Tong Ferry 269C Tin Shui Wai Town Centre – Kwun Tong Ferry 276B Tin Shui Wai (Tin Fu) – Sheung Shui (Choi Yuen) 277E Tin Ping Estate – Lam Tin Station 277P Tin Ping Estate – Lam Tin Station 277X Luen Wo Hui – Lam Tin Station 281A Kwong Yuen – Kowloon Station 288 Shui Chuen O – Sha Tin Central (circular) Choi Ming – Tsuen Wan West Station Public Transport 290 Interchange Choi Ming – Tsuen Wan West Station Public Transport 290A Interchange Tseung Kwan O Industrial Estate – Tsuen Wan West Station 290B Public Transport Interchange
- 7 - KMB Route Terminating Location LOHAS Park Station Public Transport Interchange – Tsuen Wan 290X West Station Public Transport Interchange 296A Sheung Tak – Ngau Tau Kok Station (circular) B1 Tin Shui Wai (Tin Tsz) – Lok Ma Chau Station
- 8 - Table 3B : Routes to be covered under new BBI concession schemes within KMB’s network (80 routes) – Detailed Information
Routes involved in new BBI concession Direction of Proposed interchange Group scheme Discount destination location First leg Second leg 1 28B 38, 40, 42C, 62X, New Kwun Tong Road $4.2 258D, 259D, 268C, Territories (Millennium City) 269C West 74A, 74X, 80, 80X, New Kwun Tong Road 83A, 83X, 89, 89B, Territories (Millennium City) / Wang 89C, 89D, 89X, East Chiu Road (near Lam Wah 277E, 277P, 277X Street) 38, 40, 42C, 62X, 28B Kwun Tong / Kwun Tong Road (Ngau Tau 258D, 259D, 268C, Kowloon City Kok Station) / Ngau Tau Kok 269C Road (Lotus Tower) 74A, 74X, 80, 80X, Kwun Tong Road (Ngau Tau 83A, 83X, 89, 89B, Kok Station) / Ngau Tau Kok 89C, 89D, 89X, Road (Lotus Tower) / Wang 277E, 277P, 277X Chiu Road (near Lam Wah Street) 2 17 15, 16, 16M Lam Tin Kwun Tong Town Centre $4.2 15, 16, 16M 17 Ho Man Tin 3 219X 1, 1A, 2, 6, 7 Kowloon West Nathan Road (near Middle $4.2 Road) 1, 1A, 2, 6, 7 219X Laguna City 4 5M 1A, 3D, 11B, 11C, Kwun Tong / Kwun Tong Road (Kowloon $4.2 11D, 14, 15, 16, 17 Lam Tin Bay Station) 1A, 3D, 11B, 11C, 5M Kai Tak $3.8 11D, 14, 15, 16, 17 5 24 1, 1A Tsim Sha Tsui Prince Edward Road West $4.2 (Heep Woh Primary School) 1, 1A 24 Kai Yip Sai Yee Street (Queen Elizabeth School) 6 211, 2F, 3C 38, 40, 42C, 62X, Kwun Tong Lung Cheung Road (Wong $4.2 69C, 74A, 80, 80P, Tai Sin Shopping Centre / 89, 89B, 258D, 258P, Shatin Pass Road) 258S, 259D, 268C, 269C 61X,75X,85X Kowloon City 84M Lok Fu 38, 40, 42C, 62X, 211, 2F, 3C Chuk Yuen / Lung Cheung Road (Wong $3.8 – 69C, 74A, 80, 80P, Tsz Wan Shan Tai Sin Shopping Centre / $4.2 89, 89B, 258D, Shatin Pass Road) 258P, 258S, 259D, 268C, 269C 61X,75X,85X 84M
- 9 - Routes involved in new BBI concession Direction of Proposed interchange Group scheme Discount destination location First leg Second leg 7 2F, 3C 211 Chuk Yuen Lung Cheung Road (Wong $3.8 Tai Sin Shopping Centre / Shatin Pass Road) 211 2F, 3C Tsz Wan Shan $4.2 8 203C 2D, 12A, 6D, 87D, Kwun Tong / Boundary Street (Caritas $4.2 281A Kowloon City Lodge) / Prince Edward / Tsim Sha Tsui Road West (Diocesan Boys’ School) 9 91P 91M Diamond Hill Clearwater Bay Road (Choi $6.1 Station Hung Station) 10 98A, 296A 88X, 89, 89B Sha Tin / Kwun Tong Road $4.2 Fo Tan (Millennium City) / Kwun Tong Road (Ngau Tau Kok Station) 88X, 89, 89B 98A, 296A Tseung Kwan Kwun Tong Road (Ngau Tau O Kok Station) 11 290, 290A, 290B, 57M, 58M, 58P, 59M, Tuen Mun Chung On Street / Castle $4.2 290X 60M, 61M, 66M, Peak Road (Tsuen Wan 67M, 260C Station) 57M, 58M, 58P, 290, 290A Tseung Kwan Chung On Street 59M, 60M, 61M, O 66M, 67M, 260C 12 288 81K Sun Tin Wai / Sha Tin Town Centre $4.2 Sui Wo Court 82K Mei Lam / Pok Hong Wong Nai Tau 81K 288 Shui Chuen O Sha Tin Town Centre 82K Pok Hong 13 B1 276B Tin Shui Wai Lok Ma Chau (San Tin) $4.9 North Public Transport Interchange
- 10 - Table 4A: Cross-district routes and shuttle routes with fares for short-haul trips to be aligned (77 routes) – List of Routes
KMB Route Terminating Location 1A Sau Mau Ping (Central) – Star Ferry 2F Tsz Wan Shan (North) – Cheung Sha Wan 3C Tsz Wan Shan (North) – China Ferry Terminal 11C Chuk Yuen Estate – Sau Mau Ping (Upper) 23M Lok Wah – Shun Lee (circular) 26M Choi Hung – Kwun Tong (circular) 30 Allway Gardens – Cheung Sha Wan 30X Allway Gardens – Whampoa Garden Tsuen Wan West Station Public Transport Interchange – Shek 31 Lei (circular) 34 Kwai Shing (Central) – Bayview Garden 35A On Yam – Tsim Sha Tsui East Tsuen Wan West Station Public Transport Interchange – Lei 36 Muk Shue Estate Public Transport Interchange (circular) Lei Muk Shue Estate Public Transport Interchange – 36A Cheung Sha Wan (Sham Mong Road) Lei Muk Shue Estate Public Transport Interchange – 36B Jordan (To Wah Road) 37 Kwai Shing (Central) – Olympic Station 38 Kwai Shing (East) – Ping Tin Tsuen Wan West Station Public Transport Interchange – Allway 39A Gardens (circular) 40 Tsuen Wan (Hoi On Road) – Laguna City 40X Wu Kai Sha Station – Kwai Chung Estate 46X Hin Keng – Mei Foo 47X Chun Shek – Kwai Shing (East) 48X Wo Che – Bayview Garden 49X Kwong Yuen – Tsing Yi Ferry 57M Shan King Estate – Lai King (North) 58M Leung King Estate – Kwai Fong Station 58P Kwai Fong Station – Tin King Estate (Tin Yue House) 61M Yau Oi (South) – Lai King (North) 61X Tuen Mun Central – Kowloon City Ferry 67M Siu Hong Court – Kwai Fong Station 68E Yuen Long Park – Tsing Yi Station 72 Tai Wo – Cheung Sha Wan 72A Tai Wai Station – Tai Po Industrial Estate 72X Tai Po Central – Mong Kok (Park Avenue) 73X Tsuen Wan (Nina Tower) – Fu Shin Estate
- 11 - KMB Route Terminating Location 74A Tai Wo – Kai Yip 74B Kowloon Bay – Tai Po Central 74D Kau Lung Hang – Kwun Tong Ferry 74P Kwun Tong Ferry – Tai Po Central 74X Tai Po Central – Kwun Tong Ferry 75X Fu Shin Estate – Kowloon City Ferry 80 Mei Lam – Kwun Tong Ferry 82K Mei Lam – Wong Nai Tau 85K Heng On – Sha Tin Station 85M Kam Ying Court – Wong Tai Sin (circular) 85X Ma On Shan Town Centre – Hung Hom Ferry 86 Wong Nai Tau – Mei Foo 86C Lee On – Cheung Sha Wan 86K Kam Ying Court – Sha Tin Station 86S Kam Ying Court – Sha Tin Station 87D Kam Ying Court – Hung Hom Station 89D Wu Kai Sha Station – Lam Tin Station 234X Bayview Garden – Tsim Sha Tsui East (Mody Road) 235 On Yam – Tsuen Wan (circular) 258D Po Tin – Lam Tin Station 258X Po Tin – Kwun Tong Ferry 259D Lung Mun Oasis – Lei Yue Mun Estate - 259X Lung Mun Oasis – Kwun Tong Ferry - 261 Sam Shing – Tin Ping Estate 263 Tuen Mun Station – Sha Tin Station 265S Tin Shui Wai Town Centre – Tai Po Industrial Estate 271 Fu Heng – Tsim Sha Tsui (Canton Road) 271B Tsim Sha Tsui (Middle Road) – Fu Heng 271X Tsim Sha Tsui (Middle Road) – Fu Heng 274P Wu Kai Sha Station – Tai Po Industrial Estate 274X Kwun Tong Ferry – Tai Po Central 277E Tin Ping Estate – Lam Tin Station 277P Tin Ping Estate – Lam Tin Station 277X Luen Wo Hui – Lam Tin Station 279X Luen Wo Hui – Tsing Yi Station 286C Lee On – Sham Shui Po 286M Ma On Shan Town Centre – Diamond Hill Station (circular) 286X Hin Keng – Sham Shui Po (circular) Kin Sang – Wan Chai (North) Temporary Public Transport 960 Interchange 960A Central (Worldwide House) – Hung Shui Kiu (Hung Fuk Estate) 960B Quarry Bay (King’s Road) – Hung Shui Kiu (Hung Fuk Estate)
- 12 - KMB Route Terminating Location Shan King Estate – Wan Chai (Hong Kong Convention and 961 Exhibition Centre) Fanling (Wah Ming) – Wan Chai (North) Temporary Public 978 Transport Interchange
- 13 - Table 4B: Cross-district routes and shuttle routes with fares for short-haul trips to be aligned (77 routes) – Detailed Information
Reference route within Routes Road section with fare for short-haul trips Existing New District district for involved to be aligned fare fare determining the new fare Wong Tai 11C From Fung Tak Road to Chuk Yuen $5.8 211 $3.8 Sin (Fung Tak Park) Estate 2F, 3C From Lung Cheung Road to Tsz Wan Shan $5.1 3M $4.3 (Wong Tai Sin Shopping Centre) Kwun 38 From Kwun Tong Road to Ping Tin $6.4 15, 15A, $4.5 Tong (Yue Man Square) 16M 11C, 1A From Kwun Tong Road to Sau Mau Ping $4.5 13M $4.3 (Yue Man Square) 23M From Mut Wah Street to Shun Lee $4.9 23 $4.5 26M From Tung Yan Street to Shun Lee $4.9 23 $4.5 Sha Tin 49X, 86 From Sha Tin Centre to Wong Nai Tau $5.8 83K $4.5 Street (Sha Tin Central Bus Terminus) 46X, 286X From Mei Tin Road (Tai to Hin Keng $5.8 88K $4.7 Wai Station) 80, 82K From Mei Tin Road to Mei Lam $5.6 - 88K $4.7 (Holford Gardens) $5.8 85K From Hang Shun Street to Heng On / $5.1 81C, 43X, $4.3 (Chevalier Garden) Yiu On 89C 40X, 85M, From A Kung Kok Street to Wu Kai Sha / $6.1 - 87K $4.3 85X, 86C, (Tsung Tsin Lee On $6.4 86K, 87D, Secondary School) 89D, 286M, 86S, 286C Tai Po 72X, 73X, From Tai Po Road to Tai Po Centre / $5.1 71K $4.7 74X, 74B, (Kwong Fuk Estate) Fu Heng / 74P, 75X, Fu Shin 271, 271B, 271X, 274X 72, 74A From Tai Po Road to Tai Wo $5.8 71K $4.7 (Kwong Fuk Estate) 72A, 265S From Tai Po Road to Tai Po $5.1 - 73 $4.7 (Kwong Fuk Estate) Industrial $15.1 Estate 274P From Kwong Fuk Road to Tai Po $7.9 73 $4.7 (Wong Shiu Chi Industrial Secondary School) Estate
- 14 - Reference route within Routes Road section with fare for short-haul trips Existing New District district for involved to be aligned fare fare determining the new fare North 277X, 279X From San Wan Road to Luen Wo Hui $4.7 278K $3.5 (Fanling Town Centre)
261, 277E, From San Wan Road to Tin Ping $4.7 270 $3.5 277P (Sheung Shui Station) Tsuen 36 From Wo Yi Hop Road to Lei Muk Shue $4.3 36M $4.0 Wan (Ho Fung College) 36A, 36B From Wo Yi Hop Road to Lei Muk Shue $5.6 - 36M $4.0 (Wo Yi Hop Road $5.8 Sports Ground) 30, 39A, 30X From Castle Peak Road to Allway $4.3 - 39M $3.5 (Fu Wah Street) Gardens $6.4 34, 40, 48X, From Castle Peak Road to Bayview $5.0 - 34M $3.8 234X (Kin Ming Street) Garden $6.4 Kwai 37, 38, 47X From Tai Wo Hau Road to Kwai Shing $4.3 37M $3.8 Tsing (Kwai Hong Court) 34 From Kwai Shing Circuit to Kwai Shing $5.0 37M $3.8 (Lam Woo Memorial Secondary School) 235 From Wo Yi Hop Road to On Yam $4.3 235M $4.0 (Lei Muk Road Park) 35A From Wo Yi Hop Road to On Yam $5.6 235M $4.0 (near Ta Chuen Ping Street) 31 From Castle Peak Road to Shek Lei $4.3 31M $4.0 (near Ping Lai Path) 68E, 279X From Tsing Yi Road West to Tsing Yi $11.1 - 249X $4.3 (opposite to Ching Station $15.0 Wah Court) Tate’s 74B, 74P, From Tate’s Cairn Tunnel to Tai Po Centre $10.1 72 $9.6 Cairn 74X, 75X, Toll Plaza Tunnel 274X 74D From Tate’s Cairn Tunnel to Kau Lung $14.8 277X $12.0 Toll Plaza Hang Lion 72X From Lion Rock Tunnel to Tai Po Centre $10.1 72 $9.6 Rock Toll Plaza Tunnel 74A From Lion Rock Tunnel to Tai Wo $10.5 72 $9.6 Toll Plaza Tai Lam 978 From Tai Lam Tunnel Bus to Wah Ming $18.0 279X $15.0 Tunnel Interchange Bus Inter- change
- 15 - Reference route within Routes Road section with fare for short-haul trips Existing New District district for involved to be aligned fare fare determining the new fare Tuen Mun 57M, 58M, From Tuen Mun Road to Tuen Mun $9.1 - 59M, 59X, $8.4 Road 58P, 61M, Bus-Bus $18.4 60M, 60X, Bus-Bus 61X, 67M, Interchange 66M, 66X, Inter- 258D, 258X, 67X, 260X change 259D, 259X, 263, 960, 961 960A, 960B From Tuen Mun Road to Hung Shui Kiu $15.2 63X $8.7 Bus-Bus Interchange
- 16 - Annex E
Implications of the New Franchise
Economic Implications
In 2016, KMB had an average daily patronage of about 2.7 million, accounting for over two-thirds of daily passenger trips on franchised buses and over 20% of the daily passenger trips of all public transport in Hong Kong. The granting of a new franchise of ten years to KMB will facilitate its long-term planning, development and investment of bus services. This will ensure continuity in the provision of reliable and efficient bus services to the community. The general public will benefit from the fare concession schemes and other service enhancement initiatives to be introduced by KMB.
Environmental Implications
2. To help improve roadside air quality, the existing condition on the acquisition of new buses in the franchise will be amended to the effect that KMB will acquire the most environmentally-friendly buses in terms of vehicle emissions (with the ultimate objective of acquiring zero emission buses) that are technologically proven and commercially available, after taking into account the feasibility, as well as affordability of KMB and passengers. With the bus replacement cycle entering its peak in the coming years, it is anticipated that KMB will need to make a substantial investment of about $3.8 billion for purchasing 1 380 new buses (around 35% of its current fleet) in the coming five years for replacing older buses and further enhancing its service, which will further improve the environmental performance of KMB’s fleet.
Family Implications
3. Needy families will benefit under KMB’s new franchise in a number of ways. Specifically, the trial for accommodating two wheelchair passengers on the lower deck of super-low-floor buses and the introduction of two “H” routes will bring convenience to persons with disabilities and elderly passengers, thereby helping families involved in caring for family members in these two categories. The long-haul route fare concession scheme for full-time students will also help reduce the overall transport expenses of families with students commuting on the applicable bus routes.
Sustainability Implications
4. The granting of a new franchise to KMB will ensure the provision of reliable and efficient public bus services to the travelling public, which is essential to the sustainable development of the community.
* * *
- 2 - Annex F
Follow-up on Public’s Views on the Requirements of KMB’s New Franchise
In the course of discussion on the new franchise with KMB, TD has followed up with KMB on the major views canvassed from the public consultation on the new franchise. The following suggestions raised by the public will be implemented through new franchise conditions or specific commitments made by KMB –
A. Service quality (including passenger facilities and information) - to provide free Wi-Fi service in bus compartments (see paragraph 11(a) of the Brief); - to enhance passenger waiting environment at bus stops, termini and major bus interchanges (see paragraphs 11(b) and (c) of the Brief); - to provide information on seat vacancy in upper deck (see paragraph 11(e) of the Brief); - to provide more comprehensive barrier-free facilities, bus stop announcement system and low-floor buses (see “Bus service – Service quality” of Annex C); and - to allow carriage of foldable bicycles on board (see “Bus service – Service quality” of Annex C).
B. Fare concessions - to introduce new fare concession schemes (see paragraph 12(a) of the Brief); - to provide more BBI concession schemes (see paragraph 12(b) of the Brief); and - to provide more section fares (see paragraph 12(c) of the Brief).
C. Environmental initiative - to use more environmentally-friendly buses (see “Improvement in environmental performance” of Annex C).
D. Government regulation on bus service - to stipulate more clearly the timeframe for responding to passenger complaints and enquiries (see “Enhancement of government regulation” of Annex C).
2. Regarding audio-visual broadcasting in bus compartments, there is at present a requirement for the sound volume of audio-visual broadcasting systems to be comparable with the ambient level, with a difference of no more than 2 dB. In addition, a “quiet zone” should be designated at the rear part of the lower deck of a bus. During public consultation on the new franchise for KMB, some members of the public expressed views on the sound volume of the systems. As the existing regulatory arrangements for audio-visual broadcasting systems are applicable to all bus operators, TD has been exploring improvement measures with all operators through established channels. Starting from mid-2017, the “quiet zone” on the franchised buses will be expanded to cover the entire lower deck. TD will continue to regulate the sound volume of the audio-visual broadcasting systems and follow up on the views of passengers through established mechanism.
3. During the public consultation period, we also received some comments on the arrangements concerning the Franchise Accounts (on aspects such as handling of advertising revenue, revenue from the disposal of property/land and fuel expenses). The scope of “operating receipts” under the Franchise Accounts is defined in section 26 of the Ordinance, which is equally applicable to all six bus franchises. Specifically, the provision stipulates that any other revenue, including revenue from advertisements, derived from the use of fixed assets by a grantee, is to be regarded as operating receipts and shall be included in the Franchise Accounts. Such non-fare box revenue may help relieving fare pressure. The same provision also stipulates that the proceeds of the sale of investments or fixed or other assets shall not be included in the Franchise Accounts. Meanwhile, according to the requirements of the respective franchises (including KMB’s existing franchise), all grantees have to publish a booklet of “Fuller Disclosure” annually to disclose their operational and financial information over the past year for public monitoring. This requirement will continue to be included in the new franchise of KMB.
4. As regards views on permitting the carriage of pets on buses, the existing Public Bus Services Regulations (Cap. 230A) stipulates that no
- 2 - animal shall be permitted to be carried on the bus (other than a guide dog accompanying a blind person). Due to the limited space in a bus compartment and the crowdedness during certain periods of the day, in considering whether passengers are to be permitted to carry their pets on board buses, we have to strike a balance among various factors, including the reaction of pets in a crowded and confined environment as well as the impact on other passengers. We will continue to keep in view the public views on this issue so as to consider whether there should be any changes to the existing arrangements.
5. As regards views on other issues, such as staff management (including bus captains’ training and rest time arrangements), monitoring of service frequencies, route planning, general facilities and passenger information, daily bus operations, fare structure and adjustment arrangements, as well as enhancement of public engagement, TD will continue to follow up with KMB through established channels with a view to further enhancing service quality.
* * *
- 3 - 香港添馬添美道二號政府總部東翼二十一樓 21/F, East Wing, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong 電話 Telephone 3509 8198 傳真 Fax 3904 1774 Annex G
2 March 2017
Professor the Honourable Anthony Cheung, GBS, JP Secretary for Transport and Housing 22/F, East Wing Central Government Offices 2 Tim Mei Avenue Tamar Hong Kong
Dear Professor Cheung,
New Franchise for the Bus Network of the Kowloon Motor Bus Company (1933) Limited
The current franchise for the bus network of the Kowloon Motor Bus Company (1933) Limited (“KMB”) will expire on 1 July 2017. This Committee discussed at its meetings on 26 January 2016, 28 June 2016 and 16 February 2017 the matters related to the new franchise. This letter sets out this Committee’s advice to the Chief Executive (“CE”) in Council.
Factors for consideration
During the discussions on the matters related to the new franchise, this Committee considered various factors in making a recommendation to CE in Council. These factors include -
(1) legal and other requirements concerning the grant of bus franchises;
(2) performance of the grantee concerned;
(3) passengers’ opinion on the service of the grantee concerned; and - 2 -
(4) new franchise terms and commitments agreed to be adopted by the grantee concerned.
(1) Legal and other requirements governing the grant of bus franchises
According to the Public Bus Services Ordinance (“the Ordinance”) (Cap. 230), CE in Council may grant to a registered company a franchise conferring the right to operate public bus service for a period not exceeding 10 years. A grantee is required to maintain a proper and efficient public bus service to the satisfaction of the Commissioner for Transport during the franchise period. As per the established practice, a grantee that is able to prove its ability to provide a proper and efficient service and is willing to further invest in franchised bus operation may be considered for being granted of a franchise for a period of 10 years. The new franchise will commence upon the expiry of the current franchise.
(2) Performance of the grantee
This Committee noted that since the commencement of its current franchise in 2007, KMB had been providing proper and efficient services (in respect of service reliability, safety standard, service quality as well as environmental performance) to the satisfaction of the Commissioner. During its current franchise, KMB has actively enhanced its service and rationalised bus routes to meet passenger demand. Meanwhile, KMB is willing to further invest in franchised bus operation, including making an investment of around $3.8 billion for bus fleet replacement in the coming five years.
(3) Passengers’ opinion on the service of KMB
The Transport Department commissioned an independent survey in November 2015 to gauge passengers’ opinions on the service of KMB. The results show that 85% of the respondents are satisfied with the overall service quality provided by KMB. With regard to the comparatively lower satisfaction level on environmental performance and service regularity, this Committee noted that the new franchise would require KMB to acquire the most environmentally friendly buses in terms of exhaust emissions and deploy low emission buses (buses of emission - 3 - standards of EURO IV or above) to operate in the low emission zones delineated by the Environmental Protection Department. As for service reliability, this Committee learnt that KMB’s overall lost trip rate has encouragingly decreased from the peak level of 8.0% in 2011 to 1.6% in 2016 (up to November).
(4) New franchise terms and commitments agreed to be adopted by KMB
This Committee noted that according to the established practice, the Government would request a grantee to take on board franchise terms and commitments of the most recently granted franchises, and would introduce new franchise terms and commitments as appropriate, having regard to the changing circumstances as well as the operating situation of an individual grantee and passenger demand. To this end, KMB has agreed to fully take on board the new franchise terms of and commitments on service/facility enhancement made under the two most recently granted franchises (i.e. franchises of Citybus Limited (Franchise for Hong Kong Island and Cross-Harbour Bus Network) and New Lantao Bus Company (1973) Limited granted in 2015). Such terms and commitments are mainly about enhancing service quality, providing more passenger information, improving the environment, and strengthening government regulation.
Moreover, this Committee noted that KMB would further enhance its service quality under the new franchise to meet passengers’ needs. The major new measures included offering free Wi-Fi service in bus compartments, enhancing ancillary facilities and passenger waiting environment, upgrading ancillary facilities at bus stops and setting up more shelters, partnering with “Hong Kong eTransport” to provide real-time arrival information, providing information on seat vacancy of the upper deck, and improving transport for persons with disabilities and introducing hospital routes (i.e. “H” routes).
This Committee noted that KMB currently provided a variety of fare concessions to passengers (such as bus-bus interchange (“BBI”) concession schemes and section fares) which basically encompassed all of its regular routes, benefitting an average of about 630 000 passenger trips