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Official Record of Proceedings LEGISLATIVE COUNCIL ─ 1 June 2016 10803 OFFICIAL RECORD OF PROCEEDINGS Wednesday, 1 June 2016 The Council met at Eleven o'clock MEMBERS PRESENT: THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.M., G.B.S., J.P. THE HONOURABLE ALBERT HO CHUN-YAN THE HONOURABLE LEE CHEUK-YAN THE HONOURABLE JAMES TO KUN-SUN THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P. THE HONOURABLE LEUNG YIU-CHUNG THE HONOURABLE EMILY LAU WAI-HING, J.P. THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P. THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P. THE HONOURABLE TOMMY CHEUNG YU-YAN, G.B.S., J.P. THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P. THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P. THE HONOURABLE WONG KWOK-HING, B.B.S., M.H. 10804 LEGISLATIVE COUNCIL ─ 1 June 2016 PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P., Ph.D., R.N. THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P. THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P. THE HONOURABLE WONG TING-KWONG, S.B.S., J.P. THE HONOURABLE CYD HO SAU-LAN, J.P. THE HONOURABLE STARRY LEE WAI-KING, J.P. DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P. THE HONOURABLE CHAN HAK-KAN, J.P. THE HONOURABLE CHAN KIN-POR, B.B.S., J.P. DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P. DR THE HONOURABLE LEUNG KA-LAU THE HONOURABLE CHEUNG KWOK-CHE THE HONOURABLE WONG KWOK-KIN, S.B.S. THE HONOURABLE IP KWOK-HIM, G.B.S., J.P. THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P. THE HONOURABLE PAUL TSE WAI-CHUN, J.P. THE HONOURABLE ALAN LEONG KAH-KIT, S.C. THE HONOURABLE LEUNG KWOK-HUNG THE HONOURABLE ALBERT CHAN WAI-YIP LEGISLATIVE COUNCIL ─ 1 June 2016 10805 THE HONOURABLE WONG YUK-MAN THE HONOURABLE CLAUDIA MO THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P. THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P. THE HONOURABLE NG LEUNG-SING, S.B.S., J.P. THE HONOURABLE FRANKIE YICK CHI-MING, J.P. THE HONOURABLE WU CHI-WAI, M.H. THE HONOURABLE YIU SI-WING, B.B.S. THE HONOURABLE GARY FAN KWOK-WAI THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P. THE HONOURABLE CHARLES PETER MOK, J.P. THE HONOURABLE CHAN CHI-CHUEN THE HONOURABLE CHAN HAN-PAN, J.P. DR THE HONOURABLE KENNETH CHAN KA-LOK THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P. THE HONOURABLE KENNETH LEUNG THE HONOURABLE ALICE MAK MEI-KUEN, B.B.S., J.P. DR THE HONOURABLE KWOK KA-KI THE HONOURABLE KWOK WAI-KEUNG THE HONOURABLE DENNIS KWOK 10806 LEGISLATIVE COUNCIL ─ 1 June 2016 THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P. DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG DR THE HONOURABLE HELENA WONG PIK-WAN THE HONOURABLE IP KIN-YUEN DR THE HONOURABLE ELIZABETH QUAT, J.P. THE HONOURABLE MARTIN LIAO CHEUNG-KONG, S.B.S., J.P. THE HONOURABLE POON SIU-PING, B.B.S., M.H. THE HONOURABLE TANG KA-PIU, J.P. DR THE HONOURABLE CHIANG LAI-WAN, J.P. IR DR THE HONOURABLE LO WAI-KWOK, S.B.S., M.H., J.P. THE HONOURABLE CHUNG KWOK-PAN THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P. THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S. THE HONOURABLE ALVIN YEUNG NGOK-KIU MEMBERS ABSENT: DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P. THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S. THE HONOURABLE LEUNG CHE-CHEUNG, B.B.S., M.H., J.P. THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P. LEGISLATIVE COUNCIL ─ 1 June 2016 10807 PUBLIC OFFICERS ATTENDING: THE HONOURABLE JOHN TSANG CHUN-WAH, G.B.M., J.P. THE FINANCIAL SECRETARY PROF THE HONOURABLE ANTHONY CHEUNG BING-LEUNG, G.B.S., J.P. SECRETARY FOR TRANSPORT AND HOUSING MR JAMES HENRY LAU JR., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY THE HONOURABLE GREGORY SO KAM-LEUNG, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT THE HONOURABLE RAYMOND TAM CHI-YUEN, G.B.S., J.P. SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS DR THE HONOURABLE KO WING-MAN, B.B.S., J.P. SECRETARY FOR FOOD AND HEALTH THE HONOURABLE PAUL CHAN MO-PO, M.H., J.P. SECRETARY FOR DEVELOPMENT MR RONALD CHAN NGOK-PANG, J.P. UNDER SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS CLERKS IN ATTENDANCE: MR KENNETH CHEN WEI-ON, S.B.S., SECRETARY GENERAL MISS ODELIA LEUNG HING-YEE, DEPUTY SECRETARY GENERAL MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL MS DORA WAI, ASSISTANT SECRETARY GENERAL 10808 LEGISLATIVE COUNCIL ─ 1 June 2016 PRESIDENT (in Cantonese): Will the Clerk please ring the bell to summon Members to the Chamber. (After the summoning bell had been rung, a number of Members entered the Chamber) TABLING OF PAPERS No. 99 ─ Report of changes made to the approved Estimates of Expenditure during the fourth quarter of 2015-16 Public Finance Ordinance : Section 8 No. 100 ─ Employees Retraining Board Annual Report 2014-15 Report No. 19/15-16 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments Report of the Bills Committee on Patents (Amendment) Bill 2015 ORAL ANSWERS TO QUESTIONS PRESIDENT (in Cantonese): Questions. First question. Franchised Buses and MTR Fare Adjustment Mechanisms 1. MR TANG KA-PIU (in Cantonese): President, the Government introduced in 2006 and 2007 for franchised buses and MTR respectively the Fare Adjustment Mechanisms (collectively referred to as "FAMs"), which provided for both upward and downward adjustments of fares, and it emphasized the objectivity and transparency of such mechanisms. However, in nearly a decade's time since the implementation of FAMs, fares of both the franchised buses and MTR have only gone up but never gone down, regardless of the economic environment of Hong Kong and the movements in energy prices. Some members of the public have queried that such mechanisms have failed to fully reflect the actual economic conditions, resulting in a continuous increase in their travelling expenses. In this connection, will the Government inform this Council: LEGISLATIVE COUNCIL ─ 1 June 2016 10809 (1) of the aspects of FAMs on which reviews or studies have been conducted by the authorities since the implementation of FAMs; whether such aspects included the objectivity and fairness of the mechanisms, the extent to which the data used were time-lagged, and the impacts of the fare adjustments made under FAMs on inflation rates and the burden on the public; if so, of the specific outcome of such reviews and studies; (2) of the respective numbers of times, since the implementation of FAMs, in which franchised bus companies and the MTR Corporation Limited offered fare concessions under the mechanisms, the projected amount of money to be given back to the passengers each time, and the details of the concessions concerned (including the concessionary periods, the number of trips made by the passengers benefited from the concessions, and whether there were monies left in the projected amounts to be given back to the passengers); and (3) as some members of the public have pointed out that the fare adjustment formulae under the existing FAMs are incomprehensive (e.g. they fail to reflect accurately the movements in energy prices and the data used are time-lagged, resulting in the fare adjustments pushing up inflation rates and creating a vicious cycle, etc.), whether the authorities will comprehensively revise the fare adjustment formulae and invite academics and stakeholders to join hands to take part in the reviews, with a view to making FAMs fairer and more objective; if so, of the details; if not, the reasons for that? SECRETARY FOR TRANSPORT AND HOUSING (in Cantonese): President, it is the Government's policy that public transport services should be run by the private sector in accordance with commercial principles for greater cost-effectiveness while its fares should be fair to both passengers and operators (Fair Fare). At the same time, we encourage operators to offer fare concessions as far as possible having regard to their operating and financial conditions, the nature of service of individual routes, and the needs of passengers. At the time of the Rail Merger in 2007, upon deliberations at the Legislative Council and approval at the shareholders' meeting of the MTR Corporation Limited (MTRCL), the MTRCL lost the fare autonomy it hitherto enjoyed, and fares are to be adjusted by adjusting fares by a direct-drive formula. The arrangement has become more objective and transparent. 10810 LEGISLATIVE COUNCIL ─ 1 June 2016 As for franchised buses, the current Fare Adjustment Arrangement (FAA) has been in place since 2006. Under this arrangement, a fare adjustment application would be determined by the Executive Council after considering an assessment based on a basket of six factors. One of the six factors is a formula with components similar to those included in the formula for fare adjustment of the MTRCL. Both formulae take into account changes in Nominal Wage Index (Transportation Section) and the Composite Consumer Price Index (CCPI), as well as increase in productivity. For details of the two adjustment mechanisms, please see Annex 1. My reply to the various parts of Mr TANG Ka-piu's question is as follows: Review of the MTR Fare Adjustment Mechanism (FAM) takes place once every five years. The first review in 2013 introduced multiple measures to expand the scope of consideration of the mechanism to include the Corporation's profitability level and service performance, as well as public affordability; and comprehensively enhanced monthly passes and related concessions to reduce passengers' burden.
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