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Comprehensive Review of the Government Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities

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Comprehensive Review of the Government Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities Comprehensive Review of the Government Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities Final Report Contents (Page) Introduction 1 Overview of the $2 Scheme 3 Reimbursement under the $2 Scheme 16 Future Financial Commitments 17 Overseas Experience 20 Abuses and Misuses of the $2 Scheme 22 Public Engagement Sessions 26 Policy Options and Recommendations 32 Financial Implications and Sustainability 45 Support Systems and Resources 47 New Payment Systems 51 Conclusion 54 ii Appendices A: Distribution of Active Elder Cards and Journeys undertaken under the $2 Scheme by Year of Card Issue (October 2018) B: Distribution of Journey Numbers under the $2 Scheme by Cardholders (October 2018) C: Overall Public Transport Journeys in Hong Kong 2008-18 D: Elderly/ Persons with Disabilities Journeys under the $2 Scheme by Month 2016–18 E: DF Reimbursement 2012-18 F: Distribution of DF Payment per Cardholder (October 2018) G: Projection of Elderly/Persons with Disabilities Numbers to 2031 H: Projection of Elderly/Persons with Disabilities Journeys under the $2 Scheme to 2031 I: Projection of DF Payments to 2031 J: Summary of Public Transport Concessions for Elderly/Persons with Disabilities in Major Cities K: Summary of Overseas Experience on Fare Abuses L: Summary of Comments from Public Engagement Sessions M: Financial Implications of Different Policy Options iii Abbreviations A-Card Anonymous Card NFC Near Field Communication AEL Airport Express Line NGO Non-Governmental Organisation AUD Australian Dollar NLB New Lantao Bus C&SD Census and Statistics Department NSW New South Wales (Australia) CAD Canadian Dollar NWFB New World First Bus CNY Chinese Yuan NWFF New World First Ferry CSP Centralised Settlement Platform NYPD New York Police Department (USA) CSSA Comprehensive Social Security OCL Octopus Cards Limited Assistance CTB Citybus OECD The Organisation of Economic Co- operation and Development DA Disability Allowance P-Card Personalised Card DF Differential Fares PTFCSS Public Transport Fare Concession Scheme Section EMV Europay, Mastercard and Visa PTFSS Public Transport Fare Subsidy Scheme FB Franchised Bus PTO Public Transport Operator GBP British Pound QR Code Quick Response Code GDP Gross Domestic Product RS Residents' Bus GMB Green Mini Bus RMB Red Mini Bus HKT Hong Kong Tramways SCC Senior Citizen Card HKTB Hong Kong Tourism Board SWD Social Welfare Department KMB Kowloon Motor Bus TD Transport Department LRT Light Rapid Transit (Singapore) TfL Transport for London LW Long Win Bus TWD Taiwan Dollar LWB Labour and Welfare Bureau UK United Kingdom MER Monthly Exception Report UN United Nations MRT Mass Rapid Transit (Singapore) USD United States Dollar MTR Mass Transit Railway $2 Public Transport Fare Concession Scheme Scheme for the Elderly and Eligible Persons with Disabilities MTRC Mass Transit Railway Corporation iv Introduction 1. Since 2012, the Government has progressively introduced a Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities (the $2 Scheme), which is applicable to elderly persons aged 65 or above and Persons with Disabilities for travelling on designated public transport services. As planned, the $2 Scheme is due for a review after an initial period of operation and in August 2018 the Labour and Welfare Bureau (LWB) commissioned Asia Consulting Group Limited to conduct a review of the $2 Scheme. 2. This Study Report details the findings and recommendations of the Review, completed in early 2020. Unless otherwise stated, references to years in the report relate to calendar years, while monetary values are quoted in Hong Kong dollars in money of the day terms. Journey numbers indicated for the Elderly and Persons with Disabilities generally refer to those performed under the $2 Scheme only, and do not cover journeys on transport modes or routes outside the $2 Scheme. For presentational purposes, numeric figures are shown in rounded format and summation in tables may not add up to the totals due to rounding differences. Terms of Reference 3. The objectives of the consultancy are to review the effectiveness and sustainability of the existing Scheme and to examine possible enhancement opportunities for the future having regard to the underlying demographic trends, operational considerations, stakeholder aspirations, community interest and financial implications. 4. Having regard to these objectives, our terms of reference for the assignment encompass: To review the current Scheme and evaluate its effectiveness in meeting its policy objective; To project the long term financial implications of the $2 Scheme under different scenarios as regards eligibility criteria and inclusion of additional transport modes and routes, with different adjustment mechanisms for the concessionary fare; To review the advantages, feasibility and financial implications of different models of making payment to the transport operators; To assess the long term sustainability of the $2 Scheme and explore possible enhancement opportunities in streamlining its operation, improving arrangements for compliance monitoring, accounting and reimbursement settlement; To review the effectiveness of existing anti-abuse measures, including possibly quantifying the abuses and their revenue implications, and examine improvement opportunities through imposing appropriate administrative measures; To assess the implications of new electronic payment systems on the $2 Scheme, as regards its use, security, cost and risk of abuse; To conduct public engagement sessions for different community and stakeholder groups, analysing their views and summarise relevant findings; 1 To conduct a literature review on similar schemes in other jurisdictions to identify good practices that may be applicable under Hong Kong circumstances. Work Carried Out 5. The Review has been conducted in two phases, with the first started off with a background research on relevant literature and overseas experiences, evaluating the performance of the $2 Scheme since its introduction in 2012, and assessing the feedback from different stakeholder groups as regards the operation of the $2 Scheme and the opportunities for its future enhancement. The final phase, which culminated in the submission of this Final Report, has focused on developing viable options to enhance the offerings under the $2 Scheme, and developing recommendations to help improve effectiveness and efficiency in its future operation. Background research 6. At an early stage of the Review, we have examined the existing literature available on the subject as provided by LWB and the Transport Department (TD). These include policy papers, agreements setting out operational arrangements with Octopus Card Limited (OCL) and the public transport operators (PTOs), regular reports from OCL, as well as patronage statistics, differential fare (DF) reimbursement records, monthly exception reports (MERs), field survey reports, etc. 7. In addition, we have examined some corporate documents of the PTOs, e.g. annual reports and website information to better understand their operations. Related public documents of trade associations have been reviewed, as well as research or statistics of international agencies. News reporting on relevant study matters has also been monitored, e.g. developments in the use of new electronic payment systems in the public transport sector. 8. The background research has also covered reviewing overseas experiences from which Hong Kong may be able to draw reference. We have researched relevant practices in 13 cities in Asia, Australia, Europe and North America, and collected a broad range of practical information which has provided useful references when considering possible enhancements to the $2 Scheme. Public engagement 9. Shortly after the commencement of the Review, separate presentations have been made to the Elderly Commission and the Social Welfare Advisory Committee to brief them on the scope and approach of the Review and to seek feedback from their membership. 10. To collect initial views from stakeholders and the wider community as to the advantages and disadvantages of the current Scheme, and the areas which can be improved upon, we have undertaken 5 public engagement sessions in collaboration with LWB and TD. These sessions have all been planned and executed smoothly, and a wide range of useful comments and suggestions have been made by the participants. Together they cover the full range of stakeholder groups, including PTOs currently on the $2 Scheme or not on the $2 Scheme, concern groups on the elderly and Persons with Disabilities, and members of District Councils, Area Committees and Rural Committees. 2 11. There is also some subsequent media reporting on the subject following the public engagement sessions, providing further insights into the subject from a community perspective. To supplement the engagement sessions, we have conducted follow up interviews with selected stakeholders. Performance Assessment 12. On the basis of the available data, we have examined the performance of the $2 Scheme since its introduction, including the profiles of the beneficiary, their travelling trends and patterns, and the relevant financials. The task has also included an assessment on the effectiveness of the $2 Scheme in promoting more travelling among the elderly and Persons with Disabilities, thus enhancing the social inclusion of these groups in the community. To provide a baseline reference, we have projected
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