Ferry fare: The Transport Department is scrutinising a Star Ferry fare rise application for its Hung Hom to Central and Wan Chai routes.

The Transport Department is scrutinising a Star Ferry fare rise application for its Hung Hom to Central and Wan Chai routes, at an average rate of 23%.

In a Legislative Council paper the department said the financial performance of the two routes has been unsatisfactory with accumulated losses of about $10 million recorded at the end of 2006. To cut the operating deficit, Star Ferry applied in June for fare rise for the two services ranging from 60 cents to $1.20.

When scrutinising the fare rise application, the department will consider the Star Ferry's financial condition, forecasts of changes in operating cost, revenue and return, its past performance, public acceptability of the proposed fares, and measures adopted to save cost and generate additional revenue.

The department said the vetting process will take several months.

Licence renewals

Meanwhile, the six major outlying island ferry services will see their licences expire in March.

They are the Central to Cheung Chau, Peng Chau, Mui Wo, Yung Shue Wan, So Kwu Wan, and the Peng Chau-Mui Wo-Chi Ma Wan-Cheung Chau routes.

The department will launch a tender exercise in August to select suitable ferry operators.

Service adjustments

In view of difficult operating conditions and low patronage, the department will adjust operation arrangements so effective and efficient ferry services for outlying islands can be maintained with fares at an acceptable level, while at the same time ensuring the services' financial viability.

The six ferry services will be grouped into two packages with adjoining routes forming one single package for tender and operation.

Package one covers services between Central and Cheung Chau, Peng Chau and Mui Wo, and the inter-islands services to be operated by one ferry operator. The Central-Peng Chau and Central-Mui Wo services will be merged into the Central-Peng Chau-Mui Wo service during non-peak hours. The inter-islands services will be shortened and transformed into a shuttle service between Mui Wo and Cheung Chau, with some sailings calling at Chi Ma Wan.

Greater flexibility

The package will enable cross-subsidy between routes and enhance their financial viability as a whole. It will help attract more potential tenderers and stabilise fares.

The operator can enjoy greater flexibility in fleet deployment to cater for upsurges in passenger demand during holidays.

Package two covers the Central-Yung Shue Wan and Central-Sok Kwu Wan services. It will be operated by one ferry operator to enable greater flexibility in fleet deployment in its daily operation.

On overnight sailings, the department said the service will be maintained but this will entail higher operating costs.

The department aims to have the new licences coming into effect in the second or third quarter of 2008.