**********************************************************
The Transport Advisory Committee (TAC) was briefed by the Administration at its special meeting today (April 13) on the proposed way forward for the merger of MTR and KCR systems.
䩕The TAC has discussed and offered its views on the Administration﷿s proposed way forward for the merger of MTR and KCR systems. Members noted that the proposed merger package has met the five parameters set by the Government for the rail merger蒅, TAC Chairman Ms Cheng Yeuk-wah said.
䩕The TAC supports the proposal for a rail merger as it will enhance the efficiency of the rail network and bring immediate benefits to the travelling public.蒅
The TAC has discussed the proposed Fare Adjustment Mechanism (FAM) and the fare reduction package.
䩕We welcome the proposed introduction of a FAM which will allow fares to go up or down in future according to a formula that is linked to the consumer price index, a wage index and, a productivity factor. Railway fares will be reduced on Day One of the rail merger and the FAM will apply on the basis of the reduced fares. The future fare adjustment process will be more objective, transparent and the adjustment more predictable. This is a major improvement to the existing arrangement whereby the railway corporations have fare autonomy.蒅
䩕Members welcome the proposal to reduce fares that will benefit 2.8 million daily passenger trips. Since transport expenditure for long-distance travellers are generally higher, members supported the proposal to provide far greater reduction to this categories of passengers to relieve their financial burden.蒅
䩕Members believe this reflects the public aspiration that more assistance should be offered to long distance travellers to encourage cross-district travelling to work蒅, Ms Cheng added.
䩕We are pleased to note that passengers on journeys with fares at $12 or above will get at least 10% reduction in their fares. Naturally, the more fare reduction, the more receptive the public would be to the merger package. We have suggested the Administration to continue to listen carefully to and take into account public views in moving forward.蒅
The TAC noted that the job security for all frontline staff of the two corporations would not be affected as it related to the merger. This would help ensuring the stability and safe operation of the railway systems.
䩕The TAC noted that the two railway corporations would conduct further studies on the human resource integration and would consult their staff on matters affecting the staff. Members suggested that staff matters should be handled carefully to ensure the safe and efficient operation of the railway service at all times.蒅
The TAC noted that the post-merger corporation would continue to be subject to the existing regulatory regime and would be required to maintain performance standards not lower than to-day.
䩕After the rail merger, the Hong Kong Railway Inspectorate will retain the statutory powers to inspect the railway and investigate into railway incidents and accidents. The service and safety of railways and railway operation will be ensured,蒅 Ms Cheng said.
The TAC was also briefed on the structure and financial terms for the proposed rail merger.
䩕We hope the merger package will be a fair and reasonable deal that could balance the interests of all stakeholders. If implemented, the rail merger will create a very strong Hong Kong-made railway operator who will be more competitive and in a better position than before to expand into the Mainland and overseas markets,蒅 Ms Cheng added.
Ends/Thursday, April 13, 2006
Issued at HKT 18:56
NNNN
