Toll increase for the Eastern Harbour Crossing

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The Government announced today (March 11) that in respect of the arbitration on the toll increase of the Eastern Harbour Crossing (EHC), the arbitrators have determined that tolls for private cars and taxis of EHC be increased by $10 from $15 to $25 with corresponding increases for other vehicles.

"We are very disappointed at the outcome of the arbitration and are extremely concerned about the toll increase," a government spokesman said.

"However, the Administration has to respect the law and the result of the arbitration. We note that the New Hong Kong Tunnel Company Limited has its own commercial considerations. As required under the EHC Ordinance, the Commissioner for Transport shall amend the toll schedule in the Ordinance according to the award as soon as is practicable," he added.

The new tolls for the EHC will take effect from May 1, 2005. After some discussions with NHKTC, it has agreed to defer the toll increases for empty taxis to July 1 and the toll increase for light buses to October 1, 2005, respectively.

To minimise traffic congestion at the Cross-Harbour Tunnel on the initial period of the toll increase, the Transport Department appeals to people to make more use of public transport and to avoid the peak hours as far as possible.

Section 55(3)(a) of the EHC Ordinance provides that the tolls specified in the Schedule to the Ordinance may be varied by agreement between the Chief Executive-in-Council and the tunnel company. If an agreement cannot be reached, either party may submit the question of the variation of tolls to arbitration.

In 2002, the New Hong Kong Tunnel Company Limited, franchisee of EHC, applied for a toll increase. The Chief Executive-in-Council rejected the toll increase application. In August, 2003, the company sought an arbitration on the toll increase.

The arbitrators' award was received in late January, 2005. In their award, the arbitrators awarded a $10 increase for private cars and taxis with corresponding increases for other vehicles.

"After revision of the EHC tunnel toll, taxi passengers using the EHC for trips not beginning from a cross-harbour taxi stand should continue to pay $40 in addition to the meter fare, comprising $25 of tunnel toll and a fixed return toll surcharge of $15," the spokesman added. "Any change in the taxi return tunnel toll surcharge will require legislative amendment to be made by the Chief Executive-in-Council.

"We will consult the taxi trade, the Transport Advisory Committee and the Legislative Council Panel on Transport as to whether the return tunnel toll surcharge needs to be revised.

"We will proceed with the necessary legislative procedures if the taxi return tunnel toll surcharge is to be revised and will announce the new arrangements after the legislative procedures have been completed," the spokesman said.

Government may increase tolls at Cross-Harbor tunnel
Dennis Ng, Hong Kong Standard
March 19, 2005

Transport chief Sarah Liao said on Friday she has not ruled out the possibility of raising tolls at the busy Cross-Harbor tunnel in a bid to reduce traffic congestion.

Her remarks came one day after suggestions that the government may buy back both the Eastern and Western harbor tunnels to reduce discrepancies in tolls. However Liao, Secretary for the Environment, Transport and Works, said the government will have to carefully study the issue before making any move to increase toll charges.

The first hint of a higher toll at the central crossing came earlier in the day from Permanent Secretary for the Environment, Transport and Works Joshua Law who told the Legislative Council's transport panel that the government may be forced to do so if talks with the other two tunnel operators failed. ``We will consult with Legco and various parties if we want to increase toll charges at the Cross-Harbor Tunnel,'' he said, adding that the government needed the support of lawmakers.

Lawmakers unanimously passed a motion criticizing the operator of the Eastern tunnel for insisting on increasing toll charges from May 1 and for neglecting public interest. They also called on the government to come up with a proposal within one month on how to deal with traffic problems resulting from the increase in Eastern toll charges.

The original motion before the Legco panel called on the government to review the toll charges of all three harbor tunnels, bearing in mind public interest, and to study the feasibility of buying out the two privately owned tunnels within a year. The motion also urged the Eastern tunnel operator to defer the toll increases for 12 months to allow for negotiations.

However, after discussing it with other lawmakers, Tam Yiu-chung changed the motion, urging the government to submit a proposal within one month on how it intends to resolve the cross-harbor traffic problem.

Eastern Harbor Crossing, which is 70.8 per cent owned by the mainland conglomerate Citic Pacific, announced earlier this month that it will increase the toll for private cars from HK$15 to HK$25 from May 1.

There will be proportionate in-creases for other vehicles.

The decision to increase charges followed an award by arbitrators after the government had rejected earlier proposals to increase tolls.

Simon Cheng, operations manager of the New Hong Kong Tunnel Co said, however, if tolls are not increased now there will have to be an even bigger increase at a later stage.

Democratic Party legislator Andrew Cheng criticized the government for not acting sooner to regulate the tunnels.

He said he had first brought up the problem of uneven cross-harbor traffic in 1993 when the Western Harbor Crossing was opened.

He said he had made several proposals but was told the government could not reach an agreement with tunnel operators. Liberal Party legislator Selina Chow told fellow members to be fair and not to blame the government simply because it had followed the "rules of the game."

Another lawmaker, Li Fung-ying, wanted to know why the government said it was opposed to the toll increase yet is doing nothing to stop it.

Tunnel toll rises spark protests by DAB, drivers
Dennis Ng, Hong Kong Standard
March 21, 2005

A planned two-thirds increase in Eastern Harbor Crossing tolls sparked a weekend of drivers' protests across the political spectrum.

The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) organized a drive-slow protest of 20 vehicles from Kwun Tong to the entrance of the tunnel Sunday.

At the same time, about 40 commercial and public transport drivers staged a separate protest nearby.

On Saturday, 10 members of the Democratic Party towed a used car to a junction near the tunnel and smashed the windscreen with hammers as a demonstration of public outrage.

The Eastern Harbor Crossing, which is 71 percent owned by mainland conglomerate CITIC Pacific, will increase the toll for private cars by HK$10 to HK$25 from May 1.

Most vehicle types, including buses and lorries, will face a similar percentage increase.

However, tolls for empty taxis and minibuses will rise on July 1 and October 1, respectively.

At their Sunday protest, DAB lawmaker and Legco transport panel chairman Lau Kong-wah said the government has studied various options, including a buyout of the two privately owned tunnels, to make cross-harbor traffic more evenly distributed.

"It is reasonable to defer the toll increase for a year to allow talks between the government and the tunnel operators," Lau said.

He said other options included extending the franchise period to reduce the extent of each toll rise.

Last Friday, the transport panel passed a motion condemning the ``crazy increase'' and urging the operator to defer it.

CITIC Pacific did not react positively to the non-binding motion but insists the increase is reasonable.

Lau said he will urge CITIC Pacific to drop the toll increase and instead discuss the possibility of a government buyout.

DAB members drove Sunday from St Antonius Primary School in Kwun Tong along Lei Yue Mun Road to near the Administration Building at the Eastern Harbor Crossing.

At the same time, 40 drivers of container lorries, minibuses and taxis protested at a vacant lot near the tunnel.

Stanley Chiang, spokesman for Fuel Price Concerning Transportation Joint Conference that organized the demonstration, urged the tunnel operator not to raise its tolls.

If the operator insists on raising tolls, he said, drivers will not rule out stronger action, including strikes.

Hong Kong, Kowloon and New Territories Public and Maxicab Light Bus Merchants' United Association chairman Leung Hung said minibus drivers will have no choice but to pass the toll increase on to passengers.

He expects this will add about HK$1 to the fare for routes using the Eastern Harbor.

March 17, 2005
Government Press Release
Tunnel traffic measures under study

All possible fiscal and traffic management measures are being explored to better distribute cross-harbour traffic, the Environment, Transport & Works Bureau says.

Eastern tunnel tolls for cars and taxis will rise $10 to $25 from May 1. Corresponding increases will also be implemented for other vehicles. However, the tunnel company has agreed to defer increases for empty taxis until July 1, and those for minibuses to October 1.

The bureau said today it is very concerned with the impact of the toll increase on cross-harbour traffic and is studying the issue and noting public views.

The bureau will consider the likely financial implications and the need to preserve the value of public assets. It will keep an open mind, listen to public views and maintain dialogue with the tunnel franchisees.

LCQ 12:Eastern Harbour Crossing toll
Wednesday, April 20, 2005

Following is a question by the Hon Fung Kin-kee, Frederick and a written reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, at the Legislative Council meeting today (April 20):

Question:

Under the Eastern Harbour Crossing Ordinance (Cap. 215), the tolls for the Eastern Harbour Crossing ("EHC") may be varied by agreement between the Administration and the tunnel company. If an agreement cannot be reached, either party can submit the question of the variation of tolls to arbitration. The arbitrators shall be guided by the need to ensure that the carrying out by the tunnel company of its obligation, or the exercise of its rights under the Ordinance is reasonable but not excessively remunerative to the tunnel company, having regard to, inter alia, any material change in the economic conditions of Hong Kong since the enactment of the Ordinance or since the tolls were last determined. After its application for a toll increase was rejected by the Government last year, the tunnel company submitted the matter to arbitration. The arbitrators ruled in January this year that the level of reasonable but not excessive remuneration for the tunnel company was an internal rate of return ("IRR") on equity after tax of between 15% and 17% over the life of the franchise. The tunnel company was therefore entitled to increase the tolls in accordance with the arbitrators' ruling. In this connection, will the Government inform this Council whether it has assessed if:

(a) the IRR adopted in this ruling will become the only criterion for the EHC's future toll adjustments, making it a guaranteed rate of return in disguise, and hence rendering the legislative provision that the arbitrators shall, in making the arbitration award, have regard to the economic conditions of Hong Kong an empty clause; if it has made such an assessment, of the results and its measures to tackle the situation; if it has not made such an assessment, the reasons for that; and

(b) the operators of other road tunnels can similarly apply for toll adjustments on grounds that the relevant IRR has not been achieved; if the assessment result is in the affirmative, of its measures to tackle the situation?

Reply:

Madam President,

The award of the present arbitration is applicable to the present toll variation, and will not have binding effect on future toll variations. Any future toll increase application by the New Hong Kong Tunnel Company Limited (NHKTC), franchisee of EHC, will still require the agreement of the Chief Executive in Council according to section 55(3)(a) of the EHC Ordinance, and the Administration will take into account all relevant factors before making a decision. If no agreement on toll variation is reached between NHKTC and the Chief Executive in Council, NHKTC may submit the question of variation of tolls to arbitration.

The EHC Ordinance stipulates that the arbitrators shall be guided by the need to ensure that NHKTC is reasonably but not excessively remunerated, having regard to the considerations set out in section 55(4)(a)-(f) of the EHC Ordinance, which include any material change in the economic conditions of Hong Kong since the enactment of the EHC Ordinance or, as the case may be, since tolls were last determined.

The band of reasonable but not excessive remuneration to NHKTC was determined specifically in the context of the arbitration regarding NHKTC's current toll increase application for EHC. Any toll increase applications from the franchisees of other road tunnels will be considered on a case-by-case basis in accordance with the relevant provisions of the respective franchises.

LCQ12: Distribution of traffic among cross harbour tunnels
Wednesday, April 27, 2005

Following is a question by the Hon Lau Kong-wah and a written reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, at the Legislative Council meeting today (April 27):

Question:

It has been reported that a commercial group holding a portion of the interests in the Eastern Harbour Crossing and the Western Harbour Crossing put forward a proposal to the Government six years ago to form a holding company jointly with the Government, which would hold interests in the two said tunnels and the government-owned Cross-Harbour Tunnel, thereby facilitating the adoption of a unified mechanism for determining the tolls of the three tunnels. In this connection, will the Government inform this Council:

(a) of the details of the above proposal; and

(b) whether it has assessed the feasibility of this proposal; if it has and the assessment result is in the negative, of the reasons for that?

Reply:

Madam President,

A few years ago, we had some discussions with the franchisees of the Eastern Harbour Crossing and Western Harbour Crossing about the common ownership approach. However, there were major differences in some of the fundamental parameters and assumptions including these for valuation of the assets and future traffic projection, and it was difficult to reconcile the different objectives and interests of the parties concerned. Nonetheless, we maintain an open mind and will continue our dialogue with the tunnel operators on possible measures to achieve a more even distribution of traffic among the three tunnels.

Toll protesters plan legal bid
Michael Ng, Hong Kong Standard
April 30, 2005

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Protesters left their cars to block traffic at the Kowloon entrance to the Eastern Harbour Crossing and hung a banner on the footbridge saying `press your horn against toll increase'. The protesters were arrested. FELIX WONG

Pro-democracy activists are planning to seek a judicial review in a last-minute bid to stop this weekend's 67 percent increase in toll charges by the Eastern Harbour Crossing.

The move came after radical legislator Leung Kwok-hung and five other protesters Friday staged a protest which disrupted traffic at the entrance to the tunnel.

All five were later arrested by police and charged with misconduct. They were released on police bail of HK$2,000 each.

About 12.50pm Leung, also known as "Long Hair", Wong Tai Sin district councillor Andrew To, Eastern district councillor Tsang Kin-shing and two others drove four cars to the Kowloon entrance of the tunnel and then left them, blocking several lanes of traffic.

They also raised a banner which asked drivers to support their protest by sounding their horns.

The toll company was forced to close all toll counters and traffic was disrupted for about 30 minutes.

Police later arrived at the scene and removed Leung and the other protesters from the entrance before formally arresting them.

Starting Sunday, private cars using the tunnel will have to pay HK$25 for a single journey, a 67 percent increase on the current HK$15.

The New Hong Kong Tunnel Company, operator of the Eastern Harbour Crossing, Friday expressed regret at the protest and the traffic chaos it caused.

"We deplore the action of a few people which inconvenienced so many of our customers," the company said in a statement.

Deputy Secretary for the Environment, Transport and Works Annie Choi said her bureau respected the people's right to demonstrate but called on protesters not to over-react or inconvenience other road users.

Andrew To later told The Standard he and the other protesters were considering asking the High Court for an injunction against the toll rise while, at the same time, asking the government to lodge an appeal against the arbitrator's decision.

"We will consult our legal advisers to see whether there is a precedent to support our case,'' To said, adding that a writ could be ready as early as Tuesday.

Meanwhile, a spokesman for the Joint Committee of the China-Hong Kong Transport Trade, Chiang Chi-wai, said Friday the committee was expecting a major traffic jam at the Cross Harbour Tunnel on Tuesday.

"Even if we do not stage a protest, traffic at the Cross Harbour Tunnel will be crippled on Tuesday as 90 percent of all freight and goods vehicles will use the central tunnel to avoid paying the higher tolls,'' Chiang said.

Choi said it was difficult for the department to precisely estimate the level of traffic congestion on roads leading to the Cross Harbour Tunnel and the Western Harbour Crossing on that day, but she expected about 4,000 additional vehicles will use the Central crossing and a further 8,000 will use Western.

She said the Transport Department will activate its emergency coordination center from May 1, and will coordinate with the police force, and rail and bus companies to monitor the traffic flow.

Should a large number of passengers be stranded at major interchange locations, the three bus companies will deploy extra buses, Choi said.

"All cross-harbor commuters should be prepared to spend more time travelling and should use public transport, particularly rail, so as to avoid using road tunnels,'' Choi said.

"Drivers should also plan their driving routes in advance, and if possible, avoid using the Cross Harbor Tunnel during peak hours.''

Choi noted that these contingency measures will be sustained for a week and the department will review their measures after this period.

Drivers calculate the pros and cons of new charges
30 April 2005
South China Morning Post

Since qualifying for his driver's licence when he was 18, legislator Fred Li Wah-ming has always preferred getting behind the wheel to squeezing onto a train or bus.

The Tseung Kwan O resident has been a faithful customer of the Eastern Harbour Tunnel, using it every day to get to the Legislative Council in Central.

But things may change from tomorrow, when the toll for cars goes up to $25. Mr Li said he would continue to drive his Volvo through the eastern tunnel during rush hour to avoid traffic, but may take the Cross-Harbour Tunnel during late nights.

Going by the central route would save him only $5, but the lawmaker said he wanted to use it as a protest against what he says is an unjustified toll rise on the eastern route.

"Saving $5 is not much, but I think it is a matter of principle."

Mr Li got his driver's licence while studying in Toronto as a freshman in university.

"I like to drive because I can go wherever I want."

After becoming a legislator, Mr Li has used his car to get to work every day. It also comes in handy to get around his constituency in Kowloon East.

But now, if Mr Li has to cross the harbour more than twice on any given day, he opts for the train.

Mr Li's Democratic Party has proposed setting up a bridge and tunnel authority for the government to centrally own and manage all the roads and tunnels involved in cross-harbour traffic.

The party argues that this would allow the government to control the tolls at the three harbour tunnels and more evenly distribute traffic among them.

Maybe Hong Kong should consider building serveral frieght rail lines around truck dense areas.

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DEL

All's smooth at Cross Harbour Tunnel
Dennis Ng, Hong Kong Standard
May 4, 2005

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The feared traffic jams at the Cross-Harbour Tunnel following the 67 percent rise in Eastern Harbour Tunnel tolls failed to materialize Tuesday, but transport officials said the worst is yet to come.

Secretary for the Environment, Transport and Works Sarah Liao said traffic at the Cross Harbour Tunnel was smoother than expected.

However, she said the apparent lull was due to the fact that many factories in China were still closed for the May Day holidays and heavy lorries and container trucks would not be back on the roads until next week.

She also said it was obvious that many commuters took heed of warnings and used the underground railway to get to work.

"In general, the traffic was smooth on the first working day," Liao said. "However, the traffic flow is below normal because it is still a holiday on the mainland."

A total of 15,424 vehicles crossed the Eastern tunnel in the first 10 hours of Tuesday, about 21 percent or 4,100 vehicles down on a normal working day. During the same period, the number of vehicles using the Cross-Harbour Tunnel was up 4 percent while those using the Western Harbour Crossing rose 1 percent.

However, when compared with a normal working day, total vehicular traffic using all three tunnels was down 4 percent.

Deputy commissioner of transport Lau Ka-keung said the MTR, Citybus and New World First Bus had increased the frequency of their services during peak hours.

He said the MTR carried about 4,000 passengers more than usual during the morning rush hour.

Between the midnight and 3pm Tuesday, the MTR carried about 14,000 passengers more than on other week days.

Lau said the two bus companies had deployed more staff to the bus station at the Kowloon entrance to the Cross-Harbour Tunnel to help passengers switching from the East Rail to cross-harbour bus routes.

Liao said that if workers continue to take the railway rather than drive their cars, the fallout from the rise in the Eastern tunnel toll will not be too drastic.

However, the authorities need more time to identify travel patterns, she said.

Lok Ma Chau China-Hong Kong Freight Association chairman Stanley Chiang said about 20,000 lorries carry goods across the Hong Kong border on normal days.

But less than one-third were in use Tuesday as most mainland factories remained closed.

He said the smoother-than-expected traffic was also due to the fact that many car owners had decided to switch to the railway to avoid being struck in traffic jams.

However, there is now the danger that these drivers may return to their old habits since the feared traffic jams did not materialize, he said.

Legislator Lau Kong-wah said he wondered how long would people be prepared to wake up earlier to take public transport instead of driving their cars to work.

May 3, 2005
Government Press Release
Tunnel traffic falls 4%

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Close watch: Secretary for the Environment, Transport & Works Sarah Liao said traffic conditions were better than expected.

Traffic flow on both sides of the harbour remained normal on the first working day after the Eastern Harbour Crossing revised its toll, with 2,800-fewer vehicles using cross harbour tunnels, a fall of 4%.

Secretary for the Environment, Transport & Works Sarah Liao visited the Emergency Transport Co-ordination Centre today to monitor conditions which she said were better than expected.

Deputy Commissioner for Transport Lau Ka-keung said from midnight to 10am vehicles using the Cross-Harbour Tunnel rose 3% to 4% (about 1,200 vehicles) while the Western Harbour Crossing rose 1% (about 100 vehicles) and the eastern tunnel fell by 21% (about 4,100) compared to a normal working day.

However, Mr Lau said the busy period occurred 30 to 45 minutes earlier, at about 7.15am. On Hong Kong Island traffic on the Island Eastern Corridor ended at City Garden while the Aberdeen tunnel was closed intermittently. In Kowloon traffic at the toll plaza built up to the Polytechnic University. But he said the situation was normal, adding there was a vehicle breakdown inside the Aberdeen tunnel.

Mr Law said the number of goods vehicles was less than normal, perhaps due to less loading and unloading activities on the first working day after a long weekend.

More public transport

From 8am to 9am the MTR operated an additional train on its Tseung Kwan O, Kwun Tong and Hong Kong Island lines catering to an extra 4,000 passengers. And there were four additional cross-harbour buses to alleviate passenger traffic at Hung Hom.

Mr Law thanked the public for being co-operative in starting their journeys earlier and taking public transport, and the media for widely publicising traffic advice. But he warned traffic may become heavier in the next few days as commuter habits have not stabilised yet and goods vehicle numbers may rebound in the coming days.

He expects traffic on both sides of the harbour to get heavier from this afternoon, and he urged people, particularly students taking examinations, to plan their trips earlier and use public transport.

He said the department will remain vigilant and closely monitor the traffic situation.

Today's Cover - The Sun
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New toll 'will cost society $117m a year'
Elaine Wu
04 May 2005
South China Morning Post

Sunday's toll increases at the Eastern Harbour Tunnel will cost society about $117 million a year, according to an economics professor at the University of Science and Technology.

Francis Lui Ting-ming, director of the university's centre for economic development, said that while the tunnel owner would make more money from the new tolls, consumers and society as a whole would absorb the extra cost.

The professor estimated that New Hong Kong Tunnel Company would make an additional $120 million a year from the higher tolls, even if the number of vehicles taking the eastern route fell by 22 per cent.

But the 67 per cent toll increase would cost drivers an extra $237 million a year. Subtracting the tunnel's extra revenue from this amount gives a societal cost of $117 million a year, Professor Lui concluded.

"This amount does not include the time spent on waiting in traffic," he said. "Based on the traffic at the three tunnels [yesterday], the economic cost of time spent in traffic would not be great. But in the long run, when congestion returns, this would be significant."

Commuters left home earlier for work yesterday to avoid the morning peak hour on the first working day after the toll increases. Thousands of motorists also abandoned their cars to use the MTR, leaving traffic at the three tunnels smoother than expected.

The number of vehicles using the eastern tunnel fell by 22 per cent as of 4pm yesterday, while the Cross-Harbour Tunnel, the cheapest of the three, saw a modest increase of 1 per cent. The Western Harbour Tunnel had an increase of 5 per cent. There was a total decrease of 7,700 vehicles using the three tunnels.

But congestion would return in about two weeks, according to Tim Hau Doe-kwong, associate professor of economics at the University of Hong Kong. "There is a boycott effect because people are angry [about the toll increases], but I'm sure they will go back to their cars," he said.

"In two weeks you will see the bottom-line effect and the most extreme change. In four weeks, everything should be back to normal."

Professor Hau said that given the high cost of parking and fuel, the increase in the tunnel toll was only a fraction of a motorist's expenditure.

The focus should not be on the 67 per cent increase of $10 for private cars, he added, but the $5 difference between taking the Eastern Harbour Tunnel versus the Cross-Harbour Tunnel.

"The fact that motorists have already driven for a long time means that the automobile is a very, very attractive option," Professor Hau said.

Based on government estimates from a transport study, the average value of time in Hong Kong is $60 per hour, or $1 a minute. So, if a motorist had to spend five or more extra minutes taking the Cross-Harbour Tunnel, they would be better off using the Eastern Harbour Tunnel, Professor Hau said.

May 5, 2005
Government Press Release
Cross Harbour Tunnel traffic up 4%

From 6 to 9am on the third working day after the Eastern Harbour Crossing's toll hike, the number of vehicles using the Cross Harbour Tunnel was up 4%, with 600 more vehicles compared with a normal Thursday, the Transport Department says, adding traffic in general remains normal.

Vehicles using the Western Harbour Crossing also rose 4%, with 210 more vehicles, while the Eastern Harbour Crossing saw a 19% drop, with 2,100 less vehicles.

The department continued to monitor the traffic situation of the cross-harbour traffic and maintained close communications with the Police, franchised bus companies and the tunnel management companies.

On May 4, the number of vehicles using the Cross Harbour Tunnel fell 0.2%, with 300 fewer vehicles, while the Western Harbour Crossing traffic rose 6.7%, with 2,760 more vehicles.

The Eastern Harbour Crossing recorded a 22% drop, with 16,570 fewer vehicles. The total number of vehicles using the three cross-harbour tunnels fell 5.8%, with 14,000 fewer vehicles, compared with a normal Wednesday.

The department appealed to the public to:
*plan their trips early, allow more time for travel and choose the most suitable route;
*pay attention to the weather and check traffic conditions by listening to radio/TV broadcasts or by visiting the Transport Department website before starting their journey;
*allow more time to travel to examination centres when attending public examinations;
*make full use of public transport, in particular the MTR and KCR;
*avoid using the Cross Harbour Tunnel during peak hours and use alternate routes when serious congestion occurs;
*be patient and comply with directions given by frontline Police officers.

Members of the public may call 1823 for enquiries.

LCQ4 : Government continue to monitor cross harbour traffic flow
Wednesday, May 11, 2005

Following is a question by the Hon Fred Li and a reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, in the Legislative Council meeting today (May 11) :

Question:

Today is the 11th day since the hefty toll increase of the Eastern Harbour Crossing (EHC) came into effect on the first of May. Regarding the vehicular volume of the three cross-harbour road tunnels, will the Government inform this Council:

(a) how the respective vehicular volumes of the three cross-harbour road tunnels since May 1 compare to those before the toll increase, and whether there is any discrepancy between the actual figures and those predicted by the Administration; if so, of the extent of discrepancy;

(b) of the effectiveness of the short-term measures implemented by the Administration to relieve the traffic congestion at the Cross-Harbour Tunnel; and

(c) of the progress of the Government's negotiation with the commercial group holding a portion of the interests in the EHC and the Western Harbour Crossing on the ways to address the problem of uneven distribution of traffic among the three tunnels?

Reply :

Madam President,

The average daily vehicular volume of Eastern Harbour Crossing (EHC) between May 1 when the toll increase came into effect and this Monday is 53,000 vehicles/day, which is 26 percent less than the daily average of 72,100 vehicles/day in the month before the toll increase. The average daily vehicular volume of Cross-Harbour Tunnel (CHT) is 121,000 vehicles/day, which is 2.2 percent less than the daily average of 123,700 vehicles/day in the month before the increase. The average daily vehicular volume of Western Harbour Crossing (WHC) is 39,000 vehicles/day, which represents a decrease of about 1 percent when compared with the daily average of 39,300 vehicles/day in the month before the increase.

The average daily vehicular volume flow at CHT, WHC and EHC in 2004 were 121,700 vehicles/day, 39,200 vehicles/day and 73,500 vehicles/day respectively. We estimate that the toll increase at EHC would reduce the vehicular volume of EHC by 17 percent (12,500 vehicles/day), increase the throughput at WHC by 21 percent (8,400 vehicles/day) and that at CHT by three percent (3,800 vehicles/day). Our estimate is mainly based on the following :

(a) When EHC last raised its tolls in 1998, its daily vehicular volume decreased by 15,000 vehicles/day.

(b) The throughput at CHT has reached its practical maximum, and there is little scope for CHT to take up more traffic especially during the peak hours. The increase of 3,800 vehicles/day would mean longer vehicle queues, an extension of the peak period and increase in vehicular volume at the off peak period.

(c) Some motorists from EHC (e.g. those to/from the New Territories) might be diverted to WHC instead of CHT due to the longer journey time at CHT. Separately, traffic diverted from EHC to CHT might also displace those motorists originally using CHT, and some of them might be diverted to WHC. When EHC last raised its tolls in 1998, over 70 percent of the traffic diverted from EHC went to WHC. This is the basis of our current estimate.

(d) EHC's toll increase might suppress overall cross harbour traffic because some motorists might change to public transport or cancel the vehicular trips.

It should be noted that since human behaviour cannot be predicted in very accurate terms, this estimate is no more than a rough projection in broad terms of the likely reaction to the toll increase. Besides, since the new tolls have just come into effect, some of the factors which might affect the vehicular flow in real terms are not yet fully reflected. Driving behaviour of the motorists would also take more time to adjust. We therefore cannot make any meaningful comparison between the above projection and the actual figures gathered in just a few days after the toll increase.

In order to cope with the increased congestion that might occur after the toll increase at EHC, we have formulated a series of contingency and publicity measures which mainly include the following :

(a) Transport Department (TD) has activated the Emergency Transport Coordination Centre in the first few days after the EHC toll increase to closely monitor traffic via closed circuit television and where necessary adjust signal phasings to ease traffic queues on the key approach roads to CHT. The Centre has also liaised closely with Police, bus operators and tunnel operators to handle traffic disruptions on roads and adjust traffic plans as necessary.

(b) All non-emergency road works on the key approach roads to CHT and WHC are suspended to minimize disturbance to traffic flow.

(c) Tunnel operators have been alerted to prepare for likely increase in traffic through their tunnels and to remove any obstructions in the tunnel area quickly.

(d) Franchised bus operators have been advised to closely monitor passenger demand for cross harbour bus services, especially at the cross harbour tunnel portal bus stop, and to provide additional buses if necessary.

(e) Mass Transit Railway Corporation Limited and Kowloon-Canton Railway Corporation have been requested to provide additional services if such need arises.

(f) Police has deployed more officers to key junctions and roads (especially approach roads to the tunnels) on Hong Kong Island and Kowloon, to direct traffic and handle any incidents that may occur.

(g) TD has closely monitored the traffic situation and update the media on the latest traffic information.

Over the past few days, we have the following major observations which show that such measures have been effective :

(a) Motorists using CHT have generally started their trip earlier. During peak hours, traffic at CHT has been smooth. This is attributable to the cooperation and patience of citizens and has also proved to a certain extent the usefulness of our coordination and publicity measures.

(b) The average number of passengers using the Mass Transit Railway (MTR) increased by about 50,000 per day. On average, about 600 more passengers interchanged at the Kowloon-Canton Railway East Tsim Sha Tsui Station for MTR for cross-harbour trips.

(c) Franchised bus operators have deployed two extra buses for cross-harbour trips each day on average to handle additional demand.

(d) We notice that many passengers checked traffic conditions and planned their routing before starting their journeys. TD's hotline received an average of 120 enquires per day, and the hit rate at its website was 6,000 times per day.

We will continue to monitor the traffic situation and take the necessary corresponding actions.

To address the uneven distribution of traffic among the three road harbour crossings, we have commenced preliminary discussions with the major shareholders of EHC and WHC, and will continue to actively discuss and carry out studies. We will keep an open mind and uphold the key principles of safeguarding public interests and ensuring fairness to taxpayers when discussing with the franchisees.

東隧獅子開大口申加價40%
2010年09月18日(六)
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本港三條隧道流量不均，港府準備以「紅加東減」的收費方案調節，惟方案尚未公布，每年盈利數億元的東區海底隧道昨已出招，申請明年起瘋狂加價四成。東隧此舉勢迫使港府搶先調高紅磡海底隧道的收費，私家車每次收費最少加價五元，將多收的車費資助東隧減價，望提高東隧車流減低紅隧壓力，同時亦免東隧再利用「賺唔夠」去申請大幅加價。有學者認為，港府有必要盡快推行「紅加東減」方案，以解燃眉之急。

港府原計劃本月內公布三隧分流的顧問研究報告，並正積極考慮把紅隧私家車收費由二十元加至二十五元，然後利用多收的款項，資助東隧將收費由二十五元減至二十元，吸引駕駛者改行東隧。

私家車35元小巴54元

可是東隧卻搶先以盈利未達合理回報率百分之十五為由申請加價，平均加幅達四成，私家車由二十五元加至三十五元，小巴亦由三十八元加至五十四元。

營運東隧的新香港隧道有限公司總經理葉小慧表示，由於專營權將於二○一六年屆滿，董事局認為有必要透過申請加價，為股東帶來合理的回報，而今次加價後，回報率仍未達百分之十五。

紅隧隨時被迫加價70%

如果東隧申請的加幅獲批，兩隧的私家車收費差距將高達十五元，屆時要實行「紅加東減」方案，紅隧的加幅便要加七成以上，公眾勢難接受。因此，港府將被迫出手，搶先批出東隧加費前調高紅隧收費，再促使東隧減價。

專門研究交通問題的理大土木及結構工程學系副教授熊永達指出，港府有必要詳細審視東隧的財政狀況，以確定其「賺唔夠」的理據是否充足，因今次申請加幅極高，普羅市民難以接受。他亦認為，港府應該在批准東隧加價前，先落實「紅加東減」方案，改善東隧的財政狀況以封其加價的藉口。

過海小巴表明跟隨加價

面對各條隧道隨時加價，公共交通工具勢將成本轉嫁乘客。的士小巴權益關注大聯盟主席黎銘洪表示，若東隧加價四成，其中一條經東隧來往觀塘至柴灣的紅色小巴線，每程將要加價一元。運輸署則指，今年共有三十四條專線小巴路線獲批准加價二至六毫，現正處理八十八條小巴線的加價申請。

運輸及房屋局發言人表示，已經接獲東隧申請加價，將按《東隧條例》處理有關申請。該局將會諮詢交通諮詢委員會及立法會的意見，並交由行政長官會同行政會議審核。東隧以往曾經兩次申請加價被拒，最終提出仲裁，結果港府全部敗訴，○五年東隧的加幅便接近七成。

2010-09-26
Pan urges government action over tunnels
HKT 08:32

The government has been urged to buy back both the Eastern and Western harbour tunnels to deal with rising tolls. Unionist lawmaker Dr Pan Pey-chyou made the call on RTHK's Letter to Hong Kong after the operator of the Eastern Tunnel applied for an average forty per cent toll rise next year. Dr Pan said the most sensible way to boost tunnel usage is to reduce charges. He said another solution - which the government may be less inclined to adopt - is to subsidise the eastern and western tunnels while securing an agreement from the operators of both tunnels to lower their tolls. He added that allowing the operators to increase tolls instead would not only discourage drivers from using them but worsen traffic on all of Hong Kong Island. Dr Pan said the Eastern and Western Harbour Tunnels are living proof that the build-operate-transfer (or BOT) model, as often adopted to finance major infra-structure projects, can go seriously wrong. He claimed operators, driven by a motive to maximize profit while they still own their franchise, may choose tactics which work against the interest of the community at large. An arrangement that can be especially tricky when privately owned and publicly owned facilities operate in parallel.

It looks like some cross subsidy scheme will be adopted to increase the vehicles crossing the harbour. As most cities try to manage congestion HK tries to increase it.

It looks like some cross subsidy scheme will be adopted to increase the vehicles crossing the harbour. As most cities try to manage congestion HK tries to increase it.

How?

林本利﹕東隧加價 為要多賺0.2％？

【明報專訊】正當政府快要公布3條過海隧道的車輛分流研究報告，東隧突然申請大幅加價四成，私家車收費由每程25元增加至35元，收費與紅隧（20元）進一步拉遠。

東隧申請加價，是根據2005年1月的獨立仲裁結果。當時仲裁人引用1997年的仲裁結果，裁定東隧在30年專營權內，每年可以繼續賺取15％至17％的「合理但非過多」的股本內部回報率。仲裁人除了支持東隧2005年加價外，還容許東隧可以在5年內再加價一次，以期達到賺取最少15％的股本內部回報率。

仲裁人在釐定東隧的合理回報時，不是像兩電一般以資產淨值為計算基礎，而是以股本作為計算基礎。東隧的總投資額約為22億元，當中7.5億來自股東，其餘是來自銀行貸款。這7.5億元的股本，便是用作計算股本內部回報率的基礎。

至於東隧的回報，亦非像兩電以公司利潤為準則，而是以淨現金流作為計算。淨現金流是每年的總收入（主要是隧道費），減去每年的現金支出，包括資本開支、經營開支（主要是員工薪酬，不包括折舊）、利息、利得稅、償還借貸等。

東隧在1986年獲政府批出專營權後，頭幾年股東總共投資7.5億元，淨現金流是負數。到1989年東隧通車後，公司開始賺取收入。扣除各項現金支出後，淨現金流變為「正數」。在計算淨現金流時，東隧是以派息作為準則。換言之，即使公司錄得正現金流，手上現金充裕，倘若不派息，股東仍未算收到淨現金流。

自從東隧在1994年開始派息後，到2009年為止，股東總共收取了46.6億元股息。今年東隧流量較去年增長近5%，平均每日接近66,000架次車輛使用，估計可以為公司帶來5億多元的淨現金流。倘若公司將這額外賺取的現金全數派息，到今年年底股息總數已經達到52億元，是7.5億元股本的7倍，每年股本內部回報率約13.3%。

東隧想先發制人增談判籌碼

筆者推算過，即使專營權屆滿（2016年8月6日）前不加價，東隧未來5年多，只要每年流量增長2%，額外可以多派30多億元股息（包括手上1.5億元現金）。整個30年專營權期間東隧一共獲得約86億元股息，是股本的11倍，每年股本內部回報率達到14.4%，已經是一項回報十分理想的投資。東隧的大股東中信泰富，從1988年6月至今，公司的股票總投資回報（包括股價上升和股息），每年亦不過12.8%，東隧的回報已足夠向股東交代。

倘若東隧加價四成，令汽車流量首年下跌一成，之後每年回升2%，公司未來5年多的淨現金流可以增加至約40億元，較不加價多6億多元。由於專營權只餘下不足6年，故此即使大幅加價四成，令紅隧擠塞情加劇，東隧每年股本內部回報率亦不過增加0.2%，達到14.6%。

很明顯東隧大幅加價，並非單單為股東爭取多賺0.2%的回報。東隧想先發制人，增加日後與政府洽談3條過海隧道車輛分流問題的談判籌碼；並且期望政府不要單單處理東隧和紅隧的車輛分流問題，亦要想辦法打救西隧，增加西隧的流量和收入。政府即使有意回購東隧，亦可能被迫要一併回購西隧。然而，由於西隧至今的淨現金流總額（股息減股本）還是負數，公司若要追回之前的損失，達到每年賺取15%的回報，回購價（連同償還銀行貸款）超過200億元。

東隧和西隧的大股東同屬中信泰富。公司在2008年10月公布因炒賣澳元衍生工具而虧損150億元，令股價一度暴跌超過一半，之後執法機構介入調查。現在中信泰富為了東隧每年多賺一兩億元而申請大幅加價，惹來公眾憤怒，嚴重損害公司形象，恐怕只會得不償失。

Tunnel firm pushes for hikes after Exco swipe
22 June 2011
The Standard

The Eastern Harbour Tunnel operator will seek arbitration after the Executive Council rejected its attempt to raise tolls.

The rejection comes amid public outcry over the application by New Hong Kong Tunnel Co last September to raise tolls between 38.5 percent and 42.1 percent for different types of vehicles.

The company said it is disappointed at the Exco decision, insisting the hikes are required for the firm to have a ``reasonable but not excessive'' return over its 30-year franchise until 2016.

According to the Eastern Harbour Crossing Ordinance, either the government or the tunnel company may seek arbitration if they disagree on tolls.

The arbitrators will judge whether, with the toll adjustments, the business is ``reasonably but not excessively remunerative'' to the tunnel company.

A Transport and Housing Bureau spokesman said the government noted the ``strong financial position'' of the tunnel operator and its high level of internal rate of return so it considers the application unjustified.

Authorities are also ``very concerned about public affordability and acceptability'' of the increases.

New Tunnel sought arbitration when its first toll rise was rejected in October 1995.

The arbitrator in April 1997 ruled that reasonable but not excessive remuneration to the company fell within a range of 15 percent to 17 percent internal rate of return.

Even after the current proposed hike, the rate of return likely to be achieved over the life of its franchise will be 14.51 percent, which still falls short of 15 percent, New Tunnel said.

It last sought arbitration in August 2003, a month after the government rejected its 2002 application for an increase.

The arbitrators ruled in favor of the company in 2005.

Transport analyst Hung Wing-tat said the firm will resort to arbitration, but its attempt may not necessarily succeed. ``The rate of 15 percent to 17 percent was considered reasonable in view of the economic environment in 1997, but arbitrators may not take the same view now.''

However Legislative Council transport panel chairman Andrew Cheng Kar-foo fears arbitrators will reverse the Exco decision.

Cheng said there were similar circumstances in the past, both relating to inflation and the business situation of the tunnel operator.

``Then the company twice succeeded at arbitration,'' he said.

Cheng called on the government to buy back the privately owned Eastern and Western tunnels.

Given the huge queues on the Eastern Expressway at peak times surely the Government would welcome a raise at peak only periods.

The whole tunnel ownership scheme needs to be revamped so fare rises and drops can both take place at ease. That's the only way to even out the traffic flows.

The whole tunnel ownership scheme needs to be revamped so fare rises and drops can both take place at ease. That's the only way to even out the traffic flows.

Are you suggesting the CHT is re-franchised so the currently subsidised extremely low fares can be raised?

Are you suggesting the CHT is re-franchised so the currently subsidised extremely low fares can be raised?

The 2 private tunnel operators need to go. CHT need to raise its fares while the others need to lower theirs.

No matter who owns the CHT IF it raised it fares the others would have to lower theirs now under the current scheme of control.

東隧求仲裁向政府宣戰
2011年08月10日(三)
太陽報

【本報訊】東區海底隧道申請大幅加價四成被拒，已正式入稟仲裁。港府過去兩次與東隧仲裁均告失敗，隧道公司事後大幅加價，若今次政府再輸，東隧私家車收費每程可能加價十元或以上。立法會議員期望政府盡一切努力，阻止東隧加價。

經營東隧的新香港隧道公司去年申請加價四成，私家車及的士收費由二十五元加至三十五元，小巴及輕型貨車由三十八元加至五十三元。東隧的加價理據是九七年首次加價仲裁中，仲裁人已裁定隧道公司的合理但非過多報酬應為內部回報率百分之十五至十七。如果成功加價四成，整個專營期所得的內部回報率只有百分之十四左右，未達九七年裁定的合理回報率下限。根據該公司預測，如果落實加價，隧道費每年可增加一億六千四百萬元，總額由七億三千六百萬元增至九億元，增幅達兩成二。

不過，政府認為東隧通車後三年即九二年，已開始轉虧為盈，去年底累積盈利已超過五十一億元，回報是私營行車隧道中最高，加上隧道行車量並無過度擠塞，毋須透過加價調節車流量，故認為東隧無足夠理據加價。