Provisional Legislative Council Panel on Transport
New Lantao Bus Company (1973) Limited
Application for Fare Increase


New Lantao Bus Company (1973) Limited (NLB) has applied for a weighted average fare increase of 9.0% to take effect on 1 April 1998. NLB last increased its fares on 1 February 1996 by a weighted average of 10.4%.

NLB's Franchised Bus Services

2. At present, NLB operates 13 franchised bus routes with a fleet of 77 buses. It employs about 145 staff. There is heavy recreational demand on Sundays and public holidays. In 1997, it carried 12,400 passengers on a weekday, and 23,500 passengers on Sundays and public holidays.

NLB's Performance

3. In the past two years, NLB has been able to maintain a proper and efficient service, in terms of bus availability, utilization and maintenance. There have been extremely few lost trips.

4. In 1997, NLB's Passenger Liaison Group met six times. The Company also attended the Traffic and Transport Committee meetings of the Provisional District Boards and user group meetings on request.

5. The Company operates a 24-hour hotline for answering enquiries. It has installed information panels at major en-route bus stops for displaying route numbers, operating hours and fares. The Company has set up a customer service counter in Mui Wo to provide route information to passengers. Route maps/leaflets are also available for collection.

6. In its Route Development Programme for the period 1998/99 to 2002/03, NLB plans to introduce five new routes and implement 17 items of service improvements to meet anticipated growth in demand. It proposes to purchase 28 buses in the next five years.

Application for a Fare Increase

7. If fares remain unchanged, NLB is expected to make a loss in 1998/99. In order to maintain a viable service and to continue with its service improvements, the Company has applied for a fare increase to take effect on 1 April 1998.

Assessment of the Fare Increase Application

8. Public transport fares need to be pitched at a level affordable to the public. At the same time, operators should be able to recover their operating costs and obtain a reasonable return on their investment.

9. In considering this application, the Administration will take into account the following factors -

  1. changes in operating costs and revenue since the last fare increase;

  2. the quality and quantity of services provided having regard to passenger demand and feedback;

  3. cost economy measures;

  4. future development plans and service improvement programmes;

  5. forecast of future costs, revenue and return;

  6. public affordability and acceptability, including the impact on inflation and livelihood; and

  7. the need to provide the Company with a reasonable rate of return from its bus operations.

10. The Administration is examining NLB's application.

Transport Bureau
February 1998