LegCo Panel on Transport on 23 April 1999
Report on the Initial Operations of the New Licensed Ferry Services


This paper reports on the initial operations of the new licensed ferry services for the outlying islands, new town and inner harbour, and the action taken by the Administration and the ferry operators.


2.The ferry service market has gone through and will continue to undergo major changes due to competition from land transport and changes in travelling pattern. A franchise system no longer works as the growing number of loss-making routes could not make a network of services viable. Instead, a licensed arrangement with services divided into several small packages enables both the operators and the Administration the flexibility to respond quickly to such changes. As a result, the Hongkong and Yaumati Ferry Company (HYF)'s and Star Ferry's Hung Hom to Edinburgh Place services were grouped into different packages and put out to public tender as licensed services in order to trawl the market for the best available operators to run these services after their franchises expired on 31 March 1999. The LegCo Panel on Transport was briefed on the decision of tendering out the above franchised services in September 1998.

Consultation on Tender Requirements

3.In drawing up the tender conditions, the Administration took into account, inter alia, the patronage (particularly peak hours patronage), the service level and vessel requirements of each package. For the outlying island routes, which were essential services, the Administration was mindful that these services had to be maintained and the travelling demand of the Islands residents had to be met. In this regard, the Administration consulted members of the Provisional Islands District Board and other local organisations on the service requirements before finalising the tender conditions. Through consultation with these parties, the feedback was that Islands residents requested more fast ferry trips; reducing the difference between weekday and holiday fares; and minimising conflicts between passengers and freight. These requests were suitably reflected in the tender conditions.

4. Taking into account the feedback received through different channels, tender conditions were designed to meet the following objectives -

  1. maintain uninterrupted services to the outlying islands;

  2. ensure that there should be adequate carrying capacity to meet the passengers' demand, in particular during the morning peak hours;

  3. improve the standard of ferry services by ensuring a minimum level of fast ferry trips; and

  4. the fares for the ordinary ferry and fast ferry should be affordable by the Islands residents.
5.However, it would not be appropriate for the Administration to specify the exact service timetables because the potential bidders needed the flexibility to plan their business operation according to available resources and their own assessment of the market demand. It would also be unfair for the Administration to stipulate in detail the specific types of vessels to be deployed, e.g. triple deck vessel, as this would favour the few operators which had the capability of deploying the specific types of vessels.

Tender Results

6.Through the competitive tender exercise, the Administration has successfully introduced new operators in the ferry service market. For the outlying island services, there are now two operators providing services. A comparison of the new services with the old services for the outlying islands is at Annex A.

7.Following the grant of licences by the Commissioner for Transport, the two successful operators and the Administration presented the details of their services, including their proposed timetables, to the Provisional Islands District Board for consultation. It was recognised at that time that no one set of timetables could meet the demand of every passenger. The Administration and the operators thus agreed to further review the timetables as and when necessary after 1 April 1999.

Overnight Transition on 31 March

8. The overnight transition of piers and the operation of the first trips to outlying islands was very smooth. The first trips from Central to the outlying islands operated by the Hong Kong and Kowloon Ferry Limited (HKK) and HYF departed as scheduled after midnight on 1 April 1999. HKK who was required to install its electronic ticketing system overnight at the Yung Shue Wan Pier successfully completed the installation for operation on the morning of 1 April 1999.

Initial Operations during 1 - 6 April

9.On 1 April which was a normal working day, the operations of most of the new licensed services experienced no problem. Unfortunately, HYF's automatic ticketing system broke down during the morning peak hour of 1 April and the company had to revert to the manual ticketing system. This caused longer queuing time for the Cheung Chau, Mui Wo and Peng Chau services. Moreover, for the Peng Chau service, although the two fast ferry services at 8.00 am and 8.30 am together had more than enough capacity to carry the Peng Chau commuters, the fact that the majority of them chose to take the 8.30 am service created a capacity problem on that sailing. Passengers in Peng Chau were also dissatisfied that there was no ordinary ferry service between 8.00 am to 9.00 am and that they needed to take the more expensive fast ferries.

10. The breakdown of the automatic ticketing system also led to problems in controlling passengers boarding the vessels. On one occasion (the 8.30 am fast ferry sailing from Peng Chau to Central), the number of passengers on board the vessel exceeded the carrying capacity by about 30. Passengers were requested to board a supplementary sailing, and the departure of the 8.30 am sailing was subsequently delayed by some 20 minutes.

11.In anticipation of occasional mismatches between the travelling pattern and timetable during the initial operations, the Transport Department, as part of the gearing-up arrangements, had arranged with HYF and HKK to provide standby vessels. In this regard, a total of 9 additional trips were operated on 1 April for Cheung Chau, Mui Wo, Peng Chau and Lamma Island.

12. During the Easter holidays, 2 - 6 April, the operations of the outlying island ferry services were in general very smooth. The operation of the automatic ticketing machines was restored by HYF on 2 April, but there was a short period of breakdown of the system in the morning. Although some passengers still needed to queue outside the Central Piers during that period, the system was quickly restored and the queues cleared.

13. There were adequate vessel capacities to handle passengers' demand. More than 361,000 passengers took the ferries to and from the outlying islands in the holiday period. HYF, HKK and Shun Tak (the operator of the excursion service Tai O - Sha Lo Wan - Tuen Mun - Central) deployed spare vessels to provide additional trips to meet the holiday demand. They altogether operated 1,526 trips, 226 more than the scheduled trips.

14. For the Tai O service, the scheduled trips could not cope with the upsurge in demand from holiday makers on 4 and 5 April 1999. Hundreds of passengers queued outside the Tai O Pier and police were called in to maintain order. Shun Tak operated 4 and 11 additional trips on 4 and 5 April respectively. In fact, the demand for ferry services on 5 April was exceptionally high, e.g. there were about 3,100 holiday makers using the Tai O ferry service, about twice the average for last April. Shun Tak needed to re-deploy its vessels for the Central - Tuen Mun service to meet the demand. The New Lantau Bus Company had also strengthened their bus services from Tai O to Tung Chung and Mui Wo. With these arrangements, the queues were cleared by 7.00 pm.

15.For the other new licensed services, the operations were in general very smooth, and they did not experience any major problem. There have been a few relatively minor complaints and these are being addressed in the context of the daily monitoring of ferry services.


16. From the feedback received on 1 April and during the holiday period, the Administration noted that some of the trips for the outlying island services at specific times did not meet the need of some passengers. In the light of the comments received, the Administration reviewed the situation with HYF and the following immediate measures were implemented -

  1. conduct regular testing of the automatic ticketing system to ensure that it works properly, and to streamline and improve the efficiency of the manual ticketing system in the event of sudden breakdown of the automatic ticketing system;

  2. deploy a 400-seat double decker to operate an additional ordinary ferry trip to serve Peng Chau to replace a fast ferry sailing during the morning peak hour from 7 April. The vessel was replaced by a 600-seat vessel from 16 April to improve the quality of service;

  3. cancel the deluxe class on Mui Wo, Peng Chau and Inter-Islands services to provide more ordinary class seats for passengers;

  4. operate additional trips at specific times during the peak hours to supplement the scheduled trips for Cheung Chau and Mui Wo; and

  5. continue to make available standby vessels.
17. In addition, beginning 12 April, special arrangements have been made on a trial basis for the students taking certain specified sailings of the Mui Wo service in the morning to enable them to pay a concessionary fare for the fast ferry service.


18. Despite the teething problems experienced, mainly on 1 April, the Administration is in general satisfied that, subject to some fine tuning, the initial operations of the new licensed services have provided sufficient capacity to meet travelling demand. A comparison of the carrying capacity provided and the actual patronage on a normal school day is at Annex B.

19. However, the Administration is very concerned that there have been complaints throughout the initial operations from some of the Islands residents, notably Peng Chau residents, about the fares, the service timetables, and the capacity and quality of vessels. The Administration has immediately reviewed the initial operations with HYF and the Provisional Islands District Board to see whether further adjustments to the timetables are required to ensure that the new service timetables and the capacity of the vessels could meet the travelling pattern. Having carefully examined the complaints received, the Administration identified a number of areas where improvements could be made.


20.The fares of the licensed services have been determined by the market forces through the competitive tender. While the new fares of ordinary ferries are comparable to the old fares ($10 vis-a-vis $9.2-9.7), the new fares of fast ferries have been significantly reduced (from $24 to $15 for the Lamma services and $20 for the other services). Also, the holiday fares have been reduced from 1.8 times to 1.5 times the weekday fares, and holiday fares are no longer charged on Saturday afternoons.

21. Nevertheless, the Administration has asked HYF to consider -

  1. reinstating the weekend/holiday fare concessions for the Islands residents so that they could continue to use weekday fares for travelling to and from Central throughout the holiday period; and

  2. continuing to provide concessionary fares for students taking the 6.20 am fast ferry from Mui Wo.
Timetable and Capacity

22. Apart from the additional ordinary ferry trip for Peng Chau which has already been implemented since 7 April, HYF has proposed additional ordinary ferry trips in the morning and evening peak for the Mui Wo service so that passengers could have more choices between fast and ordinary ferries. With these changes, there would be at least one ordinary ferry sailing per hour during the peak for outlying island services, providing ample carrying capacity to meet the travelling demand during that period.

Vessel Quality

23. The Mui Wo and Peng Chau ordinary ferry services are now operated wholly by double-deckers, instead of by a mixed fleet of triple-deckers and double-deckers as was the case before 1 April 1999. Although the double-deckers are in fact faster, meet all safety requirements and have been used for years on the outlying island services, some residents have recently expressed concerns about their safety and comfort, including bumpiness, noise level, ventilation and seating arrangements. Strong preference have been expressed for triple-deckers because of their stability, larger spare capacity and better seating arrangements, especially on the top deck for various activities such as breakfast and homework.

24. However, based on the actual passenger figures (Annex B), the carrying capacity of double-decker (ranging from 565 - 674) already far exceeds the demand per trip for most of the day on the Mui Wo and Peng Chau services. The use of a triple-decker (with carrying capacity of around 1,500), which is some 30% more expensive to operate than a double-decker, would be an uneconomic deployment of resources and would have implications on fares.

25. Apart from the double-deckers, complaints have also been received about the bumpiness on the 200-seat fast catamarans used by HYF and HKK. Again these vessels have been in use before on the Yung Shue Wan, Cheung Chau and the new town services. Nevertheless, Marine Department and Transport Department are carrying out inspections and surveys on vessels and at ferry piers to get an overview of the service quality and to identify ways to improve the quality of ferry services.


26. The Administration has been monitoring the transition and the initial operations of the new licensed ferry services closely. Though the operation on 1 April and during the Easter holidays has attracted a lot of public attention and discussion, the Administration, having identified the problems and implemented a number of improvement measures, finds that the current capacity generally matches passenger demand.

27. The Transport Department will continue to work with the relevant District Boards and ferry operators to examine the need for any further service adjustments.

Transport Bureau
19 April 1999