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KMB seeks govt aid for bus operators 19-07-2011
Maggie Ho reports
Kowloon Motor Bus says the government should set up a special fund to buffer the impact of rising global fuel prices and inflation on bus fares. This came as the firm issued a profit warning - and said that 60 percent of its routes are loss-making.
The company said that it may record a loss for the first half of the year. It blamed the fuel price surge, and opposition to its plans to cut under-used routes.
KMB's managing director, Edmond Ho, said the creation of a fund should not be seen as a subsidy for the publicly listed company.
Since fuel prices are an even bigger part of the cost of running ferries, if KMB gets this there is hope for a similar fund for ferries.
Though there is less pressure on the ferry companies, as, unlike the buses, there is no alternative, they can just say "cost of fuel has gone up X%, fares must go up X%, with no reduction in the number of trips, so effectively they are on a cost-plus contract. So they'd have to be pushed to go for this.
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