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A different route


Hong Kong needs to clean up its buses and goods vehicles. Our roadside pollution is extremely bad and these fleets are a large part of the problem. There is no disagreement about this; the debate is over how to do it. The environment minister has suggested the government might pay for new buses to expedite the renewal of the fleet. Some political parties are open to the idea while others are uncomfortable with the government taking a more active role.

Hong Kong’s bus companies are allowed to operate services based on franchises. The operators’ primary interest is to have the best return on their investments. Thus, they want to run their buses as long as possible to squeeze the highest use from a capital asset.

The problem for the community is that technology improves all the time and an old bus fleet, even if well maintained, is much more polluting. If the franchise doesn’t give incentives or penalties based on the bus fleet’s level of emissions, it makes sense to keep running buses as long as possible.

The facts are plain to see. Hong Kong has five commercial bus operators running a fleet of about 6,000 buses. Three-quarters of them still have Euro II or older engines. The latest diesel-engine standard is Euro V. While the franchises require the purchase of the latest technology when new buses are acquired, old clunkers can still have a considerable lifespan.

Every few years sees technological improvements in fuels and engine design. For example, Euro VI buses [Roman numeral designations are for diesel engines] are expected by 2014, or diesel-powered technology could be swapped for natural gas. Hybrid, hydrogen or electric-powered trolley buses are also available.

The challenge for governments, including ours, is how to adopt new technologies. Some city authorities run their own buses, while others, including Hong Kong, allow commercial operators to provide services, usually in the form of franchises. If Hong Kong wants a much cleaner bus fleet because we want better public health, the franchises are going to have to be reframed. Indeed, government policy and all relevant legislation will also need to be revised.

Money is one issue. New buses or technology requires an upfront payment that may cut into short-term profits. Bus operators who are used to enjoying a certain level of return may be reluctant to see their profit margins reduced. If they have to invest in new assets or pay higher operating costs, they will want to pass that on to passengers. But the government will also fear a public backlash over higher fares. That is presumably why officials have floated the idea of the government paying to replace buses to expedite fleet renewal. The logic is that, if the operators’ investment costs in new buses are reduced, then fares do not need to rise, or not by much. In return, the community gains by having cleaner air and better health sooner.

It should be possible to estimate what the new fares may be against improved public health benefits once we know the level of subsidy and timeframe, although officials have not presented these figures yet.

The government has probably already begun to explore possibilities with the operators. It is much easier dealing with five bus companies than the thousands of goods vehicle owners.

The government’s target to deal with buses is a short-term measure but a necessary one. It is also not too early to consider how to reframe franchises.

Bus operators make good money in Hong Kong. They know they run a public service under franchise and public policy must keep up with the times.

Indeed, smart politicians should remind them of this and not focus on how much more the public has to pay. There should be no issue with reframing franchises to reflect new policy goals to improve air quality so that it no longer poses a public health threat, and buses must play their part. The public must press hard for this.

Christine Loh Kung-wai is chairperson of the Clean Air Network and CEO of the non-profit think tank Civic Exchange.

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