Under its operating agreement with the government, the MTR Corporation is entitled an annual fare review using figures published by the Census and Statistics Department.
Based on the department’s latest figures on Friday, transportation sector wages rose 3.1 percent year on year, while inflation stood at 1.4 percent.
The mean value of 2.25 percent is then curtailed by a “productivity factor” linked to the MTRC’s profit from property development. The more it earns in a particular year, the higher the productivity factor.
This year it amounted to a deduction of 0.8 percent, bringing the increase down to 1.45 percent, below the threshold of 1.5 percent required to trigger an actual adjustment.
Even if it exceeds the threshold, there is still another “affordability cap” where the actual fare adjustment cannot be higher than the change in median monthly household income, which recorded a slight drop last year.
As a result of these constraints, fares will be frozen for the first time since 2022/23.
The intended 1.45 percent increase, together with another 1.91 percent rise supposedly brought forward from last year, will both be rolled over to 2026/27.