[sustran] Fuel-switch grants for minibuses unveiled

[Jain Alok]

>From South China Morning Post, Hong Kong
Fuel-switch grants for minibuses unveiled 

At least $184 million is to be spent by the Government to subsidise the
conversion of diesel minibuses to liquified petroleum gas or electricity by
the end of 2004, it was announced yesterday. 
The subsidy package, part of a major initiative to improve air quality, was
unveiled after the South China Morning Post revealed the plan yesterday. 
The package is on offer to owners of 4,350 public minibuses and 2,000
private minibuses in a voluntary conversion scheme. 
The Government will offer a one-off cash grant of $60,000 to each public
minibus operator switching to LPG and $80,000 for those switching to
electricity. 
The offer will be open until the end of 2003 for public minibuses over 10
years old and until the end of 2004 for those under 10 years old. 
Private minibuses will not be offered the grant but will be exempt from the
first registration tax after converting to LPG, which is equivalent to four
per cent of a vehicle's cost of about $300,000. 
The Government expects at least 68 per cent of public minibuses and 50 per
cent of private ones to take part. 
The switch will also largely meet the vehicle emission reduction target set
by Chief Executive Tung Chee-hwa in 1999. 
Lily Yam Kwan Pui-ying, Secretary for Environment and Food, said the package
would be sufficiently attractive to minibus operators, as the saving in fuel
costs would help cut operating costs. 
At present, LPG costs about $2.20 per litre and diesel about $6 per litre.
The diesel price includes duty of $1.10. 
Mrs Yam said the scheme was not made compulsory because 32 per cent of those
operators surveyed might suffer operating losses, with fuel savings offset
by longer journeys needed to travel to distant LPG refuelling stations. In
the worst case, an operator could lose up to $36,000 a year as a result of
the switch. 
She said either increasing seating capacity from 16 to 24, as proposed by
some minibus operators, or raising fares by two to 12 per cent might
compensate for the loss but was not practicable. 
"Under the economic situation, increasing fares would bring an extra burden
to passengers, yet some of the minibuses are operating with spare capacity,"
she said. 
Chan Man-chun, spokesman for the Environmental Light Bus Alliance, described
the policy as "a voluntary scheme with no choice" as the deadline for
conversion fell too soon. 
He feared the survival of diesel minibuses would be threatened if the
Government sought to tighten emission standards and raised diesel duty.
There is no plan to retire diesel minibuses compulsorily, unlike diesel
taxis, which must be off the roads by 2005. 
Hiew Moo-siew, chairman of the GMB Maxicab Operators General Association,
welcomed the scheme, but was still sceptical of the cost-effectiveness of
LPG minibuses. 
"We are still not sure if we will be the first batch to join the scheme
because we don't find it very cost-effective," he said. 
Leung Hung, chairman of the Federation of Public Light Bus Operators, hoped
the grant could be increased to $100,000. 

Alok Jain

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