Lantau ferry fares are about to go down, but before that happens taxi charges are likely to go up.

The Legislative Council has approved a Transport and Housing Bureau plan to tip another HK$40m in subsidies into outlying island ferry services. The government already spends nearly HK$40m a year on subsidies, mostly on pier maintenance.

The new funds will be used to subsidise fares to Mui Wo, Cheng Chau and other main island routes. However, we won’t feel the effects of these until after the next three-year islands ferry tender is completed in 2011.

Meanwhile, Lantau taxis have joined urban and New Territories taxi drivers in asking for a HK$2 hike in flagfall because of higher operating costs.

The increase would amount an average 4.11% increase in Lantau taxi fares, according to a bureau policy paper.

The net income of Lantau taxi owners has fallen as much as 13% in the first ten months of 2010 compared with 2009, – a result of higher operating costs, the bureau says, although it does not say what these are.

The LegCo Transport Panel will consider the price increases on Friday.