If it is to improve the quality of the two major franchised bus companies' services, the Government has two options:
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(a) to improve the performance of the present owners; and
(b) to take their assets over under the powers contained
in section 24 of the Public Omnibus Services Ordinance and to acquire powers either to retain them in the public sector or to sell them to new private franchise holders. urray
As regards the third possibility of leaving the two companies in their present ownership whilst imposing on them a new management from without, in practice neither bus company would voluntarily accept that the Government should control their business in this way without acquiring ownership of the majority of their shares. In that case the Government would find itself in a situation analogous to (b) above, as it would then have legal power to control the companies.
Kowloon Motor Bus Company
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The Kowloon Motor Bus Company (1933) Limited (KMB) is per forming reasonably well and it is taking steps to further improve its performance. At this stage, therefore, there is no need to consider the option of taking over its assets. A course of action to improve the performance of KMB is set out in Annex B and this will be pursued with the Company.
China Motor Bus Company
6
In the light of the Report contained in Annex B to XCC(79)86 serious consideration has been given to the option of revoking the Company's franchise and taking over its assets. If this were to be done, the intention would be for the Government to run the services on a temporary basis only prior to granting a franchise to another operator in the private sector. Declarations of interest in acquiring such a franchise have already been expressed by a number of substantial well established companies.
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A difficulty in this course of action is that under the present law (section 24 of the Ordinance) the Company's assets could be taken over by the Government for only one year, at the end of which time they would automatically revert to CMB. This provision would have to be amended if the Government were to avoid CMB' getting into a position. where it could under mine the Government's cho'sen new operator by uncooperative delaying tactics leading to demands for an extremely high price for its assets, on threat of either selling them abroad or simply refusing to sell them to anyone.
CONFIDENTIAL
機密