Services Ordinance provides all the powers and sanctions necessary to ensure the satisfactory operation of franchised bus services. The memoranda of understanding would amplify what constitutes "a proper and efficient public omnibus service" under section 12 of the Ordinance. Failure to comply with their terms would constitute a breach of franchise which would allow the Government to impose sanc- tions under the Ordinance. During discussions with the two companies on the memoranda of understanding, this relationship of the memoranda to the Ordinance has very clearly emerged.
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As regards the roll-forward of KMB and CMB's franchise, referred to in paragraph 1(e) and (f) above, none of the conditions have yet been met and it is proposed to seek Council's advice on this at a later date when the memoranda of understanding have been agreed and the Ordinance has been amended.
Financial Implications
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The financial implications for the Government of the proposed fare increases is to increase the student subsidy from an estimated $41 million in 1980-81 to an estimated $65 million - an increase of $24 million,
The Transport Advisory Committee
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The Transport Advisory Committee (TAC) has considered the proposals contained in this memorandum on 13th and 27th November 1979. Its views are summarised below:
(a)
(b)
(c)
TAC agreed that fare increases were necessary, but felt that the timing of any increases was very important. Some members considered that increases should not be approved until agreement had been reached on the memoranda of understanding.
TAC was worried about public resentment if fares were raised in advance of, or near to the completion of, the Modified Initial System of the MTR. They also considered that a phased implementation of fare increases, on cross-harbour routes first and other routes later, was unacceptable, because it would appear to the public to be a deliberate attempt by the Government to make the MTR more competitive.
Some TAC members were sceptical about CMB's
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