Commissioner for Transport,
Transport Department,
Guardian House,
32, Oi Kwan Road,
Hong Kong.
Dear Sir,
Form No. G-5-A
Annex A
9th October, 1985
Extension of Franchise
In pursuance of clause 6 (3) of the Public Bus Services Ordinance, we hereby apply for two extensions of two years each of the franchise for a total period of four years from 1st September 1991 to 31st August 1995.
The restoration of the full ten year franchise period is essential to enable KMB to make long term planning and commit capital investment necessary for the continuous provision of a proper and efficient service as required by the franchise.
As you are aware, the Company is building a large depot in Shatin and is planning for
for another major depot at Kowloon Bay, the availability of finance from bankers for the construction of these depots will depend on the length of our franchise. It is possible to obtain a ten year finance for bus depot construction. liowever we can only obtain finance for a period which is equal to the remaining period of our franchise. At present this period is only 6 years (now to 31st August 1991). For bus depot construction which is a long term capital investment, it is desirable to obtain a ten year finance (equal to the maximum length of our franchise at any one time) in order to spread out the impact of interest cost on fares.
Another problem facing us is that because we do not have a ten year franchise, it is impossible for us, for accounting purposes, to determine the depreciation of bus depots built on land purchased by private treaty grant.
As construction of our Shatin depot shall soon commence we hope that Government will not later than by the end of this year restore our franchise to its full ten year period.
REC
رم
Yours faithfully,
THE KOWLOON MOTOR BUS CO., (1933) LTD.
Original signed by
Lawrence E. Louey General Manager