Chairman's Statement cont'd
Street, Kwun Tong and Jordan Road Ferry Piers. It also expanded its home-delivery business.
HYFCO Ferries, Ltd.'s only investment was a minority interest in Sealink Ferries Ltd. formed to operate a ferry service between Hong Kong and Macau which was expected to commence in mid 1983.
Associated Company
Government reply was awaited to Authian Estates Ltd.'s application for developing Tai Wai Yuen at Silvermine Bay, Lantau Island.
Outlook
Ferry Services
Cross Harbour ferry services face increasing competition from the Mass Transit Railway which now extends to Tsuen Wan and by 1985 will run along the northern shore of Hong Kong Island. The MTR indirectly affects ferry services to outlying districts, because ferries deployed on cross harbour routes during weekdays are diverted to serve heavy recreation traffic during weekends and public holidays. Therefore any cutback in cross harbour services will affect the financial viability of outlying routes as operating costs are now shared between these routes and ferries utilised to their maximum capacity. Government transport authorities and your Directors recognize that the MTR has disrupted public transport journeys and new patterns of demand are emerging, resulting in loss of ferry traffic to the MTR and to other modes of public transport. At present the Company is working on a five years plan with Government in order to assess the future network of ferry services and to enable ferry operations to give a reasonable return.
Negotiations are still in progress with Government on the new ferry franchise, with an extension granted for the old one up to 30th June 1983. Your Directors consider that if your Company is required under the Ferry Services Ordinance and a new franchise to start or continue to maintain socially desirable, but loss making services then there should be equality of treatment with the MTR and the Company should be compensated in the same way as the MTR as laid down in Section 20 of the Mass Transit Railway Corporation Ordinance, Chapter 270 in which "it is fully compensated by the Government in respect of any direction requiring the Corporation to act contrary to prudent commercial principles".
China Ferry Services
Some growth in passenger traffic is expected on three hoverferry services to China and your Directors will continue to explore the possibility of operating more ferry routes there.
Shipyard
The Shipyard apart from maintaining your Company's fleet is also looking to outside work in order to reduce operating costs and had submitted a tender for the 15 police launches which had now been withdrawn by Government.
Property Development
The tender for the construction of the superstructure of Block III HYFCO Industrial Building was awarded in 1983 and the building is scheduled for completion in 1984. This building will also house our shipyard workshops which had been accommodated in temporary buildings to give time for the reclamation site to settle firmly before construction commences.
Your Company commenced to receive income from its investment in the Nanhu Hotel in Guangzhou as from the 1st January 1983. Also the Silvermine Beach Hotel and annexes will start to produce income during the year.
Trading Services
During 1983, efforts will be made to expand tourist business by organising more tour groups to maximise utilisation of the Company's facilities and services.
Another mini-supermarket at North Point West Passenger Ferry Pier is expected to commence operations in 1983.
Hong Kong - Macau Ferry Services
Delivery of the first HM5 sidewall hoverferry is expected in May 1983 to Sealink Ferries Ltd. After crew training and sea trials here, the hoverferry service to Macau is anticipated to commence in mid 1983.
Appreciation
1982 had been a year fraught with problems in Hong Kong and worldwide and your Company have had its share. I would like to place on record our appreciation of the continued hard work and loyalty of all the staff in your Group of Companies.
Lau Chan Kwok Chairman
Hong Kong, 8th March, 1983