CONFIDENTIAL
Mr. A. Nicoll's Memorandum on Cross Harbour Transportation
At the present time it appears incumbent on Government to examine carefully the state of the existing cross-harbour transport services and to review the methods employed therefore with the object of instituting the most efficient means of handling the present and future traffic loads.
II. The Star Ferry Co., pays no royalty to Government for the privilege of running its service between P.P.26 at Ice House Street and P.P's 32 & 33 at Tsim Sha Tsui. The Company hold the lease for P. P. 26, but the Hong Kong & Kowloon Wharf & Godown Co., hold the leases for P.P's 32 & 33. All leases expire in December, 1949, in common with other pier leases throughout the Colony.
III. The Company operated its service before the war with six vessels, of which one was sunk outside the waters of the Colony, two are likely to be total wrecks and three can probably be repaired in time.
IV. The present service between Tsim Sha Tsui and Ice House Street is being maintained by the Hong Kong & Yaumati Ferry Co., who, although they suffered heavy losses in boats, were more fortunate in being able to retain a part of their fleet in running order during the occupation.
V. In the normal course of events had war not intervened, I think undoubtedly Government would have refused to extend the leases of the pier used by the Star Ferry Co., in 1949. It must be remembered that had Government wished, it could at any time in the past twenty-three (?) years have granted permission for a second ferry to operate between Kowloon Point and any point in Hong Kong of its choosing.
VI. The Hong Kong & Yaumati Farry Co's franchise runs for a period of 15 or 16 years from 1933 when the Vehicular Ferry Service was inaugurated. It, therefore, expires about 1949. This Company pays a very substantial royalty to Government,
VII. In 1949 Government would have found itself in a position to call for tenders for the operation of all the ferry services under one operator.
VIII, One way to jump the present difficulty and give reasonable tenure to a successful operator is to cancel both the Hong Kong & Yaumati Ferry Company's franchise and the leases of the two Star Ferry Piers at the end of this year, making an arrangement with the Yaumati Ferry Company to continue to operate the Star Ferry Service till that time. Tenders would meanwhile be invited for the running of all the ferry services in the Colony for a period not exceeding 15 years as from 1st January, 1946. A fifteen year period is probably the shortest term that would be agreed to by any operating company.
IX. If the Star Ferry Co., became the successful tenderer, it would have to build or buy a large mmber of vessels and would require considerable capital to do so, but Government would take over the maintenance of the two old piers and the Company would have no grounds for claiming compensation in respect of the pier leases. The Yaumati Co., would, however, claim damages for early cancellation of their franchise rights.
X.
If, on the other hand, the Yaumati Ferry Co. were the successful tenderer (a much more likely supposition) the Star Ferry Co., would cease to exist, but would claim compensation for loss due to being deprived of the use of the piers for four years. I doubt whether the Star Ferry Co., could claim damages for being deprived of the ferry concession.
XI. of the two possible claims, it seems that that of the Yaumati Ferry Co. would be the larger by a considerable amount. There is, of course, the possibility that neither the Star Ferry Co., nor the Yaumati Ferry Co., would be the successful tenderer and Government would then be faced with compensating both the old operating concerns, In present circumstances this event is probably e very remote possibility.
Just