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WEDNESDAY, AUGUST 13, 1975
BUS COMPANIES PROFITS TO BE CONTROLLED
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LEGISLATIVE MACHINERY TO REGULATE THE PROFITS OF THE TWO BUS COMPANIES WERE AMONG A NUMBER OF AMENDMENTS INCORPORATED INTO THE PUBLIC OMNIBUS SERVICES BILL WHICH WAS PASSED BY THE LEGISLATIVE COUNCIL THIS AFTERNOON.
UNDER THE PROFIT CONTROL SCHEME, BOTH THE CHINA MOTOR BUS COMPANY AND THE KOULOON MOTOR BUS COMPANY WILL BE REQUIRED TO SET UP A DEVELOPMENT FUND. THIS IS DESIGNED TO ENSURE THAT EXCESS PROFITS WILL BE RETAINED WITHIN THE BUS OPERATION AND USED FOR DEVELOPMENT PURPOSES, INCLUDING THE PURCHASE OF LUSES, SPARES AND THE DEVELOPMENT OF DEPOTS. THE FUND COULD ALSO BE USED TO DELAY FARE INCREASES IN FUTURE YEARS,
IF THE PROFITS OF EITHER CMD OR KMD WERE TO FALL BELOW THE PERMITTED LEVEL TO BE STIPULATED IN ITS FRANCHISE. THE COMPANY CONCERNED WOULD BE PERMITTED TO DRAW FROM THE DEVELOPMENT FUND THE BALANCE REQUIRED TO BRING ITS RETURN UP TO THE PERMITTED LEVEL.
THE COMPANIES WILL ALSO HAVE TO PAY INTEREST ON THE BALANCE IN THE DEVELOPMENT FUND. THE INTEREST RATE WILL BE STIPULATED IN THE FRANCHISES. HOWEVER, NO INTEREST WILL BE PAID IN A YEAR WHEN THERE ARE INSUFFICIENT PROFITS 10 PROVIDE THE COMPANY WITH THE PERMITTED RETURN.
INTEREST PAYMENTS WILL DE DEDUCTED FROM PROFITS AND WILL
DE ADDED TO THE DEVELOPMENT FUND.
A GOVERNMENT SPOKESMAN SAID THAT THE REASON FOR THE CHARGE IS THAT THE TRAVELLING PUBLIC WILL DE PROVIDING THE EXCESS PROFITS WHICH ARE PLACED IN THE FUND.
TO THIS EXTENT, THE EXISTENCE OF THE FUND WILL REDUCE THE NEED TO BURROW CAPITAL FROM OUTSIDE SOURCES ON WHICH INTEREST WOULD DE PAYABLE, AND IT IS ONLY RIGHT THAT, IN THESE CIRCUMSTANCES, THE COMPANY SHOULD PAY A CHARGE EQUIVALENT TO TineLEST ON THE AMOUNT STANDING IN THE FUND,+
UNDER THE BILL, THE PROFIT CONTROL SCHEME WILL DE REVIEVED EVERY 100 YEARS.
THE EXISTING FRANCHISES OF BOTH KMD AND CMB WILL EXPIRE ON AUGUST 31 AND THE NEW FRANCHISES TO BE ISSUED ULDER THE POVERS PROVIDED IN THE BILL WILL TAKE EFFECT FROM SEM/TENBUR 1. DETAILS OF THE FRANCHISES ARE EXPECTED TO BE ANNOUNCED LATER.
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