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Reply:
Mr President,
The China Motor Bus Company Limited's franchise will expire on 31 August 1995. The Administration is prepared to award CMB a new franchise. This has been supported by the Transport Advisory Committee in principle. We have been negotiating the terms and conditions with CMB for several months and have now reached the final stages of this exercise. I expect to be able to put a recommendation to the Executive Council within the next few weeks.
Let me provide some basic facts: CMB now operates about 1000 buses on 133 routes and carries some 540,000 passengers per day. The Administration's prime consideration is to ensure that this level of demand can be satisfied through the provision of an efficient bus service. In this respect, the main criterion in determining whether or not CMB should be awarded a new franchise is whether CMB can provide a standard of service which is acceptable.
Admittedly, there have been many complaints about CMB and its service. It is not for the Administration to defend the company but it is our responsibility to assess CMB's performance in a dispassionate manner.
The Administration's conclusion is that, whilst there is certainly room for CMB to further improve its overall performance there have nonetheless been improvements since its current franchise was granted in September 1993 when 26 routes were excised. Transport Department's surveys show that CMB has been able to meet the scheduled requirement. In short CMB at least deserves a pass mark and for that reason we are prepared to offer a new 3-year franchise to CMB which will comprise a reduced network of routes which we believe CMB can effectively manage.
Regarding accountability on the part of the CMB management, the measures now in place will be retained and further steps taken. At present the Transport Department closely monitors CMB's daily services and where deficiencies are found warning letters will be issued to require CMB to rectify the situation. Failure to comply will result in the imposition of severe financial penalties which have to be borne by their shareholders. These procedures follow the provisions laid down in the Public Bus Services Ordinance. As part of the new franchise conditions, we shall also make it a mandatory requirement for CMB to disclose certain financial and operational information. At present, the provision of such information is only on a voluntary basis.
Mr President, the Administration is satisfied that, all factors taken into account, the award of a new franchise to CMB is in the interests of the travelling public.
End/Wednesday, June 14, 1995