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Power to purchase property
I have explained the present and proposed measures for "temporary possession" but there is no provision, under the existing Ordinance, to allow the Government to purchase property used or kept by a franchisee for maintaining a bus service.
Powers to purchase an incumbent franchisee's buses and spare parts would help to reduce the gearing-up time and the capital outlay of the replacement operator. Moreover, the use of part of the existing fleet would also enable the replacement For these operator to maintain bus services at reasonable and acceptable fares. reasons, we propose, under clause 5 of the Bill, to give the Administration the power to purchase buses and spare parts which are considered essential for bus operations.
Compensation
Some critics may argue that taking temporary possession of, let alone I wish to assure the purchasing, a bus company's property are drastic measures. Council that such powers would only be used as a last resort under very special circumstances. In order to safeguard the legitimate interests of the bus company concerned and its shareholders, we have gone to great lengths to set out the compensation provisions in the Bill. Furthermore, we have limited, quite deliberately, the power of purchase to buses and spare parts and we have excluded specifically the purchase of lands and buildings.
We recognise that the bus company affected should be given fair and reasonable compensation based on open market values. We certainly support the principle that bus companies should not be put in a situation which results in their losing out financially because their property is leased initially by the Government. To reiterate, we accept the principle that the total rent payable to a bus company together with the disposal value of the property after the lease expires should not be less than what the bus companies would have realised had it been able to dispose of the property in question at the time when it ceases to operate. I can assure Honourable Members that all these factors will be taken into consideration in the arbitration process in the event that the Government and the bus company concerned cannot agree on the compensation amount.
Some concern has also been expressed that should the Government take possession of a fleet of buses, the Government can pick and choose the newest vehicles. This indeed is an option but newer buses would command a higher rental and thus the bus companies would not lose out in this regard.