CMB_1991 — Page 10

Chairman's Statement 1991 (Continued)

FACILITIES FOR PASSENGERS

The erection of shelters for passengers waiting for buses is underway again with priority being given to bus termini used by large numbers of passengers.

The Company's "hotline" telephone enquiry service received over 135,000 calls during the year.

In order to ensure that passengers are informed of major changes to bus services, special leaflets are produced and distributed to passengers and potential passengers in the areas affected by the changes.

STAFF WELFARE

Following the implementation of an improved retirement scheme for daily-rated employees in 1990, new schemes were devised for monthly-rated staff. These come into effect on 1st September, 1991.

INLAND LOT 5532, TSAT TSE MUI ROAD, AND INLAND LOT 7178, KING'S ROAD, NORTH POINT

Following agreement in principle announced in July 1991, on 6th November, 1991 the Company announced that a conditional agreement had been signed with Swire Properties Limited to establish a joint venture company, which would be 60 per cent, owned by Swire Properties and 40 per cent. owned by the Group, and to purchase the Group's sites at Tsat Tse Mui Road, North Point and at King's Road, North Point for a consideration of $980 million, and to redevelop these sites for residential and commercial purposes.

Disposal of these properties is subject to the Company's shareholders' approval and a circular to shareholders containing details of the joint venture and disposal will be despatched as soon as practicable. The joint venture should enable the Group to share in future profits arising on redevelopment of the sites through the Group's 40 per cent, equity interest, and should enable the Group to benefit from Swire Properties' extensive experience in property development in Hong Kong.

FUTURE OUTLOOK

There is a discernible trend of decreasing passenger demand for bus services on Hong Kong Island despite increases in bus- kilometres operated, improvements in service reliability and the deployment of air-conditioned buses. In order to achieve optimum operating efficiency, routes will be closely monitored to ascertain where adjustments are warranted in order to better match the supply of services with the new levels of passenger demand.

As I forecast last year, there has been no significant improvement in traffic flow and I remain pessimistic about any prospect of our buses being freed from the traffic congestion which so often disrupts our services. Even the Island Eastern Corridor, which is classified as an Expressway

and should provide a fast and efficient means of carrying commuters from Eastern District to Wan Chai and Central, is frequently congested in the Causeway Bay area. The Company will have to consider re-routing services and eliminating certain bus stops in order to improve journey times.

Future route developments will see the introduction of more air-conditioned services, and the opening of new routes to new housing estates.

The Government recently awarded a franchise to another company to operate a public bus service between Central and MacDonnell Road. A similar route was withdrawn by CMB in 1987 after making heavy losses. The Company is watching this development closely to ensure that the Company's interests are protected.

APPRECIATION

The Directors appointed by the Governor under the Public Bus Services Ordinance were the Commissioner for Transport, Mr. Gordon SIU Kwing-chue, J.P., and the Deputy Secretary for Transport (Transport Services), Mr. LUI Hau-tuen, J.P., and his successor Mr. Andrew LEUNG Kin-pong, J.P., from 7th January, 1991. On behalf of the shareholders and my fellow Directors I would like to express our appreciation of their participation in the deliberations of the Board.

In conclusion, I would like to thank our staff for their hard work and dedication to serving our customers during a very challenging year.

NGAN Shing-kwan Chairman

Hong Kong, 8th November, 1991.

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