CO129-555-1 Hong Kong Tramways Ltd.- petition 10-7-1935 - 4-10-1935 — Page 4

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Tramway Company should be relieved of the necessity

of paying Government from 1939 onwards the increased

royalty of 25% of profits which will then become

due.

5. The Hong Kong Government have dealt fully

with the Tramway Company's complaints. To the

complaint referred to in paragraph 2 above, the

Government reply that the Company chosen to operate

the service was selected because it had already had

experience in working bus services and because it

was considered that it would be able to operate the

service more efficiently than the petitioner.

6. To the claim that Government should not

have permitted the Company operating the bus service

to introduce second-class fares on competitive routes,

the Government reply that such variation was in

accord with the terms of the notice inviting tenders,

and deny the Tramway Company's right to restrict the

development of bus services in this way. The

Government also repudiates the suggestion that the

successful tenderer for the exclusive licence to

run buses was gambling.

7.

On the wider question whether the

Tramway Company is being subjected to unfair

competition, the Hong Kong Government points to the

fact that the Company's dividends have been

maintained at a high level since the introduction

of motorbus competition. It should, however, be

remembered on the Company's side that these high

dividends all relate to years before the recent

introduction by the buses of second-class fares on

competitive routes. As regards the effects of the

latter