XN000022-1974-01-09 — Page 3

Weunesday, January 9, 1974

In tendering its advice, the Committee made it clear that it intended

to pursue with the telephone company the steps that could be taken to

enable even more funds to be generated internally for increased capital

expenditure in order to reduce the waiting list for telephones which presently

stood at about 31,000.

"The committee is also looking into the company's maintenance programme

which has tonded to be inadequate at times as the cacophony of noise interference

sometimes heard in the middle of telephone conversations bears out.

The government has taken note of this intention and has decided to

review the position when. the Advisory Committee's report on its discussion with

the Telephone Company is available," he said.

Dr. the Hon. S.Y. Chung also spoke in support of the motion. He noted

that with the increased rental charges the company should be able to do very

much in its expansion programme.

"As the company is operating under a franchise of monopoly, the

government has a responsibility to ensure that the Hong Kong community has

efficient and adequate telephone services.

"I therefore urge that the government should exert greater pressures

on the company with particular respect to the adequacy of its overall development

programme in meeting the increasing needs of Hong Kong people whether they are

residing in urban, sub-urban or rural areas," he said.

Dr. Chung said that due to "depreciation of money and appreciation

of telephone value" the company should be permitted to raise the rental

charges so as to maintain a reasonable annual return of around 10 to 11 percent

on average capital employed.

However, he felt that improvements should be made by the company in

respect of supply and demand of telephones, and the services it provided

in the New Territories and outlying islands where telephone communication

was badly needed.

13

1