XN000022-1974-12-13 — Page 3

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FRIDAY, DECEMBER 13, 1974.

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UNDER PROVISIONS IN THE BILL, THE GOVERNOR WOULD BE EMPOWERED TO APPOINT UP TO TWO DIRECTORS TO THE BOARDS OF ALL FRANCHISED COMPANIES. THIS WOULD ENABLE THE GOVERNMENT TO PARTICIPATE, AT FIRST HAND, IN THE COMPANIES' DECISION-MAKING. THE MAJOR RESPONSIBILITY OF GOVERNMENT DIRECTORS WOULD BE TO REPRESENT THE PUBLIC INTEREST.

ON THE QUESTION OF GOVERNMENT SANCTIONS, THE SPOKESMAN EMPHASISED THAT, UNDER THE PROPOSED LEGISLATION, THE GOVERNMENT WOULD BE GIVEN THE POWER TO WITHDRAW A SPECIFIC ROUTE ON WHICH A COMPANY HAD FAILED TO PROVIDE A SATISFACTORY SERVICE. AT THE SAME TIME, IT COULD WITHDRAW ADDITIONAL AND MORE LUCRATIVE ROUTES IF THIS WERE NECESSARY TO PORVIDE A VIABLE PACKAGE OF ROUTES TO ANOTHER BUS COMPANY.

HE ADDED THAT THESE SANCTIONS WOULD DISCOURAGE A COMPANY FROM DELIBERATELY NEGLECTING ITS LEAST PROFITABLE ROUTES. MOREOVER, IF IT WERE NECESSARY, THE WHOLE FRANCHISE COULD BE REVOKED.

IF AN EMERGENCY EXISTS AND A FRANCHISE IS SUSPENDED, THE BILL WOULD ENABLE THE GOVERNMENT TO TAKE POSSESSION OF A COMPANY'S BUS PROPERTY, WITH COMPENSATION PAYABLE FOR THE DURATION OF THE EMERGENCY. SIMILAR POSSESSION BY THE GOVERNMENT OF A COMPANY'S BUS PROPERTY MAY ALSO TAKE PLACE IF A COMPANY'S WHOLE FRANCHISE IS REVOKED, AGAIN WITH COMPENSATION DEINO PAID.

THE BILL ALSO PROVIDES FOR FINES OF UP TO $10,000 FOR A FIRST OFFENCE, UP TO $20,000 FOR A SECOND OFFENCE AND UP TO . $50,000 FOR ALL SUBSEQUENT OFFENCES. THE FINES COULD ONLY BE APPLIED ON THE ORDER OF THE GOVERNOR IN COUNCIL. THESE FINES ARE INTENDED, IN PRACTICE, TO BE IMPOSED FOR INFRINGEMENTS OF THE PROVISIONS OF THE BILL, OR OF A FRANCHISE, WHERE THE GREATER PENALTY OF THE REVOCATION OF ONE OR MORE ROUTES WOULD NOT BE JUSTIFIED.

IN VIEW OF THE VARIOUS CONTROLS CONTAINED IN THE BILL, THE GOVERNMENT HAS DECIDED NOT TO SEEK TO ACQUIRE ANY EQUITY IN KMB OR CMB, AS HAD PREVIOUSLY BEEN INTENDED.

+THE GOVERNMENT FEELS THAT NO PURPOSE WOULD NOW BE SERVED BY THE ACQUISITION OF EQUITY IN VIEW OF THESE BUILT IN CONTROLS+, THE SPOKESMAN ADDED,

HE ALSO POINTED OUT THAT THE BILL WAS DESIGNED TO CONTROL ANY BUS COMPANY, INCLUDING ANY THAT MIGHT BE ESTABLISHED IN LANTAU, THE NEW TOWNS OR ELSEWHERE.

IN CONCLUSION, THE SPOKESMAN SAID: THE OVERALL EFFECT OF THE BILL WILL BE TO PROVIDE POWERS TO ACHIEVE CLOSER GOVERNMENT CONTROL OVER THE BUS OPERATIONS OF FRANCHISED COMPANIES WITH THE AIM OF IMPROVING SERVICES FOR THE PUBLIC. AT THE SAME TIME, PARTICULARLY WITH THE APPOINTMENT OF GOVERNMENT DIRECTORS TO THE BOARDS OF EACH COMPANY, A FRAMEWORK FOR CLOSER CO-OPERATION SHOULD BE CREATED BETWEEN THE COMPANIES AND THE GOVERNMENT WHICH CAN ONLY BE TO THE BENEFIT OF THE PUBLIC AS WELL AS THE COMPANIES THEMSELVES.+

IF THE BILL IS ENACTED, NEW FRANCHISES ARE EXPECTED TO COME INTO OPERATION ON FEBRUARY 15, 1975 WHEN THE PRESENT ORDINANCES GOVERNING THE (PERATIONS OF KMB AND CMB WILL BE REPEALED.

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