XN000022-1975-02-05 — Page 5

4

WEDNESDAY, FEBRUARY 5, 1975

INCREASE IN TELEPHONE CHARGES

UNOFFICIALS GIVE CONDITIONAL APPROVAL

********

THE FINANCIAL SECRETARY, MR. PHILIP HADDON-CAVE, SAID THIS AFTERNOON THAT THE INGREASED TELEPHONE CHARGES WHICH SUBSCRIBERS WOULD BE CALLED ON TO MAKE UNTIL THE COMMISSION OF INQUIRY'S RECOMMENDATIONS HAVE BEEN CONSIDERED WOULD BE, IN EFFECT, IN THE NATURE OF +PROVISIONAL DEPOSITS.

HE MADE THE STATEMENT IN HIS SPEECH WINDING UP THE DEBATE ON THE RESOLUTION TO REVISE TELEPHONE CHARGES WHICH WAS SUBSEQUENTLY APPROVED. THE REVISION INCLUDES A 28-1/2 PER CENT INCREASE IN RESIDENTIAL LINES AND A 29 PER CENT INCREASE IN BUSINESS LINES.

MR. HADDON-CAVE WAS COMMENTING ON THE ACCEPTANCE OF THE RESOLUTION BY UNOFFICIAL MEMBERS OF LEGISLATIVE COUNCIL SUBJECT TO TWO QUALIFICATIONS.

THE QUALIFICATIONS, ANNOUNCED BY DR. THE HON. CHUNG SZE-YUEN, WERE, FIRST, THAT THE INCREASE IN RENTAL CHARGES SHOULD NOT BE REGARDED AS GENERAL REVENUE OF THE COMPANY, BUT AS A SEPARATE IDENTIFIABLE ACCOUNT PENDING THE FINDINGS AND RECOMMENDATIONS OF THE COMMISSION OF INQUIRY.

SECONDLY, THAT NO DIVIDEND PAYMENTS SHOULD BE MADE BY THE COMPANY UNTIL THE COMMISSION OF INQUIRY HAD REPORTED ITS FINDINGS.

HADDON-CAVE SAID: +1 BELIEVE THESE QUALIFICATIONS WILL HELP TO MAKE IT DOUBLY CLEAR THAT THESE INCREASED CHARGES ARE PROVISIONAL.+

MR.

THE FINANCIAL SECRETARY ADDED THAT THE FACT THAT SOME IMMEDIATE STEPS WERE +ABSOLUTELY NECESSARY DID NOT MEAN THE LONG TERM SOLUTION WAS BEING PREJUDGED IN ANY WAY.

EARLIER IN MOVING THE RESOLUTION, MR. HADDON-CAVE DESCRIBED IT AS ONE OF THE INTERIM MEASURES REQUIRED TO MAINTAIN TELEPHONE SERVICES, WHILE A COMMISSION OF INQUIRY EXAMINES THE AFFAIRS OF THE TELEPHONE COMPANY.+

HE RECALLED THAT THE OTHER MEASURES WERE THAT THE COMPANY SHOULD MAKE NO DIVIDEND PAYMENTS IN 1975- A GOVERNMENT DIRECTOR SHOULD BE APPOINTED TO THE BOARD AND THAT ROYALTY PAID BY THE COMPANY FOR 1974 AND 1975 SHOULD BE WAIVED.

MR. HADDON-CAVE ADDED THAT THE FOUR INTERIM MEASURES FORMED A PACKAGE WHICH MUST BE CONSIDERED AS A WHOLE. +WHATEVER THEIR CAUSE THE COMPANY'S DIFFICULTIES ARE REAL AND, I THINK, ARE GENERALLY RECOGNISED TO EXIST.+

/REFERRING TO