XN000022-1975-11-19 — Page 3

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WEDNESDAY, NOVEMBER 19, 1975

+THESE ARE TWO DIFFERENT ISSUES,+ DR. CHUNG SAID.

+RETURN

ON SHARE-HOLDERS INVESTMENT IS IN THE FORM OF PROFIT MADE FOR THE SHARE-HOLDERS WHEREAS THE RETURN ON MANAGERIAL EFFORT IS IN THE FORM OF JOB SECURITY, SALARIES AND FRINGE BENEFITS PAID OR AWARDED TO THE MANAGERIAL STAFF.+

WHEN ALL THE FIXED ASSETS OF THE COMPANY HAD BEEN WRITTEN DOWN AND THE SHAREHOLDERS' INVESTMENT REPAID, THEY COULD HARDLY CLAIM THAT THEY STILL OWNED THE COMPANY, HE SAID.

+IT WOULD THEREFORE BE INAPPROPRIATE AND ILLOGICAL FOR THE GOVERNMENT AND THE TRAVELLING PUBLIC TO ALLOW THE SO-CALLED SHAREHOLDERS, WHO IN FACT HAVE NO INVESTMENT IN THE COMPANY, TO PERPETUATE THEIR RIGHT FOR MAKING PROFITS YEAR AFTER YEAR FROM THE TRAVELLING PUBLIC,+ HE STRESSED.

HE HOPED THE GOVERNMENT WOULD SETTLE THIS MATTER OF PRINCIPLE FAIRLY AND JUSTLY BEFORE CONSIDERING. FURTHER FARE

INCREASES.

THE HON. HILTON CHEONG-LEEN ABSTAINED FROM VOTING ON THE MOTION.

WHILE HE HAD NO OBJECTION TO THE WAIVING OF ROYALTY FOR THE THREE YEARS, HE DID NOT AGREE THAT THE FARE INCREASES SHOULD BE INTRODUCED FROM NEXT MONTH.

+ INSTEAD I WOULD PREFER THAT SUCH INCREASES BE INTRODUCED AS OF JULY 1, 1976, AT WHICH TIME THE WORLD ECONOMY AND THE HONG KONG ECONOMY COULD BE REGARDED WITH A BRIGHTER AND CLEARER DEGREE OF HOPE AND ANTICIPATION,+ HE SAID.

HE ASKED IF IT WAS MORE APPROPRIATE, WHILE ALL SECTIONS OF THE COMMUNITY HAD TIGHTENED THE IR BELTS TO SURVIVE THE PRESENT DIFFICULT TIMES, THAT THE PUBLIC UTILITIES ALSO ACT SIMILARLY AND BE CONTENT WITH SMALLER RETURNS AND POSTPONE ANY INCREASE TO BETTER TIMES.

MR. CHEONG-LEEN QUOTED A RECENT NEWS REPORT WHICH SAID THE UNITED NATIONS ECONOMIC COMMISSION FOR EUROPE HAD PREDICTED THAT FOREIGN TRADE IN MOST WEST EUROPEAN COUNTRIES WOULD DECLINE MORE STRONGLY THAN ECONOMISTS ANTICIPATED ONLY A SHORT TIME AGO.

HE GRANTED THAT THE GOVERNMENT WAS COMMITTED TO ENSURING A FAIR RETURN TO THE PUBLIC UTILITIES AND HAD THE RESPONSIBILITY TO ENSURE THAT THEY CONTINUE TO OPERATE EFFICIENTLY.

HE ASKED HOWEVER WHICH WAS MORE PRESSING: THE INTEREST OF THE MAJORITY WHO WERE CONCERNED WITH RISING COSTS WITHOUT RISING INCOME, OR THE IMMEDIATE CLAIMS FOR FAIR HETURNS TO THE UTILITIES WHICH HAD A SIGNIFICANT ROLE IN KEEPING LIVING COSTS STABLE.

/MR. CHEONG-LEEN

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