XN000022-1976-06-23 — Page 2

WEDNESDAY, JUNE 23, 1976

GOVERNMENT URGED TO TAKE URGENT STEPS TO MONITOR

TELEPHONE COMPANY'S OPERATIONS

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THE HON. HILTON CHEONG-LEEN TODAY URGED THE GOVERNMENT TO TAKE URGENT STEPS TO ACQUIRE THE NECESSARY STAFF TO MONITOR WITH CREDIBILITY AND RELIABILITY THE FINANCIAL AND TECHNICAL OPERATIONS OF THE TELEPHONE COMPANY.

HE WAS SPEAKING AT THE RESUMED DEBATE ON THE TELEPHONE (AMENDMENT) BILL 1976 WHICH SEEKS TO GIVE LEGISLATIVE EFFECT TO SOME OF THE MORE PRESSING RECOMMENDATIONS OF THE COMMISSION OF INQUIRY PENDING THE INTRODUCTION OF A MORE UP-TO-DATE TELEPHONE SERVICES BILL TO REPLACE THE PRESENT TELEPHONE ORDINANCE.

MR. CHEONG-LEEN STRESSED THAT WHATEVER STEPS WERE BEING TAKEN TO STRENGTHEN THE MONITORING MACHINERY, SUCH STEPS SHOULD BE +TIMELY AND URGENTLY IMPLEMENTED+.

WITHOUT ADEQUATE AND QUALIFIED PERSONNEL WHO COULD MONITOR THE TECHNICAL AND OTHER EFFICIENCY OF THE TELEPHONE COMPANY'S OPERATIONS, HE WARNED, THE GOVERNMENT'S POWER TO REFUSE GRANTING REQUESTS FOR RENTAL INCREASES WOULD BE SEVERELY RESTRICTED BECAUSE OF VITAL INFORMATION COMING TO LIGHT ONLY WHEN IT WAS TOO LATE.

MR. CHEONG-LEEN ASKED THE GOVERNMENT TO CLARIFY WHETHER IT WAS ABLE, IF SUCH WERE THOUGHT NECESSARY, TO APPOINT FINANCIAL OR TECHNICAL CONSULTANTS WHO WERE NOT CÍVIL SERVANTS TO DO AN INDEPENDENT SURVEY OF THE TELEPHONE COMPANY SO THAT EFFECIENCY WOULD BE KEPT AT A HIGH LEVEL AND PROFITABILITY MAINTAINED.

HE REFERRED TO THE NEW FORMULA WHEREBY 20 PER CENT OF THE PROFITS IN EXCESS OF THE 16 PER CENT PERMITTED RETURN WOULD BE ALLOCATED TO SHAREHOLDERS' FUNDS AND SUGGESTED THE GOVERNMENT ACQUIRE A SUITABLE LEVEL OF INTEREST IN THE TELEPHONE COMPANY BY WAY OF ORDINARY SHARES.

+ANY INCOME DERIVED FROM SUCH SHARES SHOULD HELP TO OFFSET THE COST OF MONITORING BY GOVERNMENT OF THE TELEPHONE COMPANY'S OPERATIONS, EVEN THOUGH THE INCOME WOULD NOT BE SPECIFICALLY EARMARKED FOR SUCH PURPOSE, BUT WOULD BE PUT TO USE AS SEEN FIT BY GOVERNMENT, HE SAID.

BY SO DOING, MR. CHEONG-LEEN BELIEVED THAT GOVERNMENT WOULD BE SEEN MORE CLEARLY IN THE PUBLIC EYE TO HAVE THAT MUCH MORE REASON TO ENSURE THAT THE COMPANY OPERATES AT A HIGH LEVEL OF EFFICIENCY AND A REASONABLE DEGREE OF PROFITABILITY.

IN REPLY, THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, ASSURED THAT NO FURTHER INCREASE IN TELEPHONE RENTALS WOULD BE SANCTIONED UNTIL THE MONITORING MACHINERY HAD SHOWN THIS TO BE FULLY JUSTIFIED WITHIN THE PROVISION OF THE CONTROL SCHEME.

/HE REVEALED