XN000022-1977-12-21 — Page 9

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EDNESDAY, DECEMBER 21, 1977

LEGCO WAIVES STAR FERRY COMPANY'S ROYALTY

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THE LEGISLATIVE COUNCIL TODAY PASSED A MOTION WAIVING THE STAR FERRY COMPANY'S ROYALTY PAYMENTS FOR THE YEARS 1977 TO 1979.

AT THE SAME TIME, THE SUMS PAYABLE BY THE COMPANY IN RESPECT CF ITS REVENUE FROM ADVERTISING ON PIERS FOR THE YEARS 1974 TC 1979 HAS ALSO BEEN WAIVED.

MOVING THE MOTION, THE SECRETARY FOR THE ENVIRONMENT, THE HON. DEREK JONES SAID THE COMPANY HAD APPLIED FOR EITHER A WAIVER OF ROYALTY FOR 1977 OR FOR AN INCREASE IN FARES IN ORDER TO MAINTA IN A REASONABLE LEVEL OF PROF IT.

AFTER PAYMENT OF ROYALTY AND TAXES, HE SAID, THE COMPANY EXPECTED TO MAKE A PROFIT OF ONLY ABOUT $1.5 MILLION IN 1977, COMPARED WITH ABOUT $2.1 MILLION IN 1976, MAINLY BECAUSE OF FURTHER INCREASES IN OPERATING COSTS AND A CONTINUING DECLINE IN PASSENGER NUMBERS ON ITS MAIN ROUTE BETWEEN EDINBURGH PLACE AND KOWLOON POINT.

+AFTER CAREFULLY EXAMINING THE COMPANY'S ACCOUNTS AND ITS PROJECTIONS OF COSTS AND REVENUE. THE GOVERNMENT HAS CONCLUDED THAT SOME AMELIORATION IS NECESSARY AND THAT IT WOULD BE BETTER TO FOREGO ROYALTY THAN TO AGREE TO AN INCREASE IN FARES,+ MR. JONES SAID.

THE EFFECT OF WAIVING THE ROYALTY, HE ADDED, SHOULD BE TO ALLOW THE COMPANY TO MAKE ROUGHLY THE SAME LEVEL OF PROFITS IN 1977 AS IN 1976.

+AS FOR THE FUTURE, PROFITS CAN BE EXPECTED TO DECLINE IN 1978 AND IT IS POSSIBLE THAT A LOSS WILL BE INCURRED IN 1979,+ HE SAID.

HE POINTED OUT THAT THE WAIVING OF THE COMPANY'S ROYALTY PAYMENTS UNTIL THE END OF 1979 BROUGHT THE STAR FERRY COMPANY INTO LINE WITH THE HONG KONG YAUMATI FERRY COMPANY AND OTHER PUBLIC TRANSPORT COMPANIES, NONE OF WHICH WERE NOW REQUIRED TO PAY ROYALTY.

MR. JONES SAID IT WAS ALSO NECESSARY TO WAIVE THE CHARGE PAYABLE BY THE COMPANY FOR REVENUE FROM ADVERTISING ON PIERS BECAUSE THE BENEFITS OF WAIVING THE ROYALTIES WOULD BE COMPLETELY NEGATED IF THIS CHARGE WERE TO BE IMPOSED.

UNDER THE ORDINANCE, THE SAIVING OF THE ROYALTY WOULD LEGALLY RENDER THE COMPANY LIABLE TO PAY THE GOVERNMENT 80 PER CENT OF ITS REVENUE FROM ADVERTISING ON PIERS.

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