XN000022-1991-11-13 — Page 4

WEDNESDAY, NOVEMBER 13,

1991

WOULD BE

UTILITIES.

THE AGREEMENTS

FURTHER,

ΤΟ

WAYS CANNOT ENSURE

I

PERSONALLY

THE

A NUMBER OF MEMBERS HAVE EXPRESSED THE VIEW THAT IT

THE MONITORING OF DESIRABLE TO SET UP AN ADVISORY BODY TO OVERSEE FRANCHISE AND SCHEME OF CONTROL AGREEMENTS WITH THE PUBLIC MR DEPUTY PRESIDENT, THE GOVERNMENT IS ALWAYS READY TO LOOK INTO

GOVERNMENT OF STRENGTHEN OUR MONITORING PROCEDURES. BUT THE ITS RESPONSIBILITIES UNDER ABDICATE ·

RELIABLE SERVICE TO CONSUMERS. CONTINUING FORESEE ON A PRACTICAL BASIS CONSIDERABLE DIFFICULTIES IN ESTABLISHING

OF A COST-EFFECTIVE BODY CAPABLE OF EFFECTIVELY MONITORING ALL VERY WIDE RANGE AND COMPLEXITIES OF SERVICES NOW COVERED BY FRANCHISES

WE AND SCHEME OF CONTROL AGREEMENTS.

WILL NEVERTHELESS CONSIDER MEMBERS' SUGGESTIONS CAREFULLY TO SEE WHETHER OUR CURRENT NETWORK ADVISORY BODIES NEEDS TO BE STRENGTHENED IN THIS ASPECT.

OF

OUR GENERAL

I MAY BE HELPFUL IF I NOW SAY A FEW WORDS ABOUT PHILOSOPHY WITH REGARD TO THE ROLE OF FRANCHISES AND SCHEME OF CONTROL AGREEMENTS IN THE PROVISION OF SERVICES TO THE PUBLIC.

THE

IN

PRIVATE PRINCIPLE THE GOVERNMENT BELIEVES THAT WHERE

WITH THE SECTOR CAN PROVIDE SERVICES IT SHOULD BE ALLOWED TO DO SO MINIMUM OF INTERFERENCE. AS THE FINANCIAL SECRETARY SAID LAST WEEK WE DELIVERY OF ALSO BELIEVE STRONGLY IN ENCOURAGING COMPETITION IN THE

WHERE SHOWS THAT

FORCES MARKET PUBLIC

ARE EXPERIENCE SERVICES. PERMITTED TO DETERMINE THE SCALE AND QUALITY OF SERVICES AND THE PRICE. BY AT WHICH THEY ARE MADE AVAILABLE, THE PUBLIC ALMOST ALWAYS BENEFIT BEING OFFERED A WIDER RANGE OF SERVICES AT LOWEST PRICES.

ALONE CANNOT BUT THERE ARE SITUATIONS IN WHICH MARKET FORCES

COST IS GUARANTEE THAT AN ADEQUATE LEVEL OF SERVICE AT A REASONABLE

GRANTING OF AVAILABLE TO EVERYONE WHO NEEDS IT. THIS IS WHERE THE

THE RIGHTS

AN

TOOL IN MONOPOLY

OR

IMPORTANT CAN BE FRANCHISES

THE OBJECTIVES BY IMPOSING UPON ACHIEVEMENT OF POLICY

FRANCHISEE OBLIGATIONS WHICH HE MUST FULFIL IN EXCHANGE FOR AN EXCLUSIVE RIGHT TO TYPICALLY SUCH OBLIGATIONS WILL THE SERVICE IN QUESTION.

PROVIDE

INCLUDE:

-

SERVICE EVEN

A REQUIREMENT TO MEET THE FULL DEMAND FOR THE THOSE SECTORS WHICH MAY NOT BE ECONOMICALLY VIABLE;

—

THE NEED TO MEET CERTAIN MINIMUM STANDARDS EFFICIENCY; AND

OF OPERATIONAL

THE REQUIREMENT TO OBTAIN GOVERNMENT APPROVAL FOR THE CHARGED TO CONSUMERS.

EACH SCHEME OF CONTROL AGREEMENT AND /OR FRANCHISE

OF CIRCUMSTANCES ΤΟ TAILORED

SUIT THE PARTICULAR CONCERNED AND ARE SUBJECT TO REGULAR REVIEW.

IS

PRICE

ARRANGEMENT THE COMPANY

CONTROL

IS TO A

COMPANY

TODAY'S MOTION REFERS TO BOTH "FRANCHISES" AND "PROFIT SCHEMES" BUT IT IS IMPORTANT THAT THE DISTINCTION BETWEEN THE TWO CLEARLY

FRANCHISE WHEN UNDERSTOOD.

THE GOVERNMENT AWARDS A PARTICULAR COMPANY IT GRANTS TO IT AN EXCLUSIVE RIGHT TO PARTICULAR SERVICE FOR A FIXED NUMBER OF YEARS SUBJECT TO THE FULFILLING THE SORT OF OBLIGATIONS I HAVE JUST DESCRIBED.

PROVIDE A

/IN THIS