XN000022-1994-01-12 — Page 23

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WEDNESDAY, JANUARY 12, 1994

FOR EXAMPLE, THE LONDON UNDERGROUND SYSTEM HAS SUFFERED FROM THIS SYNDROME AND HAS NOW JUST SET ITSELF THE GOAL OF BECOMING FINANCIALLY SELF-SUFFICIENT AND UPGRADING ITS SERVICES TO THOSE OF A 'DECENTLY MODERN METRO'; A GOAL THE LOCAL TWO RAILWAY CORPORATIONS HAD ACHIEVED FOR SOME TIME, HE SAID.

IN DETERMINING FARE, BOTH CORPORATIONS UNDERTOOK EXTENSIVE PUBLIC CONSULTATION AND MARKET RESEARCH TO ENSURE THAT THEIR PROPOSED FARES WOULD NOT ONLY REMAIN COMPETITIVE VIS-A-VIS OTHER PUBLIC TRANSPORT MODES BUT WERE ALSO AFFORDABLE AND ACCEPTABLE TO THE PUBLIC, MR BARMA SAID.

THE PUBLIC CONSULTATION EXERCISE STARTS WITH REGULAR MEETINGS WITH PASSENGER LIAISON GROUPS WHERE SOUNDINGS ON THE ACCEPTABILITY OF PROPOSED FARE INCREASES ARE TAKEN.

THESE SOUNDINGS TOGETHER WITH RESULTS FROM INDEPENDENT PASSENGER SURVEYS ON POSSIBLE FARE REVISION LEVELS UNDERTAKEN BY THE CORPORATIONS PROVIDE THE BASIS UPON WHICH BROAD PARAMETERS OF THE PROPOSED FARE INCREASES ARE FORMULATED.

BEFORE IMPLEMENTATION, AN INFORMATION PAPER, WITH FULL DETAILS, IS PUT TO THE EXCO IN WHICH, VIEWS OF LEGCO, AND OTHER PARTIES ARE FULLY REFLECTED, HE SAID.

JUST

"THE REFERRAL TO THE EXECUTIVE COUNCIL IS NOT

A MERE FORMALITY. THE EXECUTIVE COUNCIL DOES SCRUTINISE FARE APPLICATIONS AND COMMENTS ARE TAKEN SERIOUSLY BY THE CORPORATIONS.

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THIS PROCESS OF CONSULTATION HAS BEEN FINE-TUNED OVER THE YEARS TO ENSURE THAT THE RIGHT BALANCE IS MAINTAINED BETWEEN THE INTERESTS OF THE TRAVELLING PUBLIC ON THE ONE HAND AND THE REQUIREMENTS OF THE TWO CORPORATIONS TO OPERATE ON PRUDENT PRINCIPLES ON THE OTHER.

COMMERCIAL

"IT HAS WORKED WELL. MR BARMA SAID.

**

AND

HE SAID A FAILURE TO PROVIDE FARE AUTONOMY WOULD HAVE A SERIOUS DETRIMENTAL IMPACT ON FUTURE RAILWAY DEVELOPMENT.

THE RESULT WOULD LIKELY BE A DOWNGRADING OF THE CREDIT RATINGS OF THE CORPORATIONS CONCERNED, A SMALLER NUMBER OF INSTITUTIONS WILLING TO LEND AND HIGHER BORROWING COSTS.

TAKE THE MTRC FOR EXAMPLE, A ONE PER CENT INCREASE IN BORROWING COSTS WOULD MEAN THAT THE PASSENGERS, OR THE TAXPAYERS WOULD NEED TO PAY SOME $3 BILLION MORE OVER A 10-YEAR PERIOD,' MR BARMA SAID.

EL

ON A SUGGESTION THAT THE GOVERNMENT SHOULD WAIVE THE DIVIDEND PAYMENTS FROM THE CORPORATIONS AS A MEASURE ΤΟ REDUCE THE FARE INCREASE REQUIRED, MR BARMA SAID THE GOVERNMENT HAD BEEN RECEIVING DIVIDENDS FROM THE KCRC ONLY SINCE 1990/91, AND HAD NOT YET ASKED FOR ANY DIVIDEND PAYMENT FROM MTRC.

BESIDES, IT WOULD NOT BE IN THE PUBLIC INTEREST то FOREGO DIVIDEND REVENUE WHICH WILL BE AVAILABLE TO FUND USEFUL PUBLIC SERVICES SUCH AS EDUCATION AND SOCIAL WELFARE, OR TO SUBSIDISE RAIL PASSENGERS WHO CAN AFFORD TO PAY.

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