XN000022-1995-02-15 — Page 26

(d)

(e)

(f)

4.

Other bus companies without any land would not be able to compete on a level-playing field with those from subsidies from land sales.

The proposal would be discriminatory against bus companies as other utility companies will not be subject to the same requirement.

And the whole concept of ploughing back land sale profits is a major departure from Hong Kong's free market principles.

The only way that this particular proposal could have been implemented would have been if the bus companies concerned had signified their agreement. Over the past three months the Administration has consulted the franchised bus operators. They have vehemently opposed such a move. In short therefore, given the legal, philosophical and policy considerations this proposal must be a non-starter. Mr President, I realise that this decision will disappoint some members of this council but I am sure that all members will agree that on such an important issue, any decision must be beyond reproach. To arbitrarily require bus companies to set aside part of the proceeds from land sales would be fundamentally wrong and difficult to justify either on legal or moral grounds. To do so forcibly would not only destroy the Administration's credibility but also have other far-reaching consequences. So to sum up, given the legal implications and the wider policy implications it is not in the overall interest of Hong Kong to pursue such a proposal. To do so will seriously undermine investors' confidence and question the Government's commitment to the rule of law.

Mr President, the Administration's fundamental concern is to ensure that public transport services are maintained. Insofar as operations of bus companies are concerned depot sites are essential and there is no question of the Administration agreeing to the release of any such site unless it is fully satisfied that the depot in question is no longer required for bus services. Certainly the Administration has no intention whatsoever of providing bus companies with alternative sites to facilitate the disposal of other depot sites which that particular bus companies may own. In the KMB case, a short-term tenancy site in Tseung Kwan O was granted because of the need to cater for an expanded fleet to serve the new town. In any case the cost of keeping these sites is much lower than having a company continuing to use depots which are no longer required and are obsolete. The Honourable Steven Poon criticised the Administration's proposal to take temporary possession of bus companies' assets. Under existing legislation, the Government already has a power to take temporary possession of bus companies' assets in the event of an emergency or revocation of a franchise. Such powers can also be exercised by the Government in the event that the franchise is not renewed. These provisions are necessary to enable the Government to protect the public interest in a situation where a bus company ceases to operate and severe disruption of bus services is likely to occur. We need a realistic period of time so that we can find a replacement operator and thus avoid unnecessary disruption.