XN000022-1995-07-27 — Page 6

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As cargo handling operations are commercial in nature, there is no reason for public subsidy.

The operators should bear the running costs of the PCWAS

Taking into account the significant amount of capital resources that Government has provided in setting up, maintaining and operating the PCWAs, the Government therefore proposes that the PCWA fees should be determined on the basis of the Government utility approach.

This means the PCWA fees will seek to achieve full cost recovery plus a reasonable rate of return on the average assets value at historical cost.

Nevertheless, to minimise inconvenience to the operators and to avoid sharp increases in PCWAs fees, estimated at 50 per cent for 1995-96 if the target rate of 13 per cent were to be accomplished instantly, the Government has therefore proposed to achieve the target rate of return over three years ending 1997-98.

Against the above considerations, the Secretary for the Treasury has approved a fee increase of 20 per cent for PCWA fees for 1995-96.

The projected rate of return following this proposed increase is about 7.8 per cent only,

The fee increase at 20 per cent will represent an average increase of $21 or 1.3 per cent in operating cost per day in the case of a lorry. As for a lighter, the average daily increase will be about $60 or 1.6 per cent of the overall cost.

Regarding some trade associations and traders to stage a demonstration tomorrow (Friday) to express their dissatisfaction, the spokesman said the Government respected their rights to demonstrate and the Government would deploy adequate resources to ensure the smooth and safe operation of the port.

The spokesman appealed to trade associations and traders to conduct their demonstration in an orderly manner and to due consideration to other port users.

End/Thursday, July 27, 1995