XN000022-1996-01-10 — Page 15

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Indeed, the Hon Li Wing-tat has acknowledged that the sub-committee decision to recommend a rejection of the fare increase proposal was far from unanimous.

The fare increase now proposed will not, I repeat not, give the Company a profit. They will still be very much in the red. But the fare increase will provide HYF with immediate relief and improve its current cashflow. Some Hon Members have said that HYF have threatened to reduce or curtail its services if the fare increase application is rejected. Obviously if this happens they will then find it more difficult to maintain the present operations. I can only clarify that to reduce frequencies HYF must first obtain the Commissioner for Transport's agreement whilst curtailment of routes requires the Governor-in-Council's approval.

If HYF's future is so bleak, what can then be done to redress the situation? The answer lies in a "pier development package" through which the Company will be given development rights with a special fund set up for improving ferry services and stabilising fares in future years. I shall elaborate on this package in a moment.

I am very grateful to the Hon Miriam Lau and the Hon Ngai Shiu-kit for expressing so clearly their views of the Liberal Party and for their unequivocal support of HYF's application for a 13.96% fare increase. Their arguments and views are sound and deserve full support. I must also thank the Hon Chan Kam Lam, the Hon Ip Kwok-him, and the Hon Cheng Yiu-tong for explicitly stating the DAB's views on the fare increase proposal. It is re-assuring that they too are pragmatic and have accepted the fundamental justification to award HYF a fare adjustment although they advocate a slightly lower percentage.

Mr President, any reduction in the level of fare increase would have an impact on HYF's financial position while the adjustment by a 1.6% may seen insignificant in monify term, however, we estimate the total fare received forgone will be in excess of HK$6 million in 1996 for HYF. This is a very significant sum of money for a ferry company bearing in mind its current financial difficulties. A lower rate will only serve to aggravate HYF's position. The Administration can not therefore cannot support a lower level.

May I also, Mr President, take this opportunity to thank the Hon Margaret Ng and the Hon Choy Kan-pui so eloquently summarising the scenario which HYF faces. I also acknowledge with gratitude the support and understanding from other Members.

Mr President, it would appear that the Democrats simply refuse to listen to reason or face the facts. Their counter-proposals are totally unrealistic because they fail to recognise the gravity of HYF's plight and the urgency of granting this fare increase. Let me try to rebut their points.