XN000022-1996-06-11 — Page 5

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He said: "We need to generate a reasonable return, subject to any postage rates increase being broadly in line with inflation, to be sure that we can invest in our future.

"Our investment programme for the next five years is some $824 million, including for new and reprovisioned premises, the New Air Mail Centre, plant and machinery, new services and new vehicles.

"This investment programme will help us improve our productivity, as well as our quality of service. On productivity, investment in culler facer cancellers, track and trace, and the new air mail centre will save us some 83 posts by 1998."

After the revision, the basic rates for local letters and printed papers will be increased by 10 cents, i.e. from $1.20 to $1.30 for letters, and from $1.10 to $1.20 for standard printed papers. For surface letters and printed papers to China, Macau and Taiwan, the basic rates will be increased from $1.50 to $1.60 and from $1.30 to $1.40 respectively.

For surface mail to other countries, zones similar to air mail to reflect the difference in conveyance costs for different countries will be introduced. For Zone 1 (mainly Asian countries except Japan), the postage rates for letters up to 250g will remain unchanged. For Zone 2 (rest of the world), the basic rate will be increased from $2.30 to $2.60. For printed papers, the basic rate for Zone 1 will be reduced from $2.10 to $1.90, against an increase of 20 cents to $2.30 for Zone 2.

The basic weight step for air letters will be revised from 10g to 20g in order to address the problem of underpaid items. It is estimated that some 30 per cent of the letters posted at the 10g weight step are underpaid, resulting in a significant loss of revenue. For Zone 1, there will be an increase of 40 cents for letters below 10g, against a decrease of 70 cents at the 20g weight step. The combined new rate will be $2.50. For printed papers the increase is 40 cents and the decrease is 30 cents, the new combined rate being $2.00. Similar changes apply for Zone 2. For customers posting letters of less than 10g, the cheaper alternative of using aerogrammes, for which the increase will be 20 cents to $2.30, will still be available.

The current composition of our traffic to Japan will attract the new internationally agreed higher terminal dues rates. Until now Japan has been grouped with lower cost destinations under Zone 1. Since the volume of traffic to Japan is high and increasing, it is necessary to reclassify Japan from Zone 1 to Zone 2 in order to partially recover increasing costs.

There are no proposals on this occasion to revise the miscellaneous fees and charges which include registration fees, post office box rental, redirection fee, and so

on.

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