XN000022-1996-06-27 — Page 62

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Govt's stance on KCRC after-tax profits explained

Following is a question by the Hon Eric Li Ka-cheung and a reply by the acting Secretary for Transport, Mr Paul Leung, in the Legislative Council today (Wednesday):

Question:

The Kowloon-Canton Railway Corporation (the Corporation) recorded after-tax profits of around $1.1 billion and $0.9 billion in 1994 and 1995 respectively. However, the Government did not request the Corporation to pay to the Government a sum from the Corporation's net profit in these two years under section 9(1) of the Kowloon-Canton Railway Corporation Ordinance. In this connection, will the Government inform this Council :

Reply:

(a)

(b)

(c)

Mr President,

(a)

of the basis and considerations for the Government not asking the Corporation to make the above payment to the Government; and whether the Government's decision was related to the expenses which the Corporation will spend on consultancy studies concerning the proposed Western Corridor Railway project;

whether it knows if the Corporation will seek to secure loans to pay for the expenses in connection with the above consultancy studies; and

whether the Government has discussed with the Managing Board of the Corporation the question of the Corporation making payment to the Government for this year and thereafter; if so, what the outcome is?

In 1994, Governemnt decided not to direct KCRC to make payments primarily in view of KCRC's plans to spend in 1995 $3 billion on capital improvements including $120 million on the preliminary studies relating to the Western Corridor Railway proposal.

In 1995, Government again decided not to direct KCRC to make payments on broadly similar grounds, namely KCRC's plans to spend in 1996 $2.5 billion for upgrading facilities and services, $1.5 billion on further studies relating to the Western Corridor Railway proposal and