XN000022-1997-03-19 — Page 5

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On 11 March 1994, the Sewage Services Trading Fund was established in the Drainage Service Department to manage the operation of sewage services, to implement the High Priority Programme of capital works and to administer the billing and collection of sewage charges.

For the Sewage Services Trading Fund to be fully functional under the provisions of the Trading Funds Ordinance and in line with the trading fund concept, sewage facilities are appropriated to the Trading Fund so that the Director of Drainage Services, as General Manager of the Trading Fund, may properly manage the assets. On 26 July 1995, this Council passed a Resolution with the effect of appropriating all the sewage infrastructure existing as at 31 March 1995 to the Sewage Services Trading Fund.

Since the passing of the first Resolution, new sewage facilities funded by the Government have been completed and their management taken over by the Director of Drainage Services. It is necessary to appropriate them to the Sewage Services Trading Fund. Therefore, I move this Resolution to appropriate to the Sewage Services Trading Fund those sewage facilities completed and taken over by the Director of Drainage Services during the period from 1 April 1995 to 31 March 1996. This appropriation is necessary so that the accounts of the SSTF for this financial year can include assets completed or commissioned before 31 March 1996, so that the Trading Fund account can comply with the generally accepted accounting principles.

The appropriation of assets will not affect the level of sewage charges. This is because the Government decided in May 1996 that the cost of depreciation of assets would not be taken into account when setting the levels of sewage charges.

Additional sewage facilities are being funded by the Government through the Capital Works Reserve Fund. I will introduce further Resolutions annually for approval by this Council to appropriate all new sewage facilities as they are commissioned.

Sir, I beg to move.

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