TNAG-0955-FCO40-1174-Legislation-for-traffic-on-roads-in-Hong-Kong-1980 — Page 282

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Section 25 to be amended to enable property taken into possession on revocation of a franchise to be retained up to 2 years (instead of the present maximum limit of one year).

New provision to be inserted in the Ordinance to enable the compulsory purchase by the Government or its nominee of any property taken into possession under section 25, or of any property of a grantee upon revocation of its franchise. The purchase price to be agreed between the parties or by arbitration in default of agreement,

Provision to be inserted to enable the Development Fund and any assets of the Fund or the money equivalent thereof to be taken over on revocation of a franchise so that its use can be safeguarded for the benefit of the travelling public.

Profit control scheme. Section 25 to be amended so that the definition of "operating receipts" includes

(a) realized currency exchange profits

arising after 1.7.80 - C.H.B.7 / 15.2:80 K.H. B. 7 from

transactions in connexion with the acquisition of fixed assets; and

(b) proceeds of any sale or disposal of any tyres, inner tubes, drums, fuel, lubricating oils or greases, batteries, spare parts and materials or scrap metal,

but subject to (b) above, not including

(i) interest or dividends on

deposits or investments; or

· (ii)

the profit, being the sale price less the original cost depreciated in accordance with section 30, on the sale or redemption of investments or fixed assets.

Section 26 to be amended to make it clear that tax charges relating to income from business activities outside a franchise are not deductions for the purpose of arriving at the permitted return.

Provision to be inserted to ensure that any penalty imposed under section 22 lowers the permitted return so that the company is popalised and not the travelling public.