TNAG-1509-FCO40-2067-Hong-Kong-roads-and-traffic-legislation-1986 — Page 221

CONFIDENTIAL

For discussion

on 18 February 1986

3

XCC (86) 33 Copy No

31

MEMORANDUM FOR EXECUTIVE COUNCIL

Public Bus Services Ordinance

(Chapter 230)

REC..

THE KOWLOON MOTOR BUS COMPANY (1933) D

EXTENSION OF FRANCHISE

MKK 172/1

GISTRY

2 CFER 1986

DESK OPSICLE

PA

REGISTRY

Action Taken

Introduction

This memorandum seeks Members' advice on whether the franchise granted to the Kowloon Motor Bus Company (1933) Ltd should be restored to ten-year period by an extension of four years, to be achieved by means of two successive two-yearly extensions under the terms of section 6(3) of the Public Bus Services Ordinance (Chapter 230).

Background

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KMB was originally granted a ten-year franchise with effect from 1 September 1975. Having regard to the long lead time and investment required in the planning and building of bus depots, and to the necessary investment in new buses which normally have an operational life of about ten years, the duration of the franchise was set at ten years to enable the Company to make satisfactory forward planning and development of its bus services.

3

was

On 13 June 1978 and 29 August 1984, KMB's franchise extended to 31 August 1987 and 31 August 1989 respectively. On 5 March 1985, following consideration of memorandum XCC(85)20, the Council advised and the Governor ordered :-

(a) that the franchise of KMB should be extended for a further two years to 31 August 1991,

and

(b) that KMB's franchise should be reviewed by the Council in one year's time with a view to determining whether a further extension should be granted.

Application by KMB

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KMB has recently applied for an extension of franchise for four years, i.e. from 1 September 1991 to 31 August 1995, by way of two extensions of two years to more or less restore the franchise to its original ten-year duration. This is considered by KMB to be essential for the following reasons : -

CONFIDENTIAL