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Contrary to Hong Kong's long-standing and successful business and investment philosophy, the licensing policy as it is developing represents a promotion of government at the expense of the private sector. It will lead we believe to higher charges to the airlines, and hence customers, for a lesser service. This is the converse of the Authority's stated objective.
The key licence terms and conditions which are creating this situation are:-
(a) A 10% levy on all sales.
There is none at Kai Tak.
(b) Shareholders do not own their assets. Title to all
aspects of a business, including even computer software, is held by the Authority.
(c) There is no guarantee of tenure. The proposed 10-year licence period is far too short minding the investment involved in almost all activities. The Authority has the right to terminate licences at any time and will only compensate shareholders at book value of assets with no consideration of goodwill or staff redundancy costs. The key to quality is continuous investment in training to increase the fund of skills in the companies concerned. A short licence period kills the incentive to train. The situation is made worse if the investment involved is not recognised in the value of the business.
(d) Guarantees are required from the major/parent
shareholders of those seeking licences. This is considered unreasonable.
(e) There is a prohibition on the licensees from being
involved in similar and connected activities in Hong Kong, Macau and Guangdong Province. This flies in the face of basic economics let alone ignores the growing cross-border commercial links and exchange of skills and resources.
These are some of the major concerns we have; there are others. The airport is a public utility and of course needs performance criteria. Nevertheless, the Authority,
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