1996 — Page 91

We remain on the cutting edge of bus transport with innovations such as the single- deck easy-access buses we introduced in 1996, which were equipped with features such as super-low floors, kneeling mechanisms and extendable ramps. These buses are the first in Hong Kong to facilitate access to bus transportation for the handicapped, senior citizens and other riders who may need assistance in mounting buses. KMB has asked several manufacturers to produce a double-deck easy-access version in order to extend this convenience to routes serviced by double-deck buses. We will be operating these easy-access buses on selected routes after consultation with disabled persons' representatives.

We have initiated an investigation into technology systems on the market that can be adapted to the rigours and requirements of transport management in an environment such as Hong Kong. While this is admittedly a tall order, we believe that it is a necessary tool to enable us to execute better scheduling and timetabling and to record and analyse real time passenger information to help us improve our services in both the short term and long term.

KMB's continued success and greatest opportunities hinge on our ability to spot in advance bus transport needs, trends and potential hurdles and provide expert solutions. The Operational Review included in this report offers a comprehensive summary of our enhanced capabilities and initiatives for the year under review. The nature of our business requires that we think long term and make considerable. investment to develop those services that our customers depend upon and mandate.

Financing

In 1996 fares for cross-harbour routes were increased by 10 per cent. For local routes, we proposed an average 7.5 per cent fare increase, but the Governor in Council eventually approved a 2.7 per cent rise instead. In a market where the cost of operations rises steeply, we strove hard to enhance revenue and contain costs without compromising on the quality of services and operations. Although this was a difficult task, we have managed to bring about satisfactory results. We will continue to work with Government to reach a reasonable mechanism to decide on

the rate of bus fare increases.

In 1996, the Company had a total of 286 buses licensed to cater for the introduction of new routes and service improvements. The purchases are financed by bank loans. and the working capital of the Company. The Company's wholly-owned subsidiary, Long Win Bus Company Limited (formerly known as Long Win Holdings Limited) will seek funding from banks to finance the purchase of about 140 new buses to ply the 12 new routes serving Chek Lap Kok airport and North Lantau. We believe KMB's

's strong cash flow will help us negotiate good terms for this financing.

"We continue to make

improvements to upgrade our entire organisation to win

more customers, and

to achieve standards

that are above and

beyond the satisfactory level

of operation."

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