ENG-1975 — Page 194

COMMUNICATIONS AND TRANSPORT

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order or under construction 142 double-deck buses. The bus priority scheme in- troduced in the Mid-Levels in 1974 continued to prove effective in improving the efficiency and reliability of bus services in that area. In July 1975, the northern section of Pottinger Street in Central was also made a bus-only lane to provide extra terminal facilities for expanded bus services running to and from Central and to ease condi- tions along Des Voeux Road Central. Traffic management schemes were introduced in Shau Kei Wan and Chai Wan to improve bus operating speeds.

Cross-harbour bus routes are operated jointly by KMB and CMB. The two companies carried an average 235,914 passengers daily in 1975, an increase of 28 per cent over 1974. Six additional routes were introduced, making a total of 12. The annual mileage operated increased by 20 per cent to 10.3 million miles.

With the introduction of the new Public Omnibus Services Ordinance, both CMB and KMB began operating under-new franchises on September 1. The fran- chises give the companies exclusive rights to operate bus services on specified routes as opposed to the previous franchises which were granted on a geographical basis. A feature of the new franchises is the fixing for the first time of a permitted rate of return for the companies. In the case of KMB, the return rate is 16 per cent based on the valuation of its fixed assets in July 1959-when the company's assets were last valued. For CMB, the return rate is 15 per cent based on a valuation carried out in 1962 when the company first issued its shares to the public. Another feature is the establishment of a profit control scheme under which each company is required to maintain a Development Fund, with any profits earned in excess of the permitted rate of return being credited to the fund. In a year when either company earns less than the permitted rate of return, it will be allowed to draw from the fund the amount needed to bring it up to the permitted return rate. The main purpose of the fund is to assist with capital expansion of bus operations by ensuring retention of profits in the company for this purpose, and also to serve as a profit equalisation fund. The new franchises will last for 10 years in the first instance, up to August 31, 1985. But the concept of a rolling franchise has been accepted, with the possibility of extensions every two years following comprehensive reviews of the companies' operations and their performance under the franchises. An additional provision of the Public Omnibus Services Ordinance is that the Governor may appoint up to two directors to each company's Board of Directors, and these directors would be empowered to represent the public interest rather than that of the shareholders.

On Lantau Island, bus services are operated by the New Lantau Bus Company (1973) along the 18 miles of road-much of which is single track with passing bays. Following the introduction in November 1974 of more frequent services and better connecting facilities with ferry services, the company was authorised to introduce a revised fare structure which features concessionary fares for island residents and increased fares at weekends. Passengers on Sundays and public holidays amounted to 37 per cent of the average daily passenger traffic of 3,760. During the year, 730,000 miles were operated on five routes using 42 single-deck buses.

The 14-seater public light buses (PLBs or minibuses) carried an estimated 1.4 million passengers a day in 1975, compared with the 2.3 million passengers carried daily by the franchised bus services. There were 4,307 minibuses registered at the