15 July 1997
The Kowloon Motor Bus company (1933) Limited ("KMB") is pleased to have been granted a new franchise by the Government of the Hong Kong Special Adminstrative Region to operate a public bus service for the period from 1 September 1997 to 31 July 2007.
A Company spokesman noted that the network of routes currently operated by KMB remains intact under the new franchise. "While all these routes will be specified as non-exclusive routes, KMB has reason to believe that, so long as it continues to provide a proper and efficient bus service on these routes, its operating rights would not be eroded", the spokesman said.
Unlike KMB's existing franchise, the new franchise will not be subject to any Profit control Scheme providing for a permitted return at a specified rate. However, KMB has been assured that, in exercising its rights under the Public Bus Services Ordinance and the new franchise, particularly the right to determine KMB's fares, Government will continue to adopt the policy of allowing KMB to make a reasonable return on its investments.
The spokesman said that KMB intends to transfer the ownership of its permanent depot site at NKML3, Lai Chi Kok to a wholly-owned subsidiary comany shortley after the commencement of the new franchise. Following the transfer, the subsidiary company will lease the site back to KMB at a nominal rent for the latter's operations, until a replacement depot on the West Kowloon Reclamation is ready for use.
"The replacement depot will be constructed on a site to be provided by Government through a Tenancy Agreement as soon as possible. The costs arising from the transfer, construction and use of the replacement depot will be borne by KMB, using shareholders' funds", the spokesman said.
The spokesman added that, once the replacement depot is ready for use, KMB will seek the release of the Lai Chi Kok site, which was acquired by KMB in 1955 on the open market using shareholders' funds, from its franchised bus operations. The site, which has been rezoned as a Comprehensive Development Area, would then be available for development or disposal.
"The proposed arrangements regarding the transfer of owndership and eventual replacement of the Lai Chi Kok Depot have been noted and agreed by Government", the spokesman said.
Finally, the spokesman said that KMB had no concrete plans at this stage regarding the eventual development or disposal of the Lai Chi Kok Depot.
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