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OFFICIAL RECORD of PROCEEDINGS Thursday, 23 June

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OFFICIAL RECORD of PROCEEDINGS Thursday, 23 June LEGISLATIVE COUNCIL ─ 23 June 2016 12395 OFFICIAL RECORD OF PROCEEDINGS Thursday, 23 June 2016 The Council continued to meet at Nine o'clock MEMBERS PRESENT: THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.M., G.B.S., J.P. THE HONOURABLE ALBERT HO CHUN-YAN THE HONOURABLE LEE CHEUK-YAN THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P. THE HONOURABLE LEUNG YIU-CHUNG THE HONOURABLE EMILY LAU WAI-HING, J.P. THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P. THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P. THE HONOURABLE TOMMY CHEUNG YU-YAN, G.B.S., J.P. THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P. THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P. THE HONOURABLE WONG KWOK-HING, B.B.S., M.H. PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P., Ph.D., R.N. 12396 LEGISLATIVE COUNCIL ─ 23 June 2016 THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P. THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P. THE HONOURABLE WONG TING-KWONG, S.B.S., J.P. THE HONOURABLE CYD HO SAU-LAN, J.P. THE HONOURABLE STARRY LEE WAI-KING, J.P. THE HONOURABLE CHAN HAK-KAN, J.P. THE HONOURABLE CHAN KIN-POR, B.B.S., J.P. DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P. DR THE HONOURABLE LEUNG KA-LAU THE HONOURABLE WONG KWOK-KIN, S.B.S. THE HONOURABLE IP KWOK-HIM, G.B.S., J.P. THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P. THE HONOURABLE PAUL TSE WAI-CHUN, J.P. THE HONOURABLE LEUNG KWOK-HUNG THE HONOURABLE ALBERT CHAN WAI-YIP THE HONOURABLE WONG YUK-MAN THE HONOURABLE CLAUDIA MO THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P. THE HONOURABLE NG LEUNG-SING, S.B.S., J.P. THE HONOURABLE FRANKIE YICK CHI-MING, J.P. LEGISLATIVE COUNCIL ─ 23 June 2016 12397 THE HONOURABLE WU CHI-WAI, M.H. THE HONOURABLE YIU SI-WING, B.B.S. THE HONOURABLE GARY FAN KWOK-WAI THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P. THE HONOURABLE CHARLES PETER MOK, J.P. THE HONOURABLE CHAN CHI-CHUEN THE HONOURABLE CHAN HAN-PAN, J.P. DR THE HONOURABLE KENNETH CHAN KA-LOK THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P. THE HONOURABLE KENNETH LEUNG DR THE HONOURABLE KWOK KA-KI THE HONOURABLE KWOK WAI-KEUNG THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P. THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P. DR THE HONOURABLE HELENA WONG PIK-WAN THE HONOURABLE IP KIN-YUEN DR THE HONOURABLE ELIZABETH QUAT, J.P. THE HONOURABLE MARTIN LIAO CHEUNG-KONG, S.B.S., J.P. THE HONOURABLE POON SIU-PING, B.B.S., M.H. 12398 LEGISLATIVE COUNCIL ─ 23 June 2016 THE HONOURABLE TANG KA-PIU, J.P. DR THE HONOURABLE CHIANG LAI-WAN, J.P. IR DR THE HONOURABLE LO WAI-KWOK, S.B.S., M.H., J.P. THE HONOURABLE CHUNG KWOK-PAN THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P. THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S. THE HONOURABLE ALVIN YEUNG NGOK-KIU MEMBERS ABSENT: THE HONOURABLE JAMES TO KUN-SUN DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P. DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P. THE HONOURABLE CHEUNG KWOK-CHE THE HONOURABLE ALAN LEONG KAH-KIT, S.C. THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P. THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S. THE HONOURABLE LEUNG CHE-CHEUNG, B.B.S., M.H., J.P. THE HONOURABLE ALICE MAK MEI-KUEN, B.B.S., J.P. THE HONOURABLE DENNIS KWOK DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG LEGISLATIVE COUNCIL ─ 23 June 2016 12399 PUBLIC OFFICERS ATTENDING: PROF THE HONOURABLE ANTHONY CHEUNG BING-LEUNG, G.B.S., J.P. SECRETARY FOR TRANSPORT AND HOUSING PROF THE HONOURABLE K C CHAN, G.B.S., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY MR RONALD CHAN NGOK-PANG, J.P. SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS THE HONOURABLE LAI TUNG-KWOK, S.B.S., I.D.S.M., J.P. SECRETARY FOR SECURITY MS CHRISTINE LOH KUNG-WAI, J.P. SECRETARY FOR THE ENVIRONMENT THE HONOURABLE LAU KONG-WAH, J.P. SECRETARY FOR HOME AFFAIRS MR JOHN LEE KA-CHIU, P.D.S.M., J.P. UNDER SECRETARY FOR SECURITY CLERKS IN ATTENDANCE: MS ANITA SIT, ASSISTANT SECRETARY GENERAL MS DORA WAI, ASSISTANT SECRETARY GENERAL MR MATTHEW LOO, ASSISTANT SECRETARY GENERAL 12400 LEGISLATIVE COUNCIL ─ 23 June 2016 GOVERNMENT MOTIONS PRESIDENT (in Cantonese): Good morning, Members. Government motions. The Secretary for Transport and Housing will move two proposed resolutions under the Public Bus Services Ordinance. PRESIDENT (in Cantonese): First motion: the new franchise granted to Citybus Limited. Members who wish to speak on the motion will please press the "Request to speak" button. I now call upon the Secretary for Transport and Housing to speak and move the motion. PROPOSED RESOLUTION UNDER THE PUBLIC BUS SERVICES ORDINANCE SECRETARY FOR TRANSPORT AND HOUSING (in Cantonese): President, I move that the first motion under my name and proposed pursuant to the Public Bus Services Ordinance (the Ordinance), as printed on the Agenda, be passed. The Chief Executive in Council granted new ten-year franchises to Citybus Limited (Franchise for Hong Kong Island and Cross-Harbour Bus Network) (Citybus) and New Lantao Bus Company (1973) Limited (NLB) on 22 September 2015. The new franchise of Citybus will commence on 1 June 2016 while that of NLB on 1 March 2017. All new bus franchises granted since 1992 are not subject to the Profit Control Scheme (PCS) and neither of the two aforementioned new franchises consists of any PCS arrangements. In keeping with the established practice, we propose that the motions on the Agenda be passed to exclude the application of the PCS to the two new franchises. LEGISLATIVE COUNCIL ─ 23 June 2016 12401 In this regard, I would like to thank the Subcommittee formed by the Legislative Council for scrutinizing the resolutions. The Subcommittee had completed its work and had no objection to the resolutions. President, under section 5(3)(b) of the Ordinance, a franchise shall be subject to the PCS under the Ordinance unless the Legislative Council by resolution excludes the application of the related provisions. Under the PCS, bus fares of a franchised bus company are to be set at a level which allows cost recovery plus a predetermined level of profit. This in effect links the level of bus fares directly with the profit level of the franchise. Bus fares would thus have to be adjusted according to the predetermined level of profit. In the past, the then Legislative Council and the community had strongly criticized that the PCS would guarantee the franchised bus companies a profit level irrespective of their performance, thereby reducing the operators' incentive to enhance cost-effectiveness and minimize expenditure. This in effect encouraged the franchised bus companies to over-expand and inflate their asset values. In view of this, the then Executive Council decided in 1992 that the PCS would not be applicable to new bus franchises granted thereafter. Since then, the Government would, after granting of each new franchise, move a resolution in the then Legislative Council and the current Legislative Council upon our return to China to exclude the application of the PCS to the franchises. A total of 20 such resolutions had been passed in respect of franchises granted since then. Meanwhile, the Government would take into account a basket of factors (which include public acceptability and affordability) in assessing franchised bus fare adjustment applications. At present, the PCS is not applicable to any bus franchises. When negotiating with the Citybus and the NLB on the new franchises, the Government has made it clear that there would not be any arrangements on permitted return and neither of the new franchises contains any such arrangements. Moreover in the Legislative Council Brief issued on the day the new franchises were granted, the Government had indicated clearly that it would seek the Legislative Council's resolution to disapply the PCS to the two new franchises. 12402 LEGISLATIVE COUNCIL ─ 23 June 2016 In this regard, I move that the first motion to disapply sections 27, 28, 29 and 31 of the Ordinance to the new franchise of the Citybus be passed so as to exclude the application of the PCS to that franchise. Thank you, President. The Secretary for Transport and Housing moved the following motion: "RESOLVED that the franchise granted on 22 September 2015 under section 5 of the Public Bus Services Ordinance (Cap. 230) to Citybus Limited (城巴有限公司) and published in the Gazette as G.N. 7692 of 2015 is not subject to sections 27, 28, 29 and 31 of that Ordinance for the entire period of the franchise." PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by the Secretary for Transport and Housing be passed. MR CHAN HAN-PAN (in Cantonese): President, I will now report to this Council in my capacity as Chairman of the Subcommittee on Two Proposed Resolutions under Section 5(3)(b) of the Public Bus Services Ordinance (Cap. 230) (the Subcommittee). The Subcommittee has held one meeting to examine the two proposed resolutions put forth by the Administration under section 5(3)(b) of the Public Bus Services Ordinance (the Ordinance).
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