Postal rates rise on cards

PUBLISHED : Tuesday, 04 May, 1993, 12:00am
UPDATED : Tuesday, 04 May, 1993, 12:00am

POSTAL rates will only be raised in line with inflation this year, despite estimates that increases of up to 160 per cent would be needed to recover long-term costs.

Low postage charges for inland and surface mail had led to significant losses in the past few years and in 1991-92 alone, losses amounted to $233 million.

These services had to be cross-subsidised by other profitable items like airmail and speedpost.

But in 1991, the Secretary for Economic Services informed the Legislative Council that the general policy on fees and charges for Government services was to recover from the users the full cost of providing services. The target rate of return on the investment of the Post Office is set at 16.7 per cent.

Acting Postmaster-General Mrs Doris Ho Ko Suet-yiu said since there was no increase last year, they would encounter difficulties this year if the rates were not revised and by 1994-95, they would be looking at a negative return.

Mrs Ho said they were studying ways to improve mail handling and productivity to minimise costs, including upgrading the software for the Mechanised Letter Sorting System to make it more efficient.