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SCMP Reporter

China Motor Bus was stripped of its 65-year-old franchise yesterday, igniting a mixture of job fears and jubilation.

 The move was announced after Executive Councillors endorsed a recommendation by transport officials to refuse the renewal of the company's 1933 franchise, which expires on August 31.

 Founded by rickshaw operator Ngan Shing-kwan in the 1920s, the company has been dogged by complaints about poor service, reduced routes and industrial action for a decade.

 Transport Secretary Nicholas Ng Wing-fui said CMB had refused to meet government demands for improvements in management, staff relations, services and vehicles.

 The average age of the company's buses is 13 years, compared with less than nine for rival Kowloon Motor Bus and about 5.5 for Citybus.

 Commuters would be better served by a completely new franchise package, Mr Ng said.

 The routes were put up for tender immediately, although CMB is still free to make a bid, Mr Ng said.

 Commuters who have long complained about CMB's service rejoiced at the news last night, but criticised the Government for failing to act years ago.

 CMB staff feared the end of the franchise would cost them their jobs, while unions warned that Hong Kong transport could be thrown into chaos.

 'The Transport Department will have to . . . protect the interests of the public during the transition period,' said provisional urban councillor Jennifer Chow Kit-bing.

 Ousted legislator and Democratic Party legislator Zachary Wong Wai-yin added: 'From past experience, it is clear services will drastically decline until they cease to operate.

 'Transport officials must strictly supervise their services.'  Mr Ng assured employees that the two most important conditions for the new tender were priority employment for CMB's 'frontline' staff and a smooth transition of services. Plans were in place to ensure 'maximum continuity' of employment for all 2,300 CMB staff.

 'We have tried our utmost to negotiate with CMB on renewing the franchise. Unfortunately we could not come to an agreement,' he said.

 CMB had fought government proposals to rationalise routes to boost efficiency, acquire new buses to replace the 35 per cent of its fleet over 18 years old, install new technology such as the Octopus smart-card system and improve staff management and welfare, he said.

 'We need to be assured the new franchisee can improve service quality. We just do not have that degree of confidence in CMB.'  The tender package comprises 88 of CMB's 125 routes, 29 of which will be cross-harbour.

 Citybus and KMB may absorb 13 of the remaining CMB routes. The remaining 24 will be scrapped. Rival operators said they were interested in the routes and would study tender details before making bids.

 CMB has been forced to give up about 40 routes since 1992 due to poor service.

 There has been speculation CMB was unconcerned about losing the franchise as this would enable it to develop the valuable land on which its major depots stand.

 The company has already embarked on three major developments in conjunction with Swire Properties.

 Island Place in North Point is 40 per cent-owned by CMB and consists of a shopping centre, office tower and residential buildings.

 CMB also has a 50 per cent share in a commercial/office tower in King's Road, North Point, due to be completed this summer, and owns half of a development at its former depot in Aberdeen.

 Its major depot and headquarters are in Chai Wan, and it operates a second depot in North Point.

 Transport Commissioner Fanny Law Fan Chiu-fun warned that the Government could seize control of CMB's 820 buses, its depots and parking areas under the Public Bus Service Ordinance.

 'As to how much of these assets we need to take, it will depend on the needs of the winning tenderer,' she said.

 'If it is an existing operator, they may not need so much.'  CMB said the loss of the franchise would not seriously affect profits because most of its business was outside the provision of bus services.

 It said net assets relating to its bus operations comprised only 7.4 per cent of its total, while bus profits were only 25.8 per cent of returns up to June 30 last year.

**Please note that late Ngan Shing-kwan was not a rickshaw puller. He 
was a founder of a rickshaw company.




CMB stripped of franchise