Special Helping Measures for six major outlying island ferry routes for the next three-year licence period 2017-2020
General views
Mr CHAN Chun-ying said that at the meeting on 18 November 2016, he had suggested combining the two SHM items, namely “vessel maintenance cost” and “depreciation expense”, into one item. He now suggested an enhanced option that if the operators’ claim for reimbursement of “vessel related depreciation costs” had exceeded the cap of $16 million, ferry operators would be allowed to reimburse the extra cost from the budget provided for the SHM item on “vessel maintenance cost”. However, they should not be allowed to claim reimbursement of extra vessel maintenance cost from the SHM provision for the item on “vessel related depreciation costs”. He considered that this arrangement would be conducive to encouraging the purchase of new vessels by ferry operators.
C for T advised that the reimbursement cap of each SHM item was set for the illustration of expected allocation of fund. If there were evidence showing that the depreciation expense had exceeded the reimbursement cap and the maintenance cost had significantly reduced due to adoption of new vessels, the Administration would consider such proposal.
Licence period
Mr CHAN Chun-ying considered that the current licence period of ferry service for three years should be extended to encourage procurement of vessels by ferry operators. Mr CHAN Chun-ying opined that if the licence period was to be extended, the new licence should include a clause specifying the age of vessels to be used.
In response, C for T said that the Administration was positive in respect of extending the licence period for ferry service. However, there were various issues which should be further studied, e.g. the impact on the financial arrangements, provision of SHM, review mechanism and fare level. She said that TD would report the outcome of the above study to the Panel in the context of the next mid-term review. Subject to the views of the community, the Administration would proceed with legislative amendment. She added that the legislation had specified that the aggregate period of a ferry licence should not exceed 10 years whereas the licences for the six routes would reach an aggregate period of nine years in 2020. A tender exercise for operation of the six routes might be needed then. The Administration would consider members’ views when drawing up the terms and conditions of the new licences.