Legislative Council Panel on Transport

Transitional Arrangements for the
Takeover of the Bus Operations of
China Motor Bus Company Limited

Purpose

This paper reports on the transitional arrangements for the transfer of 88 bus routes from the China Motor Bus Company Limited (CMB) to New World First Bus Services Limited (New World) on 1 September 1998.

Background

2. CMB's existing franchise will expire on 31 August 1998. Following an open tender exercise to find the replacement operator, on 31 March 1998, the Executive Council granted New World a franchise to operate a package of 88 bus routes on Hong Kong Island from 1 September 1998 to 31 July 2003.

Progress Made on the Transitional Arrangements

3. There are essentially four areas of transitional work, namely, staff recruitment and training, acquisition of bus-related assets, traffic operations and public relations. A summary of the progress made to date is set out in the following paragraphs.

(a) Staff recruitment and training

4. New World has pledged to offer employment to all existing CMB staff and has reached agreement with the CMB staff unions on employment terms and conditions. The staff registration exercise in May attracted a turnout of more than 2 400 CMB staff, including office staff. As CMB has issued notices of termination of employment to staff directly involved in its bus operations, New World plans to offer formal appointment to these staff in early August 1998. Majority of the CMB staff will be deployed to New World's bus operations, while a small number of surplus staff will be employed by other companies within the New World Group, where job vacancies of comparable wage levels are available. 5. On staff training, New World has commissioned a series of training courses for bus captains since mid-July to refresh their driving skills and improve their service attitude. Training on new bus models will also be organised from August 1998 onwards.

(b) Acquisition of bus-related assets

(i) Buses

6. To ensure an adequate number of buses for operation on 1 September, New World has reached a commercial agreement with CMB on the procurement of 710 CMB buses. In addition, 50 new buses will arrive by late August and will be deployed to upgrade services on some routes to meet demand and passenger expectations. Hence, there will be at least 760 buses to meet service requirement on 1 September 1998.

7. New World will acquire another 450 new buses over a period of about 2 years, 190 of which will be delivered between September and December this year. The older CMB buses will be phased out gradually as new buses are delivered in 1999/2000.

(ii) Depots, maintenance and servicing facilities

8. CMB has two bus depots and two parking sites on Government land. The use of these sites will be transferred to New World on 1 September 1998. The tenancy agreement for these sites is being processed by Lands Department. In addition, a small site in the Eastern District will be leased to New World for bus servicing and cleaning purposes. The site is now under construction and will be completed by November this year. New World has reached an initial agreement with CMB over the procurement of all existing CMB recovery vehicles, plant and machinery in depots, and other ancillary maintenance facilities. New World has also proposed to lease from CMB the use of its Chai Wan depot for a period of 3 years. Negotiations are underway over the rental and other terms.

9. Work has also started on the planning of a permanent depot to replace CMB's Chai Wan depot after three years. New World has submitted a development plan to the Planning Department for approval and expects to commence construction in mid-1999 for completion in 2001.

10. For servicing support, New World has made arrangements with respective suppliers and contractors to provide spare parts and consumables, tyres, fuel and oil, coin counting and bus cleaning services from 1 September onwards.

(c) Traffic operations

11. For a smooth transition on 1 September, existing bus routeings and stopping arrangements will be maintained during the initial period. Changes would only be phased in gradually to meet the changing needs of commuters.

12. Other ancillary facilities, such as bus stop flags and information panels, will be ready for display at bus stops by August 1998. Meanwhile, New World has planned to erect about 100 new bus shelters per annum in the next two years.

13. To ensure efficient and effective control of bus operation, New World will set up an Operation Control Centre in mid-August and arrange briefings for operational staff before service commissioning.

(d) Public relations

14. Senior management of New World has visited all Provisional District Boards on Hong Kong Island. To prepare for operation on 1 September, New World has set up a service hotline and a mobile customer service centre which shall visit various bus termini on Hong Kong Island. A bus guide will also be published and distributed in August. New World is also planning for a customer liaison group and a permanent customer service centre to be established at Admiralty East Bus Terminus to enhance interface with passengers.

Commencement of Operation on 1 September and Contingency

15. New World is actively working on an operational plan for service commencement on 1 September. It covers essential tasks such as staff and fleet mobilisation, commissioning of depot and maintenance activities and other requisite operational arrangements. Transport Department will assist New World in implementing the plan, in consultation with the Police and the Education Department, to ensure a smooth transition of bus services on 1 September which is the first day of a new school year.

16. Transport Department will also closely monitor the situation. The Department has drawn up a series of contingency measures, involving the cooperation of other public transport operators, to facilitate the takeover of the bus routes by New World. When necessary, Transport Department will implement and coordinate these measures as appropriate and will arrange wide publicity for the related arrangements through the media with a view to minimizing the impact of the changeover on the public.

Transport Bureau
27 July 1998