Town halls lose fares appeal
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• An appeal by a consortium of 27 local authorities against a fares increase granted to the North Western Road Car Co Ltd—argued on the grounds that the statutory financial duty of the National Bus Co was to go no further than to break even—has been dismissed; the appellants claimed that it was wrong for the company to seek to obtain a return on capital of 9.7 per cent.
In a written decision, Miss B. J. de Livera, an Assistant Secretary to the Minister of Transport, says that the Minister's view was that the financial duties of the NBC and its subsidiaries were principally contained in Section 41(2) and (3) of the Transport Act 1968 and Section 18(2) and (3) of the Transport Act 1962, as applied by Section 27(1) (a) of the Transport Act 1968.
• These Sections require that the combined revenues of the NBC and its subsidiaries taken together "are not less than sufficient to meet their combined charges properly chargeable to revenue account taking one year with another," and that its subsidiaries "charge to revenue account in every year all charges which are proper to be made to revenue account, including, in particular, proper provision for the depreciation or renewal of assets".
Also, the NBC shall charge to revenue in every year "all charges which are proper to be made to revenue, including, in particular, proper provision for the depreciation or renewal of assets and proper allocations to general reserve. . ." and that the NBC shall establish and maintain a general reserve".
• The Minister noted the statement by the respondent company that the net revenue sought represented the sum in the company's hands after it had discharged its operating liabilities and had provided for depreciation and replacement, but before taxation, and that the ultimate balance would be transferred to the NBC for the purpose of interest payments on the capital loaned by the Exchequer. In these circumstances the Minister could not agree that the return being sought was unreasonable or excessive.