Hong Kong Ordinances

MASS TRANSIT RAILWAY ORDINANCE - SECT 16

Default under franchise

(Past version on 30/06/2000).

(1) For the purposes of sections 17 and 18, the Corporation is in default
under the franchise if- (Amended 11 of 2007 s. 12)

   (a)  any of the following occurs- (Amended 11 of 2007 s. 12)

        (i)    there has been a substantial failure by the Corporation to
               discharge an obligation under the operating agreement;

        (ii)   the Corporation has failed or there is a likelihood of its
               failing substantially to operate the railway in accordance with
               this Ordinance; or

        (iii)  there has been a substantial failure by the Corporation to
               discharge an obligation under the Service Concession Agreement
               which does not amount to a major breach of the
               Service Concession Agreement, (Added 11 of 2007 s. 12) and the
               failure (or likely failure) results in or is likely to result
               in- (A) a substantial breakdown of the service; (B) the safety
               of persons travelling on the railway or being on the
               railway premises being endangered in a manner likely to result
               in serious injury to those persons; or (C) serious injury to or
               the death of persons travelling on the railway or being on the
               railway premises; or

   (b)  a voluntary winding up of the Corporation is commenced or a winding up
        order in respect of the Corporation is made; or

   (c)  there has been a major breach by the Corporation of the Service 
        Concession Agreement, (Added 11 of 2007 s. 12)
and the expression "default" shall be construed accordingly. (Amended 11 of
2007 s. 12)

(2) For the purposes of subsection (1), there has been a major breach by the
Corporation of the Service Concession Agreement if the Corporation-

   (a)  makes any default in payment under the Service Concession  Agreement;

   (b)  contravenes any restriction imposed under the Service 
        Concession Agreement on the disposal of the Concession Property; or

   (c)  contravenes any prohibition imposed under the Service 
        Concession Agreement on the creation of security over the Concession 
        Property. (Added 11 of 2007 s. 12)