To the Editor of the "Nomru-Ciuwa Dany News"
Si—Resarding the return thi Company makes to. ite shareholders wwe would paint out that for a number lo years past this Company's dividends Have not exceeded 8 per cent pet This Company has recently concluded franchise agreement with the" Shanghai Municipal Counc, the terms of which are. retroactive "to Sanuary 11994. Under the terms of ihe franchise. we ave had. fo. pay the Council for 1894 "$83,000 "more royalty on gas sold than under the arrangement htberto. prevailing Payments to Ghe Council for farther taxation "on "account of increased stseasments during 1996 on this Company's property {in common with all ther property) have azo contributed "raising costs" where they cannot be curtailed. Tt is in an endeavour {fo meet this rising taxation that the eduction in price, complained of by your correspondent, was made in. the Hope that by stimulating gas sales that. section of our consumers where there Isa greater possibility Increased, consumption, the Come Dany might be able #0 avoid making all-round increase in price which would adversely affect the section of Consumers whose cause your corres: Pendent i chamolening quote, "exemplary Be" "refers "to the second. paragraph you
the minimum charge. this 'Company makes in accounts of consumers, who tse Tess than 200 €. fk ($250) of gas ber month, we have to point out that ince" the' ination of, the. charge wwe have received iostctions from 68 consumers affected by the regulation remove their gus installations and tu analysts of he relevant parculers five the following results These 68 consumers used 103.729 of. of gar in sik monthe te aloe of onion ta 4288 per For." year the. foal amount Tecelved for the ges" would Es 'The value of appliances held by the said' a8 consumers wat Capital charges on this value 17° percent. Unterest, Maintentnee "and Depreciton} "amount to From which it will be seen that he total amount received for the gas sold to 85 consumers falls short of "the veapltal hatees, "gri "the "epplances involved: by who, if no minimum charge existed, would add proportionally to the burden upon the Company and indirectly upon the remaining 12,000 consumers who must make up the deficiency in price on the gas distributed to the consumers of less than }900 ¢. ft. per month.
It is perhaps worth noting that the price of gas in Shanghai ($2.85 per 1,000 ¢. ft.) at exchange rate of 1/34 compares. very. favourably with the prevailing prices in Great Britain.
We regret having had fo go into so much detail in this matter but we desire to make our position clear.
'SANGUAT Gas Ca, Lro.
W. J, Brown.
Secretary. Shanghai, Apr. 30.
Text read from the printed page and cleaned; old type leaves the occasional error.