Annual Report 2015
RISK FACTORS
237
D. MAJOR RISK FACTOR ON SUBSIDIARIES
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NWS Holdings Limited (“NWSH”)
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Services division
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Construction & Transport
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15. Due to the “Railways as the backbone” transport policy of the government of the HKSAR (the “HKSAR
Government”), the growth of local franchised bus services is limited to consolidating and improving service
levels on existing routes. Furthermore, although labour unions are an important aspect of NWSH’s bus and
ferry transport workforce particularly with respect to wages, any sudden or unexpected strikes or disputes
which occur from time to time can substantially disrupt the day-to-day operations of NWSH’s transport
business. Accidents, natural disasters and civil disruptions could interrupt or prevent the operation of bus and
ferry services and lead to decreased revenue, increased expenditure, prolonged interruptions and a reduction
in NWSH’s operating flexibility. Although NWSH believes that the insurance it has put in place is adequate and
consistent with industry practice, there is no assurance that it will be sufficient to cover NWSH’s losses or that
such insurance will continue to be available to NWSH on similar terms. Accordingly, any of the above factors
could adversely affect the business, financial condition and operating results of NWSH.
Concession, franchise and license risks
16. NWSH operates and manages certain franchise businesses such as providing facilities services in respect of
HKCEC, operating public bus and ferry transportation services in Hong Kong and operating duty free tobacco
and alcohol sales under franchise and licence agreements. NWSH also has roads, energy and water projects
operating under concessions in Hong Kong, the PRC and Macau. There can be no assurance that renewals
of concession, franchise and licence periods can be obtained or that if renewed, that the terms of such
concession, franchise and licence will not be on terms less favourable than currently obtained by NWSH.
