asked the Secretary of State for Scotland what financial targets he proposes to set for the Scottish Transport Group for 1980.
After discussions with the Scottish Transport Group, I have now set the following financial targets for 1980. These are interim targets for 1980 only, in view of the uncertainties facing the industry in that year. Medium term targets will be set for the group for the period beginning in 1981. The targets take account of the need to move towards earning the 5 per cent. real rate of return on new investment, the social objectives which the industry has to meet, and the group's statutory obligations.The target set for the Scottish Bus Group will require the group to break even in 1980 after receiving local authority revenue support and after meeting its obligations in respect of payment of corporation tax, repayment of capital debt and making a contribution to general reserve. The target is to make an operating surplus of £7½million after charging replacement cost depreciation and interest payments.For Caledonian MacBrayne ferry services the target which I have set is to break even after receipt of the grant which I give to support its approved services.For Scottish Transport Investments Limited, the holding company for the Scottish Transport Group's ancillary activities, I have set a target of making a surplus of 8 per cent. on its turnover for 1980, after charging for replacement cost depreciation.