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looking for. 1.
Asset sales aim to raise $112b over five years 2.
Infrastructure spending cut by one-third 3.
Private sector is invited to build recreational projects
worth $2.5b 4.
CHINA EYE 5.
West - Poorly performing students forced to pay higher
fees 6.
LCQ19: Protection of historical sites
1. Asset sales aim to raise $112b over five years
Georgina
Lee, The Standard 6 March 2003 The
government plans to sell or securitise government assets worth HK$112 billion
during the next five years. It
has also not ruled out issuing bonds to raise revenue. Financial
Secretary Antony Leung said in his budget speech the government would sell or
securitise government assets worth HK$112 billion between fiscal years 2003/04
and 2007/08, with HK$30 billion to be raised during 2004/05. ``There
is a list of assets that we plan to sell or securitise, actually you'd get an
idea from the telephone directory ... the usual suspects such as the Airport Authority,
KCR and MTR, tunnels,'' Leung said. ``The
government can also securitise its loans.'' Asked
later whether possible poor market conditions would hinder the asset disposal
- the reason the government delayed selling the second tranche of MTR Corp shares
last year - Leung dismissed the correlation. ``Last
year we did not put off the sale of the second tranche of the MTR shares due to
bad market conditions ... the delay was caused mainly by our studies on the merger
and restructuring of the two railways.'' Not pushing ahead with the sale of the
HK$15 billion worth of MTR Corp shares last year directly contributed to the HK$24.8
billion blowout from the original deficit estimate of HK$45 billion. While
it is not known which assets would be sold or securitised this year, the government
is reported to have already invited bids from investment banks to advise on the
merger of MTR and KCR operations. Ernst
& Young tax services partner Agnes Chan expected the government to dispose
of its tunnels first, saying it was unlikely the sale of the two railway operators
would happen this year as their merger was still up in the air. The
government also appears more open to issuing bonds to generate revenue, with Leung
saying he is ``not totally against'' it, but adding now is not the time. Leung
said the problem the government faces is the operating account, which has a shortage
of revenue to cover expenditure. Issuing bonds would improve cash flow but not
solve the underlying problem, he said. ``For
the time being, we can draw on our fiscal reserves to cope with the deficit, and
the cost of issuing bonds is higher than investment income from the fiscal reserves.
Therefore, we do not see any need to issue bonds,'' Leung said in his speech.
However, Ernst & Young's Chan said with fiscal reserves projected to fall
to HK$190-HK$240 billion in the next five years - equivalent to only nine to 11
months of public expenditure - there was already enough justification to issue
bonds to prevent the reserves from falling further. Although
the proceeds from a bond issue would not be income on the government's profit
and loss account, she said improving cash flow was also important. ``If
we are in a situation where we need to buy time to keep our reserves at a certain
level and strong enough to stave off speculators' attacks [on the HK dollar],
I think there is a genuine need to get that cash flow now,'' Chan said. She believed
the government was ``seriously considering'' the option.
2. Infrastructure spending cut by one-third
Keith
Wallis, The Standard 6 March 2003 Spending
on new government-funded infrastructure schemes is being cut by a third after
an analysis of the government's budget estimates shows it will be seeking first-time
funding for projects worth just HK$60.75 billion in the coming year. This
is compared with the current year's budget estimates that showed the government
planned to seek initial funding for schemes valued at more than HK$90 billion
in 2002-03. That was a HK$8 billion decrease on the value of new projects outlined
in the 2000-01 budget estimates. Overall,
the government is planning to spend about HK$2.82 billion on new construction
works in the next financial year, while a further HK$24.3 billion will be spent
on schemes that are already under way. The
new works include almost HK$592 million earmarked for the HK$4.6 billion Deep
Bay link and HK$357 million to kickstart construction of the HK$3.74 billion Shenzhen
western bridge. The Transport Bureau is expected to seek funding approval from
the Legislative Council's finance committee later this month for the first two
schemes. Officials
are also planning to spend an initial tranche of HK$596,000 on what will become
the HK$2.5 billion reconstruction of Tuen Mun road. A further HK$100,000 has been
allocated for new boundary crossing facilities at the Shenzhen western bridge
that will cost HK$2.78 billion, and the first HK$8 million instalment for the
HK$1.32 billion redevelopment of the second phase of Caritas medical centre. But
the budget estimates also include schemes that have been rolled over from the
current year. These include HK$500,000 in initial funding for a HK$1.05 billion
headquarters in North Point for the Independent Commission Against Corruption,
and HK$2 million to kick-off a HK$1.3 billion replacement broadcasting house in
Tseung Kwan O. During
his budget speech, Financial Secretary Antony Leung said: ``The average annual
provision earmarked for infrastructure works is about HK$29 billion over the next
five years.'' Leung
also announced a pilot programme of infrastructure projects to be financed by
the private sector. This is similar to the private finance initiatives in Britain
and Australia which had shown private-funded schemes are generally completed on
time, more cheaply and to a higher quality than those funded publicly. Leung
said: ``We will invite the private sector to submit expressions of interest on
10 or so recreational and cultural facilities projects worth about HK$2.5 billion.
The Home Affairs Bureau is working on the details.'' The
move follows extensive lobbying by contractors, consultants and industry groups
including the Hong Kong branch of the Association of Project Management. Hong
Kong branch chairman Andrew Macpherson welcomed Leung's pilot scheme. He told
The Standard: ``It's a step in the right direction. I don't know if it's a reaction
to our own lobbying or that by other groups. We have already written to him about
the benefits of public-private sector participation.'' Macpherson
added: ``He has recognised the existence of private finance infrastructure, that
it has been successful. He's taken a conservative approach. The challenge for
the private sector is to make that HK$2.5 billion work, then it could become ever
increasing.''
3. Private sector is invited to build recreational projects worth $2.5b
PUBLIC
WORKS by MAY SIN-MI HON, SCMP 6 March 2003 The
private sector will be invited to build around 10 cultural and recreational projects
worth about $2.5 billion to further implement the concept of "big market,
small government". A
list of infrastructural projects will be introduced for private sector participation
on a trial basis. Potential
investors will be invited to put forward development packages for projects covering
design, building, operation or other options involving private financing. The
government will then consider offering the projects through competitive bidding
to the market. Those
chosen for the list will be under the scope of the Home Affairs Bureau in the
first stage, though the idea is expected to be extended to other bureaus in the
future. In announcing
the plan, Mr Leung said: "Some consider that the government should take the
opportunity of the current economic downturn to invest substantially in infrastructure.
We agree." He
said the plan would help "speed up project delivery, increase opportunities
for investment in Hong Kong and further the principle of big market, small government".
He also stressed
the average amount to be spent on capital works each year will be more than $29
billion over the next five years which is similar to that provisioned for the
past few years. Legislator
Raymond Ho Chung-tai supported the proposal. "It
will tap creativity of the private sector in developing the projects. These can
be stadiums or libraries. "The
government can either grant the development rights to the developer that submits
the plan or give it credits in an open tender," Dr Ho said. Other
major capital works the government plans to start in the next financial year include
the central government complex worth $6.4 billion to be built at Tamar in Central.
The Legislative Council complex, the exhibition gallery and a civic area will
be built at the site. Another
$26.9 billion will be spent on projects including the Deep Bay Link, the Shenzhen
Western Corridor, linking Shekou and Yuen Long, and the reconstruction and improvement
of Tuen Mun Road. Others
include the new Radio Television Hong Kong building to be built in Tseung Kwan
O.
4. CHINA EYE
SCMP,
6 March 2003 
Putting the horse before
the car: A convoy of horse-drawn carts carries building materials in the Wang
Jing District on the outskirts of Beijing. Despite a rapid rise in the number
of trucks and cars, working horses and their drivers remain a common sight in
cities across the country. Picture by Mark Ralston
5. West - Poorly performing students forced to pay higher fees
SCMP,
6 March 2003 SHAANXI
- A primary school in Hanzhong has forced its students with the poorest academic
results to pay an extra 200 yuan to the school, Hausheng News reports. The new
policy says the 10 worst academic performers in each class must pay the fee. The
school's management said the scheme is justified as their budget is low and they
need to develop facilities. They would like the worst performers to leave, and
say the should pay extra to stay.
6. LCQ19: Protection of historical sites
Hong
Kong Government, 5 March 2003 Following
is a question by the Hon Bernard Chan and a written reply by the Secretary for
Home Affairs, Dr Patrick Ho, in the Legislative Council today (March 5): Question:
It has been reported
that a government department has built a concrete platform and installed a temporary
office over an anti-aircraft position at Wong Nai Chung Gap; while a concrete
stairway has also been built at the Devil's Peak forts area. In this connection,
will the Government inform this Council: (a)
why a concrete platform and a concrete stairway have been built on these historical
sites; (b) what
preventive measures the Government has taken to minimise the damage to these historical
sites; and (c)
whether the fiscal deficit affects the measures taken by the Government to protect
historical sites; if so, what the effects are? Reply:
Madam President,
At certain points
of time in our history, Hong Kong was an important military outpost and battlefield,
dotted with hundreds of military buildings and sites of varying scale. The most
representative ones are either declared and put under the protection of the Antiquities
and Monuments Ordinance, or graded and put under close monitor by the Antiquities
and Monuments Office. The two sites in question are neither declared nor graded,
but are recorded for reference in devising long-term protection measures. In
the Wong Nai Chung Gap case, a temporary hoarding (not a platform) was built on
the site to provide temporary storage space under a project named "reconstruction
of catchwater channels on Hong Kong Island and Lantau Island" commissioned
by the Water Supplies Department. The hoarding has not caused any damage to the
historical structures. On completion of the work, the Water Supplies Department
has removed the hoarding in end February 2003 and handed back the site to the
District Lands Office. In the Devil Peak's fort case, a footpath has been in existence
for many years before it was repaved in 2002 to ensure visitor's safety. In both
cases, the works have not caused permanent damages to the main body of the historical
structures. Measures
to protect historical sites and structures are implemented at two levels. At the
legislative level, sites and structures with outstanding historical and architectural/
archaeological values are declared as monuments, and stringent statutory restrictions
imposed to prohibit demolition and limit alteration. At the administrative level,
the Antiquities Advisory Board has adopted a non-statutory grading system whereby
historical buildings are assessed according to their heritage and architectural
merits. Relevant Government departments are furnished with a list of graded buildings,
and are requested to alert the Antiquities and Monuments Office if they receive
proposals which may cause disturbance to the buildings. Action will then be taken
to identify alternatives or mitigations, and to protect historical buildings from
demolition as far as practical. Irrespective
of the fiscal deficit, we attach great importance to the protection of heritage
and monuments. Earlier in this year, the Leisure and Cultural Services Department
has strengthened the manpower of the Antiquities and Monuments Office through
redeployment of internal resources. We would continue to take appropriate measures
to ensure smooth delivery of the work of protection of heritage and monuments
even under resources constraints. | 
