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1. Repair fund proposed for buildings

2. 'Steady Eddie' ends a popular reign at the BOE

3. Ministerial system has been beset by scandals of all scales

4. Public Popularity - How Tung's Team Rate

5. A rudderless ship headed nowhere?

6. Welcome to an unhappy Hong Kong, Premier Wen

7. Why the ministerial system is a flop

8. China Construction Bank at centre of a new scandal

9. Cyberport chief 'designs' on the bottom line

10. SMART THINKING "So much better, as LI quits!"

1. Repair fund proposed for buildings
CHLOE LAI, SCMP 30 June 2003

Housing officials plan to make it mandatory for every private building to have its own "sinking fund" to be used for maintenance and repairs, Director of Buildings Marco Wu Moon-hoi has disclosed.

The setting up of a reserve fund would be among a series of measures the Housing, Planning and Lands Bureau has proposed for public consultation at the end of the year to improve building management and maintenance.

The moves include requiring every private building to have an owners' incorporation.

The proposal comes at a time when building maintenance, and its impact on public hygiene, is at the forefront.

During the Sars outbreak, the Amoy Gardens estate was particularly hard hit, with 43 residents dying. Faulty plumbing was seen as a contributing factor.

In an interview with the South China Morning Post, the buildings director said the benefits of a sinking fund - reserved for use on repairs and maintenance - would overcome the reluctance of many owners to spend money on maintenance.

"There shouldn't be much money needed to keep a new building in good shape. If the building you reside in had a sinking fund, you wouldn't be bothered," Mr Wu said.

"I imagine that if the management fee is just $500 a month, paying an extra $50 a month [for the sinking fund] shouldn't be a problem. With the contribution of every family, over time, a reserve should be built up and it would pay for the maintenance when necessary."

Private architect and urban regeneration taskforce member Chris Law agreed with the buildings director.

"The problem now is that when a building needs maintenance, it always involves a lot of money, which means suddenly every family in the building has to pay a large sum to get the work done. If there is a sinking fund, everyone just needs to pay a bit every month," Mr Law said.

He said some estate management companies had set up sinking funds for residential blocks they managed. The practice is more common with luxury buildings.

Since it is not mandatory, the accumulated money often ends up being used to pay for management fees instead of being kept for building maintenance.

"It is quite common that after the fund has accumulated, some homeowners will ask the estate management to use the reserve to cover the management fee, so everyone can pay less," the architect said.

However, Mr Law questioned how the government could force all the owners' corporations in Hong Kong to have a sinking fund, especially in older buildings where the issue of maintenance was more pressing.

According to government figures, the city has about 10,000 buildings that are at least 30 years old.

They are poorly maintained, posing serious safety and sanitation problems.

Under the "co-ordinated building maintenance scheme" of the buildings department, a total of 200 residential blocks had completed their maintenance work last year.

2. 'Steady Eddie' ends a popular reign at the BOE
Agence France-Presse in London, SCMP 30 June 2003

Sir Edward George, who is known for his colourful statements ('I have nothing against Heathrow and Gatwick - except the location') will clear his desk at the Bank of England this week after a 10-year stint at the helm of the British economy that has made him the darling of the City financial district. The Bank of England governor steps down officially today after a 40-year love affair with the Old Lady of Threadneedle Street, as the central bank is known.

The chain-smoking banker, who hands the reins to deputy chief Mervyn King, joked recently that when he retires he will "make the transition from Who's Who? to Who's He?"

In reality, history will almost certainly remember him as the man who oversaw a decade of low inflation and steady growth in Britain that earned him the nickname "Steady Eddie".

After graduating with a degree in economics from Cambridge University, Sir Edward started out at the Bank of England in 1962, working on Eastern European affairs. His favourite joke is: There are three sorts of economists. Those who can count...[pause]. And those who can't.

He was seconded to Moscow State University in 1964 to learn Russian before going on to work at the Bank for International Settlements in Switzerland in 1966.

After a two-year stint at the International Monetary Fund working on international monetary reform, Sir Edward returned to the Bank of England in 1974 as an adviser on international money matters.

But it was as governor from 1993 that Sir Edward rose to fame as one half of the "Ken and Eddie show" - his monthly meeting with the then chancellor of the exchequer, Kenneth Clarke, who always had the last say on interest rates.

Recalling the meetings, Mr Clarke said in a radio interview last week that Sir Edward was "perfect for the part, because he's an ordinary human being, when not every central bank governor over the years has appeared like that".

"He's very congenial and easy company. We shared one bad habit - both of us used to smoke like chimneys throughout the monthly meetings on interest rates, so all our colleagues had to be kippered (smoked)."

It was after the new Labour government gave responsibility for setting interest rates to the Bank of England in 1997 that Sir Edward won the most plaudits, heading the central bank's nine-member monetary policy committee (MPC).

The central banker has ruffled a few feathers in his time, with one backbench member of parliament famously accusing him of being an "inflation nutter".

In a recent newspaper interview, Sir Edward said: "I regard it as a compliment to be called an inflation nutter."

To others, though, he is the saviour of the pound, since the success of the MPC is often cited as a reason why Britain should not drop the pound in favour of the euro, thereby ceding control of interest rates to the European Central Bank.

3. Ministerial system has been beset by scandals of all scales
AMBROSE LEUNG, SCMP 30 June 2003

The ministerial system has faced a number of challenges since its implementation 12 months ago.

Apart from the "cargate" scandal involving Financial Secretary Antony Leung Kam-chung, and the blunders surrounding the penny stock fiasco and the management of the Sars outbreak, most cabinet ministers have been criticised for policy failures.

Within weeks of the launch of the system, a government proposal to de-list low-value stocks sent shockwaves through the financial market.

Secretary for Financial Services and Treasury Frederick Ma Si-hang was forced to offer a public apology one day after refusing to do so in September. He said he had no knowledge of a consultation document prepared in July which proposed delisting the so-called "penny stocks". The proposal triggered panic dumping and wiped more than $10 billion off the market value of shares.

The biggest challenge to the system came when it was revealed that the financial secretary had bought a luxury Lexus 430 car before announcing a hefty rise in the first-registration vehicle tax in his March budget. Mr Leung has defended his act as an oversight.

Despite intense pressure to hold the finance chief responsible, Chief Executive Tung Chee-hwa refused Mr Leung's offer to resign, while criticising him for showing "gross negligence". A no-confidence motion moved in May by legal sector legislator Margaret Ng Ngoi-yee was blocked by pro-government parties.

Mr Tung himself also faced and survived an unprecedented motion calling for his resignation in May. Observers said that although the motion, moved by independent Albert Chan Wai-yip, was voted down by pro-government parties, it damaged his already-dented credibility.

The system's most recent test came during the Sars outbreak, when Secretary for Health, Welfare and Food Yeoh Eng-kiong was under pressure to resign for the government's failure to contain the virus at an early stage. Mr Tung has stressed that a government review panel, led by Dr Yeoh himself, will probe the health system but will not apportion responsibility.

4. Public Popularity - How Tung's Team Rate
SCMP, 30 June 2003

5. A rudderless ship headed nowhere?
PHILIP BOWRING, SCMP 30 June 2003

People from most walks of life in Hong Kong have some reason to join the demonstrations tomorrow against the Article 23 legislation. The sixth anniversary of the handover is an appropriate time to take whatever legal action is available to record resentment at the failure of the system to deliver on either of the two slogans which made the handover such an opportunity for Hong Kong.

They were "one country two systems" and "Hong Kong people ruling Hong Kong". Both have been sold out by members of an incestuous clique who have wrapped their personal and business interests - and in some cases their foreign passports - in a cloak of patriotic verbiage.

But any assessment of Hong Kong since 1997 must be judged not just against the expectations and promises of the handover but against what has been happening in the rest of the world. How is "Asia's world city" faring, and how has the world changed in ways to which Hong Kong must adjust?

In no particular order, Hong Kong must adjust itself to the following external developments. One is the continued rise of China's economic power and position in the world. Whatever the future may hold, the mainland has barely deviated from a steady path of economic reform and gross domestic product growth, and some very tentative political liberalisation.

But instead of using this to capitalise on Hong Kong's special relationship with the outside world, the dominant policy and attitudes have simply been to regard the mainland as a crutch. As long as the mainland prospers, Hong Kong does not need to worry, goes the assumption. If tourism is weak, appeal to Beijing to open the taps. If the stock market is weak, ask for special access for mainland capital. Meanwhile, Hong Kong's international and regional roles are underplayed by political and business interests who proclaim it to be Asia's world city but act as though it were simply the main city of the Pearl River Delta.

The closer economic partnership arrangement (Cepa) sums up the futility of Chief Executive Tung Chee-hwa's version of government. The man who in the mid-1980s was saved by Beijing from bankrupting his inherited family business is now looking to Beijing to be the saviour of the Hong Kong economy. In fact, the Cepa at best is an irrelevance, a political gesture to show that the mainland is helping Hong Kong and that the Hong Kong government has a policy to revive the economy.

At worst, it is the thin end of a large wedge. It will undermine Hong Kong's reputation as an independent actor and promoter of multilateral free trade at the World Trade Organisation. And its fuzzy definitions and probably arbitrary application by the central government will create all kinds of new opportunities for cronyism and corruption.

The second thing that has changed is much of the rest of East Asia. The 1997-1998 economic crisis was difficult for Hong Kong - but probably not difficult enough. South Korea, Thailand, even Malaysia went through wrenching changes from which they have emerged generally stronger.

There will be no repetition of the 1985-1997 euphoria. But this region has regained its place as the most dynamic in the world. Because Hong Kong's crisis was relatively mild, it was not forced to adjust as fundamentally as some of its neighbours, so it is not sharing much of the renewed optimism that comes from having faced and responded to a crisis. For Hong Kong, alternating fixations with the mainland and the US - including the obsession with the dollar peg - limit its ability to share in the rapid gains in world trade being made in East Asia.

On the international political front, the biggest change by far has been in US policy towards the rest of the world and its own citizens. September 11 has given free rein to Bush administration instincts that can only be described - and I do not use this word lightly - as fascist. These include the large-scale, often race- or religion-based detentions without trial, the Guantanamo concentration camp, the use of the Patriot Act to justify all manner of illiberal acts such as reporting on neighbours - a favourite of the former East Germans. The cabinet prayer meetings and strong identification with Christianity fudge the church-state divide central to the US constitution.

The right-wing, but libertarian, Cato Institute now regards the neo-conservative right of US Defence Secretary Donald Rumsfeld, Attorney-General John Ashcroft and company as more dangerous to US liberties than discredited socialist doctrines.

How should Hong Kong respond to all this? Unfortunately, the liberal and democratic voices in Hong Kong spend too much time promoting their cause in President George W. Bush's illiberal Washington and too little in newly democratic Asia. The US was the standard-bearer of liberal democracy, but is it now? Hong Kong's secretary for security is a model of tolerance compared with Mr Ashcroft. America was the great growth market, but its debts will now hobble it for a generation. Hong Kong needs to take that on board.

Six years on from the handover, Hong Kong seems unable, thanks to an unrepresentative government, to define its own identity. It divides its loyalties among false gods in China and the west, and has an apparently diminishing interest in either non-Chinese Asia or the non-Asian world other than North America. Hong Kong should think of how to prosper economically and socially from a wider world. Think of South Korea, Brazil, South Africa, even Russia as sources of growth and inspiration for political and social change.

Philip Bowring is a Hong Kong-based journalist and commentator.

6. Welcome to an unhappy Hong Kong, Premier Wen
CHRISTINE LOH, SCMP 30 June 2003

There are two interesting questions about what will happen in Hong Kong tomorrow. The first is: how many people will protest? The second is: how will Premier Wen Jiabao find his welcome in Hong Kong?

One certainty, barring bad weather, is that the premier will find a lot of people on the street. Estimates range from 100,000 to even 250,000 people.

However the government wants to look at it, tomorrow's demonstration will be the biggest show of discontent ever staged against the administration of Chief Executive Tung Chee-hwa.

Mr Tung and Executive Councillor James Tien Pei-chun of the Liberal Party have said the protest will be bad for Hong Kong because it will turn off overseas investors. But they have missed the point entirely: Overseas investors do not mind the expression of free speech and assembly. They applauded it during the Sars outbreak for putting the truth before the public. Investors see this as one of Hong Kong's most important core strengths.

The administration does not seem to be able to grasp why people want to protest. A Civic Exchange poll released last Friday provides an answer: Hongkongers believe the government pays no attention to their views. On the issue of national security legislation under Article 23 of the Basic Law, 55.3 per cent of the respondents opposed and only 16.4 per cent supported the legislation in principle, whereas the chief executive and the secretary for security continue to insist the majority of the people support it. The truth is, the administration does not bother to listen. Its effort to "consult" last year was shown to be a sham by a group of academics who combed through the results.

Furthermore, the chief executive's insistence that foreign governments were misled over Article 23, because "some people went [overseas] and made some comments", was nothing short of farcical. There are serious problems remaining with the draft bill. For example, the Civic Exchange poll showed that 84.7 per cent of respondents oppose giving the police powers to enter their homes without a court warrant, as the bill proposes. Mr Wen's staffers should help him understand why Hong Kong people are so unhappy with the administration. Has it got anything to do with the way Hong Kong has been governed over the last six years?

The premier should notice this, as well: 71.3 per cent of the poll respondents believed the Tung administration paid more attention to the opinion of the central government than to that of Hongkongers on Article 23. That is not to say Hong Kong people oppose the central government. They just do not think the Tung administration can guard Hong Kong's interests adequately. Another interpretation may be that people here do not believe the Tung administration has the ability to deal with difficult issues relating to "one country, two systems".

Mr Tung's lack of popularity and competence may be shown up by the much more engaging and able Mr Wen. Since becoming premier, Mr Wen has shown his own distinct style. He has portrayed himself on the mainland as the people's premier. He went down coal mines to talk to miners. During the Sars outbreak, he visited hospitals and university campuses to speak directly to worried citizens. His friendly and unassuming style won wide applause. The premier also made his mark overseas. At a conference of the Association of Southeast Asian Nations, he acknowledged China's inadequate response to Sars. His no-fudging attitude made it easier to conduct dialogue on future collaborations.

So Hongkongers should not be surprised to see him up close. Of all the nation's leaders, Mr Wen is the most likely to go on public walkabouts. Hong Kong people want to be able to feel close to their national leaders as well. Mr Wen is likely to have a warm reception wherever he goes in this city. We appreciate him coming and we appreciate his willingness to reach out to us.

We hope he does not mind that we share our grievances with him. We know it is not easy for the leadership to deal with the governance deficit here. We hope that he will ask his staffers to thoroughly research the situation here for him. He will find that we are not against the central government.

Mr Wen, welcome to Hong Kong.

Christine Loh Kung-wai heads Civic Exchange and is a former legislator.

7. Why the ministerial system is a flop
MEI NG, SCMP 30 June 2003

Hong Kong's so-called accountability system marks its first anniversary tomorrow. Has it worked well and served Chief Executive Tung Chee-hwa's original intention? A single case of bad accountability, related to the Disneyland project, exposes the system's weakness.

Would you buy a piece of land without conducting a detailed land survey? Would you conclude a deal without clarifying hidden risks or liabilities? Would you demand compensation after you discovered nasty surprises on the site that warranted an extensive cleanup? Any common-sense buyer would use caution in billion-dollar deals, but not the Hong Kong government's officials.

The cost of decommissioning the Cheoy Lee Shipyard at Penny's Bay, northeast Lantau island, to make way for road access to the Disneyland theme park, was inflated from an estimate of $22 million to $450 million. The price ballooned because a fast-tracked environmental impact assessment (EIA) failed to notice the amount of toxic contamination at the shipyard. After the government purchased the land for $1.5 billion in taxpayers' money, a later inspection found the shipyard contained 80,000 cubic metres of contaminated soil, including 30,000 cubic metres polluted with dioxin. The government said it would seek legal opinion as to whether it could sue the shipyard for the recovery of costs under the polluter-pays principle. A year has passed, but the government has still failed to disclose whether it will take the shipyard to court.

The director of the Environmental Protection Department has not been made answerable for the mess, even though he endorsed the fast-track EIA report that lead to the misuse of public money. The then tourism commissioner and principle negotiator over Hong Kong Disneyland, Mike Rowse, was promoted instead of being obliged to account for the maladministration.

The "accountability system" was further eroded by the Ombudsman, whose duty is to investigate government maladministration in response to public complaints. Friends of the Earth (FoE) filed a complaint on March 23, 2000, challenging the government's decision-making process based on the incomplete EIA. But the Ombudsman sided with the government, and did not back FoE's claims. From cover-up to more cover-up, the mockery of the "accountability", or ministerial, system continues.

Before judging our ministers, though, it is time to ask fundamental questions. Was the ministerial system put in place without enough structural support? Is there a robust and independent checks-and-balances mechanism in place? Is the checker (the Ombudsman) defending the public's, or the government's, interest? Who is checking the checker? The other birth defect of the "accountability system" lies in the size of some portfolios and the confusion arising from overlapping responsibilities. Take, for example, the Environment, Transport and Works Bureau, headed by Sarah Liao Sau-tung. Environmental groups have always called for an independent environment bureau out of fear that the environment is being compromised by development. In the past year, we have seen work speed up on bridges, highways and rail lines, while delays continue to dog policies on conservation, renewable energy and charging fees for landfill dumping.

Dr Liao and her team deserve credit for keeping the environmental policy debate alive, but obstacles come from within the government system itself. Renewable energy policy, for example, is the responsibility of Dr Liao's bureau. But the overall responsibility for energy policy rests with fellow minister Stephen Ip Shu-kwan of the Economic, Development and Labour Bureau (EDLB), which regulates the power companies' profits and electricity pricing. Unless the electricity monopoly is dismantled, there is little room for alternative energy. So, the success of Dr Liao's renewable energy policy depends on the EDLB, which is under continuous lobbying pressure from the two power companies.

The waste disposal crisis increases as landfill space runs out. Dr Liao has stayed on-track, pushing for landfill fees for construction and demolition waste. But a moratorium on government fees, taxes and other charges announced in the budget speech has disrupted the timetable for the waste-reduction exercise. The environment never wins, in good times or bad.

On the first anniversary of the ministerial system, it makes sense to review the institutional framework and clarify overlapping and split policy responsibilities. Why not set up independent bureaus for health, welfare, the environment, labour and energy? Is it wise, after Sars, to retain the status quo at the huge Food, Health and Welfare Bureau? Would it be wise, after Sars, to attach a higher priority to environmental management? Or, to manage climate risks with an independent energy bureau?

Accountability is more than a political sweetener. It should be a civil service culture that helps to rebuild the public trust in a government committed to serving the public good. The first tango with the "accountability system" was out of sync. It is time to address the flirtation with unaccountability, Mr Tung, or the public audience will not have the patience for another tango.

Mei Ng (meing@foe.org.hk) is a UN Global 500 Laureate and director of Friends of the Earth in Hong Kong.

8. China Construction Bank at centre of a new scandal
REUTERS in Beijing, SCMP 30 June 2003

The China Construction Bank has punished nearly 500 employees after authorities uncovered fake loans and other problems involving more than one billion yuan (HK$940 million), state media said yesterday.

The bank, one of the country's "Big Four" state banks, had punished 474 officials this year during a probe by the National Audit Office, the Beijing Youth Daily quoted a company spokesman as saying.

The national audit office report said criminal charges could be brought against some of the officials.

Checks into dozens of branches of the bank by auditors had found illegal loans, faked profit and loss figures, and secret accounts, a report by the audit office said last week.

A random check of mortgage lending at eight Construction Bank branches in Guangdong found one billion yuan in fake loans, the report said.

The bank, which is China's largest mortgage lender, had been looking into operational problems itself after warnings from auditors earlier this year, the newspaper said.

"More than 80 per cent of the secret account problems occurred in the 1990s, and more than 70 per cent of the illegal operational problems occurred before 2001," it quoted the spokesman as saying.

The latest reports of fraud and abuse at the bank and another state institution, the Agricultural Development Bank, underscored how much work was needed to clean up the ailing sector.

But that they had been revealed also showed that China was serious about fixing the problems, analysts said.

9. Cyberport chief 'designs' on the bottom line
Lai See, SCMP 30 June 2003

That Robert Lee Chi-hong is such a card. The chairman of PCCW Infrastructure was in spiffy spirits last week. When he attended the grand opening of Cyberport in Pokfulam there was duplicity all around.

Perhaps the reason behind this was that he has just returned from a quick jaunt around Europe to buy some more antique furniture. Lai See was impressed with Mr. Lee's bargaining skills. On the last such trip - to source furniture for Residence Bel-Air - he admitted to beating down vendors' prices by up to 20 per cent.

This trip was exceptional. Mr. Lee managed to knock 30 per cent to 35 per cent off the going price. Amazing.

No doubt PCCW's properties will be adorned with superb antiques. Just a pity Residence Bel-Air still looks nothing like the 14th-century French chateau it uses to promote the flats in advertising paraphernalia.

Still, Mr. Lee did his part by keeping costs down. Did we mention his bargaining trick? He pretends to be a designer. Duplicity all around then.

10. SMART THINKING "So much better, as LI quits!"
Lai See, SCMP 30 June 2003

Lai See could not let the grand opening of Cyberport pass without a mention of its breathtaking innovation and aesthetic beauty. Ho, ho, ho.

But it shall be captured in history, thanks to a time capsule put together at the inauguration ceremony. MTR Corp boss Jack So Chak-kwong was on hand, donning his second hat of PCCW executive.

Down under "The Australian" newspaper which refers to Mr. Li as a "playboy entrepreneur" ran the headline "So much better as Li quits".