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whole. We should not solely rely on restaurants or any single party to recover the expenditure. I think we should take the Hong Kong Stadium as a whole. We cannot simply single out one operator for recovery of expenditure.
CHAIRMAN (in English): We also try to emphasize that it is not productive, and it is only a purely academic exercise to separate the costs of fitting out restaurants with regard to the costs for the whole Stadium. From the point view of the Urban Council, I think we are interested in how much the surplus the Stadium will get and how soon will the Council be paid back. I think that will be a more balanced view rather than to segregate the restaurants income because all different source of income will be put together and this surplus will have to pay in the first instance to the Urban Council. So we need not separate restaurants profit to repay the restaurant fitting-out costs.
THE HONOURABLE FREDERICK K. K. FUNG (in Cantonese): Mr. Chairman, at the last SCWC meeting, the Board of Governors promised to report to the Council on a regular basis concerning the progress of their work. Councillors and the press have expressed a very keen interest in this matter. So a question for the Board of Governors: whether it is possible to give us a report in as short a period of time as possible to tell us about the financial position of the Hong Kong Stadium, e.g. regarding the hire charges for the commercial part of the Hong Kong Stadium. I understand that the Chairman has talked about the bookings and also the hire of the suites. I think such information should be disclosed so that the public and the Councillors will know more about it and that can reduce the number of questions concerning the Hong Kong Stadium.
MR. STEPHEN LAU MAN-LUNG (in Cantonese): Mr. Chairman, as mentioned at the last SCWC meeting, in future, at our monthly regular meetings, there will be a regular report concerning the management of the Hong Kong Stadium. I am sure when we come to the item concerning reports by Select Committees, Members can ask questions in this regard. So Members of this Council who would like to ask questions concerning the Hong Kong Stadium will have an opportunity to do so and I am sure Members can have their questions answered. As regards the question on suites and also the income generated therefrom, I understand that all 50 private boxes have been let so to speak. I understand that they will be generating an income of $50 million for the year 1994/95.
CHAIRMAN (in English): I think Fred Li has a follow-up supplementary.
THE HONOURABLE LI WAH-MING (in Cantonese): Yes, thank you Mr. Chairman. In paragraph 1 of Mr. LAU's answer, he mentioned that it is up to the UC to decide whether or not this expenditure should be recovered from the proceeds. I do understand that it will be difficult to say for certain when the recovery of expenditure will happen. But still I want to know whether the Board of Governors has reached a consensus to recoup expenditure as soon as possible
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i.e. to recover expenditure from the proceeds generated by the Stadium and that the reimbursement to the UC of the $175 million will be given the first priority. I don't know whether there is such consensus. It seems that you are nodding your head, Mr. Chairman. So the answer to my question is positive, right? But will the consensus to give it as a priority be in conflict with the proposal to allocate resources to the promotion of sport? i.e. if we give priority to reimbursement to the UC, will that jeopardise or affect or conflict with the resource allocation to the promotion of sport? I would like to be given some sort of clarification?
MR. STEPHEN LAU MAN-LUNG (in Cantonese): Mr. Chairman, on this question, I think Mr. Li has got it right. In paragraph 3 of my reply, it is clearly stated that the Board of Governors is only responsible for the management of the Hong Kong Stadium. It is hoped that the Hong Kong Stadium will be managed along highly commercial lines. The best efforts will be spent to get as much profits as possible. As to the surplus it is up to the Councillors to decide how much or whether the full amount of the surplus will be used to reimburse the UC. As to the implications on the promotion of sport, it is up to the 40 Councillors to decide. The BOG does not and will not usurp the function of the UC.
CHAIRMAN (in English): Also, in paragraph 1 of Mr. LAU's reply, he mentioned that at the Triennium Negotiation with the Government and the Secretary for Treasury on 7 January 1994, to ask the Government to pay for this $175 million so that it would be neat and tidy that whatever surplus in the future from the Stadium will be for sports promotion. But this suggestion was turned down by the Government. So we have no other alternative but to recoup this sum of money from the Stadium surplus. And I think there is a consensus among the Board of Governors that the Urban Council should be paid in the first instance.
MR. SAN STEPHEN WONG HON-CHING (in Cantonese): Thank you, Mr. Chairman. Just now Mr. LAU has talked about the fitting-out costs. I understand that only part of it is to be spent on the fitting-out of the restaurants. My understanding is that you need a minor re-decoration on a 3-year basis and a major renovation on a 5-year basis. This is a common practice for the restaurants. Does it mean that the UC will have to foot the bill on a 3-year and 5-year basis? Are we going to have the same arrangement in the future? Or will it be the case as mentioned by Mr. WONG Siu-yee that this unprecedented practice will discontinue?
MR. STEPHEN LAU MAN-LUNG (in Cantonese): Mr. Chairman, I believe that running business will involve a lot of calculations. If we are going to fit out the restaurants which subsequently need renovation or there is a change of operators, I think, this must be stated very clearly in the contract regarding future decorations or renovations. As mentioned earlier, the restaurant operators have signed contracts with us for a period of two years or three years plus three years. I am sure all these aspects will be taken care of in the
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contracts. I do not think the UC will have to be liable. So if they are going to rent the premises on a continuous basis, I do not think the UC has to pay for the fitting-out costs. Even though if there is a change of operators in future, the new contractors are to be called in to renovate the place and the renovation expenses will be shouldered by the new operators and not by the UC.
MR. PAO PING-WING (in Cantonese): Mr. Chairman, what concerns me is not the absolute figure because Mr. Stephen LAU and yourself have already given us a picture as to what will happen in future. You have already told us how we are going to recoup the $175 million on a long term basis. Mr. Chairman, what concerns me is about the policy. Mr. K. K. FUNG mentioned about financial figures to be submitted by the BOG to the SCWC. For solid figures to be tabled as mentioned by Mr. LAU Man-lung, they arise from policies set down by the relevant parties e.g. the food outlets and restaurants will contribute different percentage of the net proceeds. My question is: Regarding the rental charge or what we call the royalty, I want to know about our policy on this aspect. I wonder whether Mr. LAU can answer me on this point or whether a detailed paper to the SCWC concerning the policy on our royalties can be given. This is my first question. My second question is: I want to know more about paragraph 1 of the reply given by Mr. Lau. Mention is made about the fact that the UC will decide how much of the surplus will be used for the reimbursement to the UC. I want to know whether Mr. LAU Man-lung can give us some sort of guarantee i.e. no matter what will happen in the event of surplus, we have to take care of both aspects of the matter, that is one for recouping of expenditure by the UC and the other is for the promotion of sport. So I want to know whether the BOG has come to a balanced distribution of the surplus or whether it will be given priority to the UC only. The third question concerns the last paragraph i.e. concerning the $5 million for the opening gala. I understand that the BOG has been trying its best to reduce the figure as much as possible. Mr. LAU says that the BOG is working hard to reduce it to a lower figure as far as possible. Can Mr. LAU tell me what are you trying to do? Are you trying to do more in securing sponsorship or trying to get more advertisement? Can Mr. LAU answer these three questions?
MR. STEPHEN LAU MAN-LUNG (in Cantonese): Mr. Chairman, regarding the policies for the charging of royalties, I do not think the BOG has to set down any new policies. It is because the UC has very rich experience in letting out premises for operators to run restaurants. I think it is best to follow our standing policies. It has always been a practice to charge a certain percentage of the turnover. This is the same for the City Hall and the Cultural Centre restaurants. As to the actual percentage rate, I am afraid that this is commercial secret and it is not appropriate for me to divulge the information. As to the second question as to how much will be reserved for the purposes of promoting sport and how much will be used to reimburse the UC, as mentioned in paragraph 3 of my reply, all I have to do is to repeat it. The BOG is only tasked to get as much surplus as possible. It is up to the Council to decide how the surplus is to be spent, i.e. how much to be spent on the promotion of sport and
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