Page 107 of 132
215
214
HONG KONG URBAN COUNCIL
advertisements, royalties and sale of souvenirs are concerned, we have got plans to cover those aspects. We co-operate with Wembley International to operate along commercial principles. The Hong Kong Stadium will be operated differently from that of the Urban Council. It is because the Urban Council's policy is to set the level of licence fees and venue charges on the basis of costs recovery only. On many occasions we have subsidies. But for the Hong Kong Stadium, we will be maximising the profits. We won't be having any subsidies. We will try to set out a reasonable rate. We won't be driving away the customers. This is what we call the commercial operation of the stadium. This is different from the sole cost recovery of our other charging policy of the Urban Council. As regards the actual setting down of the rates for hire charges and ticket prices, I don't think we need to go into details here.
MR. CHAN TAK-CHOR (in Cantonese):-I am not as optimistic as other members who are also members of the BOG. When we talk about commercial business, there is no guarantee to make profit. Since the Hong Kong Stadium is to be operated on a self-financing basis, rate payers should not be asked to subsidize the Hong Kong Stadium if it is run in deficit. My question is: Has the BOG ever considered in case of a deficit in the operation of the Hong Kong Stadium? Where does the money come from to top up the finances? Another question is: If there is a profit, part of it will be paid back to the Council, and part of it will be used for the promotion of sport. Can the BOG consider setting aside a portion of profit to prepare for rainy days i.e. when we have a deficit? The Hong Kong Stadium has yet to reimburse the Urban Council.
MR. STEPHEN LAU MAN-LUNG (in Cantonese):-Mr. Chairman, I would like to thank Mr. CHAN Tak-chor for having so carefully considered the situation. Up till now the Board of Governors has not considered the scenario of running a deficit. So no money will be set aside in a form of reserve to prepare for the deficit days. The budget is quite conservative. Also, concerning the suites, we hope that they will be promoted and be hired on a yearly to three-year basis so that there will be some sort of income guarantee to manage the Hong Kong Stadium. So the likelihood of deficit is quite minimal. In future, should we be able to generate surplus and should Councillors decide to set up a reserve fund to prepare for deficit days, I am sure the UC will welcome such a proposal.
MR. WONG SIU-YEE (in Cantonese):-I heard from Mr. LAU that we are very experienced in letting out restaurant premises and we are following our previous practices and policies. But then the Chairman mentioned that we are attempting to maximise the profit in addition to recovery of cost. I want to know whether there is a conflict. All along when we have contracted out the restaurant premises, we never fit out the premises. But this time while we fit out the premises, we are not calculating that as part of capital. So I want to know whether no charge is levied to the fitting out of restaurants. Is it a new policy or is it a mix of policy of the Chairman and that of Mr. LAU to form a new policy?
MR. STEPHEN LAU MAN-LUNG (in Cantonese):—Mr. Chairman, I think the policy mentioned by the Chairman and that mentioned by myself are both policy of the Urban Council. When we invite a tender to contract out the premises to run restaurants without renovation, the percentage of the turnover payable to the Council will be lower. In the case of Urban Council furnishing the premises, a higher percentage of the turnover will be paid to the UC. Of course, this rate is subject to commercial negotiation. In the earlier part of my answer, I mentioned that the policy for the Stadium is quite similar to the policy for other restaurants. I would like to remind members regarding the contracting out of the restaurants for City Hall and the Cultural Centre. We do not have the same rate for the Chinese restaurants and the Western restaurants and the amount of investment differs. The return that we get fully reflects that we are getting something back in return for our investment but the figures are not so clear cut. We always adopt an overall view. We cannot simply separate the income from individual food outlets and individual restaurants. What we have to do is to ensure that in the Hong Kong Stadium, the catering business can meet the various needs and tastes of the patrons of the Hong Kong Stadium and we must make sure that there is a variety of options for patrons.
MR. CHAN TAK-CHOR (in Cantonese):—Mr. Chairman, from Mr. LAU's reply, I would like to ask the BOG one question: Is the BOG guaranteeing that there won't be any deficit in the running of the Hong Kong Stadium. Is the Board of Governors responsible for paying if there is a deficit? The Chairman has been telling us that the Hong Kong Stadium will not be subsidized by rates in the case of a deficit. It seems that the BOG is giving us a guarantee that there won't be a deficit. If there is no such a guarantee and undertaking, I think the BOG must consider the possibility of having a deficit. If we have a poor year in which there is a deficit, where will the money come from? I think even for many commercial talents, they sometimes made mistakes in investments.
MR. STEPHEN LAU MAN-LUNG (in Cantonese):—Mr. Chairman, I am surprised. If members of the BOG can undertake to top up the deficit, then I think it will be the first among all the corporations in the world. Maybe I am ignorant and with respect to Mr. CHAN, if he is to be returned by the electors, will he also be asked to foot the bill in case of a deficit in the accounts of the Urban Council? I don't think you are required to do that. So I don't think the BOG members should be required to foot the bill in the case of a deficit?'
MR. CHAN TAK-CHOR (in English):—Mr. Chairman, ultimately I would like to request the BOG to consider the possibility of a deficit. I would just want to be told well in advance where the money will come from if there is a deficit?
CHAIRMAN (in English):-Thank you very much. The Board of Governors will take note of this point.
Page 107 of 132
Page 107 of 132