HONG KONG URBAN COUNCIL
Page 31 of 115
59
Wembley to manage the Stadium is to try to benefit from its international experience and competence in sports so that they will be able to create a very lively scene in Hong Kong. But in the answer, this is not mentioned. It seems that Wembley is simply a Stadium Manager. Is it true that the UC itself cannot be a manager if his role is simply to sit there to wait for bookings? So may be our job is only to maintain or nourish the pitch or the grass? Was the BOG wrong in signing the management agreement with Wembley? Up till now, I have not got hold of a copy of the management agreement. So I have more and more reasons to suspect that an agreement has been signed whereby Wembley is not required to do promotional works. It just has to wait for people to come for bookings. If that is the case, I really don't know how to further elaborate.
MR. STEPHEN LAU MAN-LUNG (in Cantonese): Mr. Chairman, please allow me to answer Mr. WONG's questions in simple terms. Most of his points are actually comments and criticisms. It is hard for me to respond to those but I will try to address his queries. In paragraph 4, it is very clear in the answer about the financial forecast in November 1993. The projected profit was $21 million. As regards the forecast in the report of 1 March, the BOG and the UC approved the estimates and the projected profit was reduced to $17.23 million. The difference was about $3 million-$4 million. I have a breakdown here but of course I can't set out all the details. In the past, we adopted the cash basis for calculation which is different from normal commercial depreciation. After we have introduced the depreciation formula and taken into account that some of the income does not belong to this financial year, but to the next financial year or the year after next perhaps, certain items cannot be included in this year's forecast. For example, we can't include the hire charges of the Executive Suites for three years as this year's income. They should be apportioned into 3 consecutive years' income. Eventually the projected profit is reduced to $8.83 million. The SCWC gave its blessing on this figure on 1 March 1994 since the BOG in the past did not have the experience of managing the Stadium, so if Members want to get more specific information about financial forecast, maybe we should wait until September when we have had 6 months' experience. Then we can take a further look at the financial aspects. Concerning the November 1993 forecast, it was only a guesstimate rather than estimate because we had to have some sort of figures for management, that's why that was a guesstimate. As for the Stadium Manager and its terms of reference, the appointment was really not determined by the BOG. The consultant, when making recommendations to the SCWC, set out the sphere of responsibility of the Manager and the relationship between the Manager and the UC. Having studied the details of the recommendation, 3 to 4 companies were shortlisted and interviewed. Through the collective wisdom of Members, a recommendation was made to the SCWC for the appointment of Wembley with such terms. A simple answer is that the present Stadium Manager is appointed to manage the Hong Kong Stadium. The reason for appointing Wembley is that since the company was not involved in programme productions, it could assess the hirers independently and fairly. That is one of the reasons why we
Page 31 of 115