HONG KONG URBAN COUNCIL
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For the cash deficit in respect of the Stadium, we can consider listing it separately so that the Stadium accounts can be shown more clearly for the reference of the public. No problem about it.
The second question concerns the Capital Projects Reserve Fund which has stood at $280 million for many years. In fact there were cases of overspending and surplus for capital projects and a balance had to be struck to maintain the Fund at the level of $280 million. If Miss WONG feels there is need to utilize that sum, I will raise it at the forthcoming Finance Select Committee meeting for an in-depth study.
The third question concerns ways to effectively utilize the reserves and reap investment benefits without engaging in speculative activities. The Finance Investment Panel of the Finance Select Committee will certainly consider Miss WONG's proposal, but to minimize risk and bearing in mind that the reserve is public money, we must conduct a detailed study of other options besides that of generating interest from bank deposits. With the approval of the Financial Secretary for investing in other funds, I think we must consider such a feasibility cautiously. If it is found feasible, then I don't see why the Finance Select Committee of the Urban Council will not agree.
MR. CHRISTOPHER CHUNG SHU-KUN (in Cantonese): I think the safest method we are at present resorting to means depreciation. For more than ten years, inflation rate has been higher than bank interest rates. If it has not been like that, we would not have so many banks set up. Am I right, Mr. Chairman? This 'drying up' situation year after year is a losing battle. I agree with Miss Wong that we should think of other ways to maintain real value of our reserve. All in all, depositing our reserve with banks is not really risk-free. Take the example of the Bank of Credit and Commerce case, we lost heavily there. The reserve of the Urban Council is huge and we need some experts to study ways to keep the real value. Maybe they can earn back their own cost so that the Council will not suffer. We need to consider changes. If the reserve is simply deposited with banks, what do we need staff for? Any Tom, Dick or Harry can do it. We definitely lose out by simply making deposits with banks. I think it is not worthwhile to let such a huge sum depreciate. We should diversify the use of our reserve on the safe side. Even if there is depreciation, I hope it can be kept to the minimum.
Chairman (in Cantonese): This is not a question, but ..........
Mr. Christopher Chung Shu-KUN (in Cantonese): It is a question. The question asks whether you will consider?
Chairman (in Cantonese): 'Whether you will consider' should be in the form of a question.
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