11
WEDNESDAY, APRIL 20, 1986
RIGHT APPROACH TAKEN IN PRIVATISATION
*****
THE GOVERNMENT SHOULD NOT BE INVOLVED IN ACTIVITIES THAT CAN ARGUABLY BE DONE BETTER IN THE PRIVATE SECTOR, THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
REPLYING TO A QUESTION BY THE HON LEE YU-TAI, SIR JOHN SAID EXAMPLES OF THIS APPROACH COULD BE SEEN IN THE TUEN MUN LIGHT RAIL SYSTEM, THE EASTERN HARBOUR CROSSING, THE HONG KONG NUCLEAR INVESTMENT COMPANY AND EXISTING SERVICES SUCH AS CARPARKS.
NEVERTHELESS, HE SAID, THE PERCEIVED ADVANTAGES OF PRIVATISATION HAD TO BE BALANCED AGAINST THE MORALE OF THE CIVIL SERVICE AND THE CONSIDERABLE COSTS OF DISESTABLISHMENT.
IN THIS CONTEXT, SIR JOHN SAID A PRAGMATIC RATHER THAN A THEORETICAL JUDGEMENT WAS ESSENTIAL AND THAT WAS ALWAYS GIVEN BY THE EXECUTIVE COUNCIL.
+GIVEN OUR VERY SUCCESSFUL VALUE FOR MONEY STUDIES PLUS THE NEED TO CONSTRAIN THE GROWTH OF THE CIVIL SERVICE, ONE FRUITFUL AVENUE WILL BE THE CONTRACTING OUT OF SERVICES,+ HE SAID.
SIR JOHN STRESSED THAT THERE COULD HOWEVER BE NO PRIVATISATION WITHOUT PROSPECT OF PROFIT ON CHARGES THAT WERE REASONABLE.
+THUS THE NEW JUNK BAY ROAD TUNNEL MUST BE BUILT BY THE GOVERNMENT AND ONLY THE MANAGEMENT MIGHT LATER BE TURNED OVER TO THE PRIVATE SECTOR, HE ADDED.
REFERRING TO THE CONVERSION OF THE KOWLOON CANTON RAILWAY INTO A STATUTORY CORPORATION, HE SAID IT HAD BEEN AN UNDOUBTED SUCCESS.
SIR JOHN NOTED THAT THE OPERATING PROFIT BEFORE DEPRECIATION AND INTEREST CHARGES HAD INCREASED 11.2 TIMES FROM $21 MILLION IN 1983 TO $237 MILLION IN 1985, AND THE CORPORATION HAD REPAID THE $1 BILLION GOVERNMENT LOAN.
HE FURTHER POINTED OUT THAT THE VERY LARGE INVESTMENT MADE BY THE GOVERNMENT IN THE MODERNISATION AND ELECTRIFICATION OF THE RAILWAY WAS CLEARLY A MAJOR FACTOR IN ITS SUCCESS.
IN ADDITION, SIR JOHN SAID THE RAILWAY MUST BE RUN IN ACCORDANCE WITH COMMERCIAL PRINCIPLES WHILE OPERATING IN A COMPETITIVE ENVIRONMENT.
+AS A STATUTORY CORPORATION, THE KCRC HAD BEEN ABLE TO RESPOND QUICKLY TO MARKET CONDITIONS AND ENJOYS FAR GREATER FLEXIBILITY THAN ANY GOVERNMENT DEPARTMENT IN MAKING COMMERCIAL DECISION, IN MARKETING ITS SERVICES AND IN PLANNING AND IMPLEMENTING ITS FUTURE DEVELOPMENT, HE ADDED.
/12