XN000022-1987-08-07 — Page 4

FRIDAY, AUGUST 7, 1987

3

PRIVATISATION OF GOVERNMENT SERVICES

THE GOVERNMENT SHOULD NOT BE INVOLVED IN ACTIVITIES THAT COULD BE DONE BETTER IN THE PRIVATE SECTOR, THE FINANCIAL SECRETARY, MR PIERS JACOBS, SAID TODAY (FRIDAY).

ADDRESSING A LUNCHEON MEETING OF THE ROTARY CLUB KOWLOON NORTH ON THE SUBJECT OF PRIVATISATION, MR JACOBS SAID HE BELIEVED THAT AS MANY SERVICES AS POSSIBLE SHOULD BE LEFT LARGELY IN THE HANDS OF THE PRIVATE SECTOR SUBJECT, OF COURSE. TO QUESTIONS OF SECURITY AND VIABILITY.

MR JACOBS POINTED OUT THAT THE GOVERNMENT HAD A FIRM COMMITMENT IN DEVELOPING A COGENT POLICY IN PRIVATISATION.

"THIS IS ESSENTIAL BECAUSE IT SERVES ΤΟ IMPLEMENT OUR BROAD ECONOMIC OBJECTIVES OF ALLOWING THE PRIVATE SECTOR TO CARRY ON ITS ROLE, OF CONTAINING THE GROWTH OF THE PUBLIC SECTOR AND OF ENHANCING THE EXISTING LEVEL OF EFFICIENCY IN THE PROVISION OF SERVICES WITHIN THE USUAL CONSTRAINT OF LIMITED RESOURCES IN HONG KONG."

HOWEVER, MR JACOBS STRESSED THAT "THE HONG KONG GOVERNMENT IS NOT RUSHING OFF TO SELL THE FAMILY JEWELS IN THE RUN UP TO 1997".

"WE ARE MOVING FORWARD CAUTIOUSLY AND SURELY, AS IN THE PAST, IN ACHIEVING GREATER EFFICIENCY IN THE SERVICES THAT WE RENDER, HE SAID.

14

CATEGORIES,

OUTLINING THE GENERAL CONCEPT OF PRIVATISATION IN THREE BROAD

NAMELY

PRIVATISATION,

CORPORATISATION

AND COMMERCIALISATION, HE SAID "BY PRIVATISATION, WE MEAN THE TRANSFER OF A PUBLIC SECTOR OWNED ASSET ΤΟ TOTAL OR PARTIAL PRIVATE SECTOR OWNERSHIP"

"THE ADVANTAGES OF PRIVATISATION NORMALLY LIE IN THE SPEED IN WHICH DEVELOPMENTS CAN BE COMPLETED AND ALSO CONTRIBUTE ΤΟ THE INCREASE IN OVERALL OPERATING EFFICIENCY."

ON CORPORATISATION, MR JACOBS SAID IT WAS ONE STEP REMOVED FROM PRIVATISATION, WITH THE GOVERNMENT RETAINING THE FULL OWNERSHIP OF THE OPERATION.

OF

"NEVERTHELESS, WE STILL ACHIEVE THE SAME ADVANTAGES PRIVATISATION THROUGH THE ENACTMENT OF LEGISLATION TO TRANSFER ASSETS TO A SEPARATE PRIVATE ENTITY AND IN SO DOING, ΤΟ VEST THE DAY-TO-DAY FINANCIAL AND OPERATIONAL DECISIONS OUTSIDE CENTRAL GOVERNMENT, HE SAID, QUOTING THE MASS TRANSIT RAILWAY AND KOWLOON-CANTON RAILWAY CORPORATIONS AS EXAMPLES.

HE WENT ON TO SAY THAT EACH POSSIBILITY NEEDED A GREAT DEAL OF CAREFUL THOUGHT. OFTEN THERE WERE SERIOUS STAFFING IMPLICATIONS.

AND FINANCIAL

/NOTING THAT