XN000022-1991-11-13 — Page 2

1

WEDNESDAY, NOVEMBER 13, 1991

SPEECH OF FS ON SCHEME OF CONTROL DEBATE

MR DEPUTY PRESIDENT,

I AM IN SYMPATHY WITH THE AIMS BEHIND BOTH OF THESE MOTIONS. I BELIEVE IT IS COMMON GROUND THAT WHEREVER POSSIBLE COMPETITION SHOULD I PREVAIL AND THAT THROUGH COMPETITION FAIR PRICES WOULD BE OBTAINED. THINK IT IS ALSO COMMON GROUND THAT FOR SOME SERVICES OR FACILITIES, HONG KONG HAS FOUND FRANCHISES A MOST SUCCESSFUL SOLUTION.

FRANCHISES ARE APPROPRIATE WHERE THE LEVEL OF INVESTMENT REQUIRED OR OTHER FACTORS INDICATED THAT FREE COMPETITION MAY NOT OBTAINABLE OR MAY NOT BE THE BEST SOLUTION.

BE

IN MANY OTHER PLACES OUTSIDE HONG KONG, GOVERNMENT ITSELF PROVIDES SUCH SERVICES. IN HONG KONG BY CONTRAST WE HAVE MANAGED THROUGH FRANCHISES TO OBTAIN A REASONABLE COMPROMISE BETWEEN, ON THE

ONE

THE A MONOPOLY OR A SEMI-MONOPOLY SITUATION AND ON

OTHER HAND, SOME OF THE BENEFITS OF COMPETITION AND THE COMMERCIAL APPROACH.

HAND,

IT IS ENTIRELY REASONABLE TO ASK AS BOTH MOTIONS EFFECTIVELY DO

BE STEPS

TAKEN TO ENSURE THAT WHERE

EXIST FRANCHISES

AND COMPETITION IS LESS THAN FREE, PRICES ARE REASONABLE. THAT'S THAT UNDUE ADVANTAGES NOT TAKEN OF ANY QUASI-MONOPOLY AND TO ENSURE THAT THE SERVICE IS SATISFACTORY.

BUT THAT SAY,

ΤΟ

SITUATION

AS IT HAS BEEN POINTED OUT, A CONSIDERABLE ARRANGEMENTS

SCHEMES EXIST, FRANCHISES DO NOT NECESSARILY INVOLVE CONTROL. NOR DID SCHEMES OF CONTROL NECESSARILY THE COMPANY FRANCHISES AND SO ON.

DIVERSITY

OF

OF

BE

THE

BROUGHT THE

SHOULD QUESTION THEN IS HOW MUCH FURTHER INTERVENTION

WHERE TO BEAR BY EITHER LEGCO OR THE PUBLIC OR BOTH. THIS IS

BETWEEN DISTINCTION

THE TAKING ACCOUNT OF PUBLIC OPINION, AMENDMENT AND CONSULTATION, THE ORIGINAL MOTION ON FRANCHISES AND SCHEMES OF CONTROL REALLY COMES IN.

I AGREE WITH MR SZETO WAH THAT THERE IS A SIGNIFICANT DIFFERENCE BETWEEN THE TWO. GIVEN THE COMPLEXITY OF THESE FRANCHISE

AND ARRANGEMENTS

THE GIVEN THE COMMERCIAL SECRECY OF MANY OF

FACTS INVOLVED, A FORMAL REQUIREMENT TO DETAIL CONSULTATION DOES NOT SEEM TO ME A PRACTICAL OR SENSIBLE PROPOSITION. BUT TAKEN INTO ACCOUNT VIEWS

REASONABLE OF THIS COUNCIL AND THE PUBLIC, IT IS ENTIRELY INDEED DESIRABLE.

H

I WOULD NOT REPEAT THE MANY COGENT ARGUMENTS PUT MEMBERS EARLIER IN THIS DEBATE AS TO WHY THE "TAKING INTO FORMULA IS MORE PRACTICAL. AS IN CONCLUSION I WOULD LIKE TO WHAT IS AT STAKE HERE.

THE

AND

BY SOME ACCOUNT" HIGHLIGHT

PRIVATE INVESTMENT IN THE PUBLIC UTILITIES AND TRANSPORT COMPANIES IS MASSIVE.

HER THE SECRETARY FOR ECONOMIC SERVICES IN SPEECH MENTIONED THAT ACTUAL AND PLANNED INVESTMENT BY CHINA LIGHT AND POWER COMPANY ALONE IS IN THE REGION OF $55 BILLION OR CONSIDERABLY MORE THAN THE NEW CHEK LAP KOK AIRPORT.

/INVESTORS ARE

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