XN000022-1995-06-01 — Page 27

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The Bill also proposes that government rent will payable directly to the Government by the sub-lessees whose sub-leases are renewed under the Bill.

From July 1, 1997, the government rent will be set at three per cent of the rateable value of the property as provided in Annex III to the Joint Declaration.

Certain sub-leases are excluded from the renewal and payment of government rent provisions. These are sub-leases which have been granted or renewed for terms extending beyond November 9 last year and under which the Tong and the sub-lessee have agreed on the amount of rent payable to the Tong after June 30, 1997.

These sub-leases are excluded because the Government does not see the need to interfere with private contracts freely entered into.

In addition, the Bill proposes that the Director of Lands may approve applications from sub-lessees for modifications and exchanges of the sub-leased land.

Unless the Tong puts forward valid grounds of objection, it will be deemed to have agreed to the application and will be entitled to charge sub-lessees an amount equal to 10 per cent of the premium payable to the Government in respect of the modifications and exchanges.

If the Bill is enacted, sub-lessees will have certainty as to their sub-leases through to June 27, 2047. They will pay government rent direct to the Government.

The Tong will not be able to delay development proposals requiring modifications and exchanges. As a result, the source of much of the friction between the sub- lessees and the Tong should be removed.

A Government spokesman said: "The Bill provides an objective, practical and fair solution to the disputes between the Tong and its sub-lessees. It will be introduced to the Legislative Council on June 7, 1995."

End/Thursday, June 1, 1995