XN000022-1995-10-25 — Page 11

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Port Control Regulation

Following is the speech by the acting Secretary for Economic Services, Mr Leo Kwan, in the motion debate on Port Control (Cargo Working Areas) (Amendment) Regulation 1995 in the Legislative Council today (Wednesday):

Mr President,

I would like to explain the rationale of our proposed increases for the Public Cargo Working Areas (PCWA) charges.

PCWAS provide important facilities for handling cargo from ocal craft and other small vessels. They are provided and supervised by the Government; all cargo handling is carried out by commercial, profit making operators. The fees at present charged by the Marine Department do not cover the Government's costs which include the cost of capital investment. The operations are therefore subsidised by taxpayers. There is no reason to continue the public subsidy for these facilities. Following our user pays principle, what we are seeking to achieve by the proposed fee increases is full cost recovery, including both operating costs and cost of capital, on a phased basis spread over three years. That is to say, we are proposing to continue to subsidise these services but on a reducing basis so that we achieve full cost recovery in 3 years time.

Against that background, some Members will recall that when we last revised fees for the use of our PCWAs in 1994, we specifically excluded any revision to the system of land costs at the request of this Council's Economic Services Panel. This was to enable us to consider Members' views that we were seeking to recover current commercial land rentals, when taking historical costs as assets might be more appropriate.

The present fee exercise has examined the issue of land costs - it concludes that Members had, indeed, a good and valid point. Our new fee proposal agrees not only that historical land costs are more appropriate, but, given that they will have implications for the commercial sector's budgeting, that they should be phased in over three full years. Our aim is to eliminate taxpayers' subsidy to commercial port operators in stages by 1997. In the circumstances, we believe that this is a reasonable proposition.