XN000022-1997-02-19 — Page 29

(a)

(b)

(c)

(d)

- 13 -

should the University decide to secure a bank loan for the project, it may not assign any interest in the site and the superstructure for the loan;

the University should be responsible for repaying the loan, but may not do so using the public funds which the University receives from the UGC or Government;

the University may not charge the recurrent costs of the residential halls to the recurrent block grants provided by the UGC to the University; and

in accordance with the UGC Notes on Procedures, the University has to submit sketch plans and other documents relating to the building design and finishes of the project to the UGC for information and comment.

The UGC subsequently received an assurance from HKUST that it accepted these conditions. A bank loan of $250 million was then raised and the proposal implemented. The practice and procedures followed in this case were in line with other capital projects financed from private sources by other UGC-funded institutions.

Student hostels in the UGC-funded institutions, whether they are constructed by means of public funds or private funds, have to operate on a self-financing basis, through rent charged to students. The level of rent is determined by the institutions themselves. In the case of the research postgraduate residential halls at HKUST, the level of rent is set by the University having regard to both the loan repayment schedule and operating costs.

How rent should be collected from students is for the institutions themselves to determine. In this case, HKUST, which on academic grounds, wishes to encourage students to live on campus, arranges, for the sake of administrative simplicity and with students' agreement, for the amount of rent to be deducted from the studentship received by each postgraduate student who occupies a residential hall unit. For students who choose not to occupy a hostel unit, they will still be eligible for studentship. The number and amount of studentships awarded by the institutions may vary according to different circumstances taking into account academic objectives and the availability of resources. But these are matters within the autonomy of institutions.

End