TNAG-2325-FCO40-3369-Hong-Kong-Bill-of-Rights-policy-1991 — Page 103

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THE GOVERNMENT AND POLITICS OF HONG KONG

has been obliged to inject additional capital into the Corporation: HK$3,500 million was provided in 1981 and a further sum of HK$1,500 million in 1985. Members of the board of directors are appointed by government, three out of ten being officials. Otherwise none of the staff are civil servants.

The Industrial Estates Corporation was formed in 1977 to manage and lease out sites in the industrial estates at Tai Po and Yuen Long. The Corporation was set up to attract to Hong Kong firms using ad- vanced technology, and to provide land at cost price to firms which cannot operate in high-rise buildings and which might go elsewhere be- cause of the high rents charged by private landlords. Rents in the in- dustrial estates are fixed so as to cover only the cost of site formation and the necessary expenses of the Corporation. The Governor appoints the chairman of the Corporation and the eight other members of the board, which has an unofficial majority. Its expenditure is financed by a fixed-interest loan from government and by its revenue from rents.

The British section of the Kowloon-Canton Railway was built by government between 1905 and 1912 and was run as a government de- partment until 1983. It was then transformed into a statutory cor- poration to be operated as a commercial undertaking under a board of directors appointed by the government, on the same pattern as the Mass Transit Railway. All the civil servants working on the railway were retired from government service and were then immediately offered re-employment by the new Corporation. Three of the nine directors are government officials. At present the Corporation is entire ly owned by government. It made a small profit on its operations in 1987 after paying interest on a HK$1,000 million loan which repre- sented the nominal value of its assets in 1983. Government envisages that in future part of the equity of the Corporation might be sold off to private investors; if this happens, amending legislation will be needed to incorporate the railway under the Companies Ordinance."

Still further removed from direct government control are three public companies, formed partly as a result of a government initiative, and in which government owns part of the share capital. The first is the Build- ing and Loan Agency which makes mortgage finance available to prospective owner-occupiers at reasonable interest rates. Government now holds 19.7 per cent of the equity, with the rest being held by various banks and the general public. Government also owns 5 per cent of the equity of the Cross-Harbour Tunnel Company Limited and 10 per cent of the Hong Kong Air Cargo Terminals Limited. In all three cases it is unlikely that these enterprises would have been set in hand without gov ernment's financial participation. All three companies are profitable and dividends on the government's shares are paid into the general revenue. 10

Government gives subventions to a number of organizations set up by businesses which might not survive without government subsidy, such as the Hong Kong Shippers' Council, the Design and Packaging Coun-

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