1974 — Page 111

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HONG KONG URBAN COUNCIL

MINUTES

The minutes of the meeting held on 12th November, 1974 were confirmed.

STATEMENT BY CHAIRMAN

CHAIRMAN (in English):--Six months ago a policy statement was made in this Council suggesting to the Government that we would be prepared to advance money to pay for certain minor projects. The aim was to make such amenities available to the public at an early date as the Government was then in the process of re-phasing their public works programme for financial reasons and there was cause to believe Council building projects would be sacrificed in consequence. Under- standably, because of the great number of projects and the heavy cost of the Government's commitments at a time of steeply rising costs coupled with economic uncertainty, there arose the need for them to examine closely this vast programme in the light of Hong Kong's ability to pay not only for the capital works but for staff costs and other con- comitant requirements as well. In the circumstances, as the Council was in a surplus cash position, just as it is now though perhaps not for long unless its revenue increases substantially, it seemed fair and logical to make such a proposal then. In this way, for the public good, the Council offered to contract for the payment in advance of the cost of providing civic amenities which would otherwise have been put off for a good number of years as they would, in the normal course of events, have taken their place in competition for public funds with other pro- jects put forward by government departments and public institutions. Hence, our "switch-finance" offer to the Government.

It entailed by its very nature the acceptance by the Government of a clearly identified counterpart obligation in each exercise. This re- ciprocal arrangement ought to be defined not only in terms of money but also as to the time it would take the Government to complete related or other projects selected for exchange. Since the Government could not agree to the payment of interest on the actual sums the Council would spend, calculated until the time each counterpart pro- ject was completed, it became even more important to determine precisely the time the Government would take to fulfil its part of the arrangement. While the Council has since taken the initiative to put into practice this "switch-finance" scheme to show our goodwill, we have still to conclude negotiations and to agree with the Government on the target date for the carrying out of the other side of the arrange- ment in each case, but we hope to do so before long as their proposal has now been received and is under consideration.

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In the interval, as there are many major projects of consequence to the people of Hong Kong which the Government does not seem likely to build in the near future, because of its other heavy capital under- takings, there is good reason for the Council to examine the whole position once again to determine the extent this probability affects our work and inhibits the realization of our plans. Otherwise, the people would be deprived of the enjoyment of many major schemes we have proposed in the interest of Hong Kong as they would not be built for a decade or even much more, and a few perhaps not until the turn of the century, as we have been led to believe.

It seems to me then that it would be only reasonable and practical for the Council to suggest to the Government that we would be pre- pared to accept total responsibility for all the projects that the Govern- ment promised to complete for the Council at the time we were given financial autonomy and a new way of life on 1st April, 1973. More- over, in the Memorandum of Administrative Arrangements signed between the Government and the Council, there are several categories of capital works the Government undertook to continue paying for even after that date. Both the backlog, still numbering about 58, and more so the major building projects the Council is planning, also falling under the Government's responsibility according to the Memorandum, entail a very long delay before it can be expected that they will all be com- pleted; indeed, it is worth repeating that in some important cases such delay would run into the next two decades by present calculations of the Government's ability to pay for them in conjunction with their many other commitments. Therefore, I suggest, for the Government's consideration, that our Council would be willing to accept full responsi- bility for all outstanding projects on the present list and would be prepared to take over all their continuing contractual obligations under the categories of public projects set out in the Memorandum. In other words, the Government would be absolved henceforth from any obliga- tion to the Council for any building and equipment whatsoever.

In consideration, the Council would be given the remaining 9% now retained by the Government, which, together with the Council's present share of 6%, makes up the 15% rates collected in the urban areas. Obviously, more money must be found for the Council; other- wise, we would not be able to discharge these exceedingly heavy com- mitments nor would it be wise and businesslike of us to make such a bold offer. Still, on our side, the Council would have full control over its financial policy. Council would have to commit its funds very carefully and to programme all projects intelligently. Not only would we then have to cover our recurrent expenditure just as we are now