1994 — Page 58

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HONG KONG URBAN COUNCIL

HONG KONG URBAN COUNCIL

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ADDRESS BY CHAIRMAN

CHAIRMAN (in English):-Ladies and Gentlemen, may I call the meeting to order. Before taking the first item on the agenda, I would like to ask all Members to stand in silence for one minute in remembrance of a former Member of the Urban Council, Mr. Walter SULKE, who passed away on the 5 October 1994.

MINUTES

The minutes of meeting held on 13 September 1994 were confirmed.

PAPERS

The following paper was laid on the table:

Report to the Urban Council by the Secretary, Urban Council, for the month of September 1994.

QUESTIONS

(1) MR. JOSEPH CHAN YUEK-SUT asked the following question (in Cantonese):- What is the current financial situation of the Hong Kong Stadium? What are the sources of its monthly revenue? Please provide information on its monthly income and expenditure. Is there any deficit and, if so, how much is the monthly deficit? How much funds are still available to meet the deficit and for how long can such funds last? If funds run out, what are the remedial measures to cover the deficit?

MR. STEPHEN Lau Man-Lung, Member of HONG KONG Stadium—Board OF GOVERNORS, replied as follows (in English):-Mr. Chairman, the financial position of the Hong Kong Stadium, monthly and cumulative, is shown in the Stadium's trading account. This account is included as an appendix to the Stadium's monthly report which is presented to the Standing Comittee of the Whole Council each month. This report clearly shows the monthly sources of revenue and expenditure. The last report, dated 1 September 1994 considered by the SCWC on 20 September 1994 vide Committee Paper CW/124/94, shows a cumulative surplus for the Stadium of $8.96 million in the five-month period from 1 March 1994 to 31 July 1994.

The sources of revenue of the Stadium include rental charges for the use of the Stadium, commissions from catering and sale of merchandize products, rental of Executive Suites, income from fixed and temporary advertising and sundry income such as hire of Stadium's equipment and location filming. Monthly surpluses or deficits depend on the level of Stadium event activity and attendance during each particular month.

While there is a trading surplus of $8.96 million for the period from 1 March 1994 to 31 July 1994, it is not envisaged that the Stadium would generate any material profit during the current financial year ending 31 March 1995 in view of the anticipated closure of the Stadium for 10-12 weeks in the next few months to

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allow the rebuilding of the turf and the drainage system. During the closure period there will be no event-related revenue for the Stadium while expenditure on staff salaries and overheads will need to be met.

The Board of Governors will monitor the Stadium's financial position closely in the next few months. At this stage no one can predict with any degree of certainty as to what the Stadium's financial situation will become by the end of the current financial year.

MR. JOSEPH CHAN YUEK-SUT (in Cantonese): Mr. Chairman, during the rebuilding of the turf of the Stadium, the Urban Council would not have any revenue for the 3-4 months concenred. Now we have a surplus of $8.96 million. Are we confident that we have enough funds to cope with the expenditure in the few months ahead without any income? Although we are not in a position to predict the future financial position of the Council, should not the Board of Governors attempt to project the future income and expenditure? When will our surplus be used up and when the time comes, how are we going to pay for the deficits?

MR. STEPHEN LAU MAN-LUNG (in Cantonese):—Mr. Chairman, I believe Members are aware that the Board of Governors has recently set up an expert working group to examine the details during the period of re-turfing. Up to this moment the working group has not come up with a detailed re-turfing schedule. The preliminary estimate is 10-12 weeks. Within this period, the re-turfing may be done in phases so as to allow some major events to take place in the Stadium. If such an arrangement is made, then our financial burden will be lessened. We hope to do this as far as practicable. From the financial report, we are able to see that in the last six months, the monthly expenditure was around $2.5 million. As regards actual income, there was almost $2 million. So the expenditure is not expected to exceed the surpluses that we have so far accumulated. We all know that several major events such as the Lunar New Year Soccer Match, the Rugby Sevens and so forth will be organised within this financial year. So I don't anticipate any deficits for this financial year. Now we are in the stage of preparing the budget for the next financial year. I believe the Board of Governors will follow the earlier decision of this Council that the Stadium is submitted to this Council for approval, Members will have an opportunity to study in detail where revenues should be generated so as to avoid having a deficit next year.

MR. JOSEPH CHAN YUEK-SUT (in Cantonese):-Mr. Chairman, I may be slow to understand the reply. Mr. LAU said that there would be a monthly expenditure of $2.5 million, and then during the closure period we would still be generating a monthly income of $2 million. So where does this $2 million come from during the closure of the Stadium? Mr. Chairman, given an average monthly expenditure of $2.5 million and that the Stadium will be closed for four months, the total expenditure should be $10 million. So how are we going to cover that expenditure? We must not pass the buck onto the next term of the UC, otherwise it will not be fair to the public. Mr. Chairman, should we not the responsibility?

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