ENG-2001 — Page 111

THE ECONOMY

Government Rent Roll as at March 31, 2001. The total government rent collected in 2000-01 was $4.2 billion.

The Government derives significant amounts of revenue from other sources. Fees and charges for services provided by government departments generated about $11 billion, or about 5 per cent of total revenue, in 2000-01. It is government policy that fees should in general be set at levels sufficient to recover the full cost of providing the services. Certain essential services are, however, subsidised by the Government or provided free of charge. The Government has frozen most government fees and charges since February 1998 as an exceptional measure to ease the burden on the community at a time of economic setback. In view of a better economy in 2000, the Government revised some of the government fees and charges that do not affect people's livelihood or general business activities. A further $3.3 billion was generated by government-operated public utilities, accounting for about 1 per cent of the total revenue. The most important of these, in revenue terms, is water charges.

Also, in 2000-01, the Government collected $23.5 billion, amounting to about 10.5 per cent of the total government revenue, from investments and interest income on the fiscal reserves.

Lastly, some $29.5 billion, or about 13 per cent of the total revenue in 2000-01, was generated from land transactions. All revenue from land transactions is credited to the Capital Works Reserve Fund to help finance the Public Works Programme.

Government Supplies Department

Purchases of goods and related services required by government departments are undertaken centrally by the Government Supplies Department, which provides similar services to certain non-government organisations, such as the Hospital Authority and the Vocational Training Council. These goods and related services are normally obtained by competitive tendering, without giving preference to any particular source of supply, to ensure that users' needs are met at the best possible price, having regard to life-time cost and reliability of supply. Helping users to derive the best value in their purchases, the department formulates a specific strategy for each type of purchase based on market conditions, focusing on meeting requirements for high-value and critical items by cost-effective and reliable means.

Public tender procedures are widely used for general and common items. As a means to save administrative costs, invitations to tender or quote for low value purchases are normally confined to registered suppliers. Restricted or single tender procedures are used where open competitive tendering would not be an effective means such as in cases involving compatibility with existing equipment, or patented/proprietary items, or unforeseen urgency. For complex and critical purchases, suppliers may be required to undergo a qualification exercise before tendering to ensure that they are capable in terms of financial and technical standing and reliability in performance.

Tender invitations are published in the Government of the Hong Kong Special Administrative Region Gazette and four local newspapers and are mailed to suppliers registered with the department. Consulates and overseas trade commissions are also informed. To allow easy access by suppliers outside Hong Kong, the department also includes its tender invitations and related information on the Internet. As a further enhancement of services, an Electronic Tendering System was introduced in April

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