Replies to LegCo questions

LCQ10: Arrangements for auctioning market stalls

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Following is a question by the Hon Frederick Fung and a written reply by the Secretary for Health, Welfare and Food, Dr York Chow, in the Legislative Council today (April 27):


Question:


In its Investigation Report on Letting of Market Stalls by Auction released on April 7 this year, the Office of The Ombudsman pointed out that some tenants had taken advantage of the loopholes in the arrangements for letting stalls, by outbidding competitors in auctions to secure nearby stalls and then terminated the tenancy prematurely, with the intention of reducing competition. In this connection, will the Government inform this Council:


(a) of the number of such cases in the markets managed by the Food and Environmental Hygiene Department (FEHD);


(b) whether it has received any complaints about the above phenomenon; if so, of the number of such complaints, and the reasons for not taking any measures at that time to plug such loopholes;


(c) how FEHD will specifically implement the recommendations made by the Office of The Ombudsman on the arrangements for auctioning market stalls; and


(d) whether it has investigated if the facilities managed by other government departments and their auctioning arrangements have similar problems; if it has, of the investigation results, and the measures in place to deal with such problems; if it has not, the reasons for that?


Reply:


Madam President,


(a) Under the existing policy, itinerant hawker licence (IHL) holders are given priority to choose and rent market stalls that fall vacant under the management of the Food and Environmental Hygiene Department (FEHD). This process delays the release of the vacant stalls for open auction. According to the findings of the Ombudsman, since 2001, three bidders have been suspected of trying to take advantage of this arrangement for the purpose of reducing competition to their business.


(b) FEHD has not received any additional complaints similar to the one lodged with the Ombudsman.


(c) FEHD has accepted in principle the recommendations of the Ombudsman and will undertake follow-up action. Measures to improve the auction arrangement include the following -


(i) From April 2005 onwards, the process to allow IHL holders priority to rent market stalls that fall vacant will be completed within the first six weeks of each quarter so that those vacant stalls that are not selected by IHL holders will be put up for open auction within the shortest possible time. In addition to the above, newly vacated stalls that had been offered for selection by IHL holders in the past 12 months will be released directly for open auction.


(ii) Starting from May 2005, FEHD will stipulate a clause in all new tenancy agreements, requiring the payment of three months' rent in total in cases where the tenancy is terminated within the first three months period.


(iii) From May 2005, a successful bidder who rents the same stall twice within 12 months for a period of three months or less each time will be blacklisted and prohibited from bidding any stall in the same market for a period of 12 months from the date of termination of the second tenancy.


FEHD will closely monitor the effectiveness of these improvement measures.


(d) According to the result of our survey with all bureaux, the facilities managed by other government departments and their auctioning arrangements do not have similar problems.



Ends/Wednesday, April 27, 2005

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12 Apr 2019