Replies to LegCo questions
LCQ10: Arrangements for auctioning market stalls
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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