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Following is a question by the Hon Vincent Fang and a verbal reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (July 2):
Question:
Twelve non-staple food trade associations have relayed to me that starting from 1 June this year, the Agriculture, Fisheries and Conservation Department (AFCD) has substantially increased the rentals for stalls in its Cheung Sha Wan and Western Wholesale Food Markets by 11.42%. The trade associations have alleged that AFCD has not only failed to honour the undertaking it made when relocating the traders to these markets that future rentals would be adjusted with reference to the Consumer Price Index (A), but has also taken the lead in pushing up food prices. AFCD explained to the traders that as the costs for the outsourced cleaning and security services of these markets had increased, the rentals had to be raised according to "the user pays" principle. In this connection, will the Government inform this Council:
(a) of the rates of adjustment made to rentals for stalls this year for the four wholesale food markets under the Food and Health Bureau ("FHB"); whether these wholesale markets raised their rentals at the same time and at the same rate; and of the numbers of cleaning and security staff of these wholesale markets as well as the changes in their salaries in the past three years;
(b) of the reasons for outsourcing the cleaning and security work of the above wholesale markets and the costs of outsourcing involved; whether the contracts concerned have stipulated the salary levels of the staff concerned; whether the cleaning and security work of public markets, which are also under FHB's purview and are managed by the Food and Environmental Hygiene Department, has been outsourced; if not, of the reasons for that, and how the costs for the cleaning and security work of such markets compare with the above outsourcing costs of the wholesale markets; and
(c) of the occupancy rate of the stalls at the above wholesale markets and the number of entrants in the past three years; among these entrants, the respective numbers of traders engaged in non-staple food wholesaling and processing at the markets and customers entering the markets to make their purchases; and whether FHB has new plans to further attract more retailers to make their purchases at the markets?
Reply:
Madam President,
The Agriculture, Fisheries and Conservation Department (AFCD) manages four wholesale food markets. Given their different backgrounds, the markets operate under different rent adjustment mechanisms.
The management of the North District Temporary Wholesale Market for Agriculture Products has been outsourced to a private company. Since the Market derives its income from sales commission rather than rental charges on stalls, the issue of rental adjustment does not arise. Rental charges at the Cheung Sha Wan Temporary Wholesale Poultry Market were also determined with reference to the cost recovery principle in its early years. In light of the temporary nature of the Market, and that the Market has been in use for over twenty years, the Market rental is now determined with reference to the Consumer Price Index (A) (CPI(A)) starting from 1998/99. According to the change in CPI(A) in 2007, this Market's rental for 2008/09 should increase by 1.3%.
As for the Western and Cheung Sha Wan Wholesale Food Markets, these Markets have always determined their rentals with reference to the cost recovery principle since 1994. Costing review is conducted biennially.
The new round of costing review in 2008 shows that the management costs for the Western and Cheung Sha Wan Wholesale Food Markets have increased, particularly in respect of the hiring of cleansing and security services. For instance, salary of security staff increased by about 30% over the past two years, whilst that of supervisory cleansing and security staff increased from 50 to 70%. As such, AFCD has concluded that rentals at the two markets should increase by 11.42% to tie in with the rise in management costs. Moreover, we note that 68% of the tenants would be facing an actual increase of less than $800. In response to tenants' comments, the costing review has excluded costs for implementing measures relevant to improving public order and public health (including implementing the Market Entry Registration System, crow control, and enhance inspection of imported freshwater fish).
The number and salary of cleansing and security staff at the two Markets over the past three years is at Annex A.
Through outsourcing the cleansing and security services for wholesale food markets, AFCD hopes to provide quality service to tenants through private companies. In 2008/09, the Western and Cheung Sha Wan Wholesale Food Markets have spent about $ 1.4 million in hiring cleansing and security services.
In light of Government internal requirements, all invitations for tender specify that non-skill workers must be paid a salary that is not lower than the average monthly salary of relevant trades as publicised by the Census and Statistics Department at the time of the tender. Thus, tender submissions by the contractors set out employees' salaries for the Government's consideration. The information provided to Members above is also sourced from these documents.
In relation to public markets, the cleansing and security work at most public markets managed by the Food and Environmental Hygiene Department have been outsourced to contractors. As the scale and operation of public markets and wholesale food markets are different (e.g. in terms of size of the markets and stalls, and throughput), it is difficult to compare the expenditure of public markets and wholesale food markets on outsourcing directly.
The occupancy rate of the stalls, the number of traders, and the number of entrants of the Western and Cheung Sha Wan Wholesale Food Markets over the past three years are detailed at Annex B. In general, the number of traders at Cheung Sha Wan and Western Wholesale Food Markets has not changed significantly, and the occupancy rate remained at about 90%. AFCD does not have statistics on the number of customers entering the markets to make their purchases, though it is believed that most of the entrants are such customers.
AFCD has been paying close attention to the occupancy situation at the Markets. To further improve the utilisation rate, AFCD has been publicising stall vacancies through the department's homepage, and has also introduced greater flexibility for the use of the market facilities (e.g. vacant egg stalls may be used to wholesale canned foods and kitchen utensils). We believe the above measures would help improve the diversity at the Wholesale Food Markets, and attract more retailers to make their purchases at the Wholesale Markets. AFCD is also working with other government departments and relevant agencies on how to better the utilisation of the vacant facilities at the Wholesale Food Markets.
Thank you, Madam President.
Ends/Wednesday, July 2, 2008
Issued at HKT 14:41
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