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Following is a question by the Hon Vincent Fang and a reply by the Acting Secretary for Food and Health, Professor Gabriel Leung, in the Legislative Council today (May 11):
Question:
Public markets of the Government were subject to criticisms by the Audit Commission because of problems such as long-term financial losses and low occupancy rates. In this regard, the Food and Health Bureau has proposed a number of improvement measures, including progressively increasing market stall rentals to "actual average rental" or "open market rental" and introducing service trade stalls at public markets with low occupancy rates. With regard to the aforesaid measures, will the Government inform this Council:
(a) of the criteria for determining the rentals of public market stalls by the Government; whether it has taken into account the function of public markets to provide services to the general public, as well as other factors such as whether the services provided to the tenants are inferior to those provided by private markets;
(b) whether the authorities have assessed if the introduction of service trade stalls (including beauty care, manicure, postnatal care-taking, travel agent, real estate and financial services, etc.) at public markets will turn public markets into commercial premises; whether such practice violates the land use restrictions of the land granted for the construction of public markets, and whether it is not consistent with the function of public markets; and
(c) of the number of auctions held by the Food and Environmental Hygiene Department for the introduction of service trades; the results of such auctions (with a breakdown by the type of service trades, the number of stalls successfully let out through such auctions, and the level of rentals); how the rentals of such stalls compare to the highest and lowest rentals of other stalls at the same market; and when working out the "actual average rental" of stalls, whether the Government will make reference to or take into account in the calculation the level of rentals of service trade stalls at the same market?
Reply:
President,
Public markets serve important social functions in that they are major sources of fresh provisions for the public at large and provide employment opportunities for the grassroots. Over the years, the Food and Environmental Hygiene Department (FEHD) has been committed to formulating and implementing various measures to enhance the business environment and competitiveness of public markets. Such measures include:
(i) with effect from February 2009, we have lowered the upset auction prices to 80% and 60% of the open market rental (OMR) for stalls left vacant for six months and eight months or more respectively in order to boost the occupancy rate of public markets. As at end of March this year, a total of 1,561 stalls had been let out through this arrangement;
(ii) starting from July 2009, we have been gradually introducing service trades, light refreshment and bakery stalls with a view to diversifying public market services. Furthermore, starting from October 2010, we have let out small stalls through short-term tenancy on a trial basis to allow more flexibility for prospective tenants. The two measures mentioned above were reported in the Government Minute submitted on May 20, 2009 in response to the relevant report of the Public Accounts Committee as well as the paper issued to the Legislative Council Panel on Food Safety and Environmental Hygiene for discussion on December 14, 2010;
(iii) besides, we have carried out regular maintenance and improvement works in public markets. The scope of works includes improvement to the drainage, ventilation, lighting and fire services provisions, and replacement of wall and ceiling finishes and floor tiles. Over the past three years, the FEHD spent over $230 million on the improvement projects;
(iv) we have installed in each cooked food centre a signboard listing all its stalls to facilitate the public in making their choices, and retrofitting public address systems in some public markets;
(v) we continue to organise promotional activities (including celebratory activities for traditional festivals e.g. Lunar New Year and Mid-Autumn Festival, talks on seasonal soup and dietetic therapy, and cooking demonstrations) from time to time to attract and broaden patronage; and install in each public market a board to display the weekly "Recipes of Chef's Daily Recommendation" to attract more people to shop in public markets; and
(vi) we published a well-illustrated booklet in ten different languages in mid-2010, listing over 500 common food items, goods and service trades available in public markets to facilitate and encourage patronage of public markets by members of various ethnic groups.
Currently, the overall occupancy rate of FEHD's public market stalls stands at 85%.
In order to regularise the status of public market stall operators, the FEHD introduced in mid-2010 the "one-off tenancy transfer scheme" and adopted the "actual average rental" as the rental to be paid by successful transferees under the scheme. If there are more than ten stalls of the same category in a market, one each of the highest and lowest rental-paying stalls will be excluded from the calculation of the actual average rental, lest it is unduly affected by an exceptionally high or low rental of a single stall. The adoption of "actual average rental" in the "one-off tenancy transfer scheme" was supported by Legislative Council Panel on Food Safety and Environmental Hygiene. My reply to various parts of the question is set out as follows:
(a) The OMR of public market stalls is assessed by the Rating and Valuation Department (RVD). In assessing the OMR of public market stalls, the RVD mainly makes reference to the open auction results of stalls in the same market and other similar public markets. The RVD also takes into account the unique features of the market in question (e.g. location, business environment, facilities, patronage, etc.). Other factors for consideration include the trade permitted for operation, the size and layout of the stall and the location of the stall within the market.
(b) According to the definition used by the Town Planning Board (TPB) in interpreting the planning terms in statutory plans, "market" means any public or private market in which foodstuffs and commodities are sold and services are provided, generally by small traders. It also includes any site or area set aside as hawker centre/hawker bazaar. In this connection, the introduction of service trade stalls in public markets is in full compliance with the use designated by the Government for the land granted and defined by the TPB for markets.
The introduction of service trade stalls is aimed at enhancing the variety of public market services and boosting occupancy rates, with a view to increasing patronage and improving the overall business environment. The Government has consulted the relevant Market Management Consultation Committees before identifying appropriate vacant market stalls for conversion into service trade stalls. Its primary consideration is that the existing market services provided for the public will not be adversely affected.
(c) Since the introduction of service trade stalls in July 2009, the FEHD has been putting up vacant service trade stalls in its public markets for open auction every month. As at end of March this year, 52 of the total 79 service trade stalls have been let out (i.e. about 66%). The monthly rentals of these stalls ranged from the lowest of $620 to the highest of $4,350. The service trades mainly include interior design/renovation, beauty parlours, computer and related services, domestic services and Chinese medicine practitioners/bone-setters' clinics. The rentals of these service stalls and the highest and lowest stall rentals in the same markets are set out in Annex.
As the actual average rental of stalls of a particular category of business is the average actual rental paid by stalls of the same category of business in the same market, the rentals of service trade stalls will not affect the actual average rentals of stalls of other categories of business, such as meat stalls and dried goods stalls, etc.
Ends/Wednesday, May 11, 2011
Issued at HKT 14:47
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