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The Government proposed to privatise a substantial minority share of the Mass Transit Railway Corporation (MTRC) through a public offering and it would remain the majority shareholder, the Financial Secretary, Mr Donald Tsang, told the Legislative Council today (Wednesday).

In presenting the 1999-2000 Budget, Mr Tsang said, "An offering of this nature will provide the people of Hong Kong with an unrivalled opportunity to participate in the ownership of a successful and profitable public corporation.

"The introduction of private ownership will reinforce the MTRC's commitment to competitiveness and efficiency.

"It will broaden the Corporation's access to funds and reduce its reliance on Government equity injection or loans for future development."

The introduction of the MTRC as a company listed on the local stock exchange would strengthen the market and enhance Hong Kong's attractiveness to investors, he added.

"In addition, the proceeds from the sale of this stock will also provide a useful boost to our finances over the medium term," he said.

Mr Tsang cautioned that the Government needed to strike a sensible balance in the regulatory framework between the different interests of investors, employees and commuters, and to ensure in the process no diminution of safety or service standards.

"And we need to wait until the market is right before we sell any shares," he said.

Mr Tsang explained that the original reasons for 100 per cent government ownership of the MTRC were no longer valid as financially, the fundamentals of the Corporation were solid.

Consultation with LegCo and the community on the partial privatisation will be made.

Mr Tsang said, "When successfully implemented, this ground-breaking initiative will become the benchmark for privatisation, where appropriate, of other government-owned assets in future."

A bill for this purpose will be introduced into the LegCo within the 1999-2000 fiscal year.

End/Wednesday, March 3, 1999

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