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HAB responds to PAC Report No 56 on Hong Kong 2009 EAG

     A spokesman for the Home Affairs Bureau today (July 6) said the Government had noted the conclusions and recommendations made by the Public Accounts Committee (PAC) in its report on the Hong Kong 2009 East Asian Games (EAG).

     The spokesman said that in the funding paper submitted to the Legislative Council's Finance Committee (FC) in January, 2006, the Administration estimated that the gross expenditure required for organising the 2009 EAG would be $240 million, while the revenue would be $117 million. Against this background, a funding application of $123 million was made to support the organisation of the Games. The Government made its estimation of costs and revenues based on information available at that time and the funding was approved by the FC.

     After the Games, the actual expenditure of the EAG after audit amounted to $291.1 million, while the revenue was $180 million. Of the $123 million funding approved by the FC, the EAG Company had only spent $111.1 million with a surplus of $11.9 million, not exceeding the amount approved by the FC.

     The spokesman stressed that all the expenses were actual expenditures required for the Games. The unbudgeted expenditures were all supported by the EAG Company through sponsorship, tickets proceeds, and souvenirs sales. In organising the Games, the Administration had all along strictly followed the principle of managing public finances prudently and sought to keep expenditure within revenue limits. The EAG was held successfully on this basis, with expenditure not exceeding the approved allocation.

     In relation to the PAC's recommendation for calculating the "full direct cost" of the 2009 EAG, the spokesman pointed out that, as in the case of running other major events in Hong Kong, relevant Government departments would render support to the EAG as part of their regular duties and services and use the opportunity to promote their departmental policies and objectives. For instance, the Leisure and Cultural Services Department (LCSD) had organised leisure, cultural and community participation activities with EAG themes as part of the department's regular duties. While these services were undoubtedly related to the EAG and did contribute to its smooth operation, they were also part of the department's day-to-day work. Regarding the PAC's recommendation that in organising mega events, submissions to the FC should cover all costs to be incurred, the spokesman stated that it was the Administration's current practice that the overall implications of the proposed funding items would be reflected in the FC papers.

     The spokesman also pointed out that funding for the EAG legacy projects in fact came from a $10 million sponsorship received by the EAG Company after the Games, and this sponsorship could clearly be differentiated from the government subsidy disbursed to the Company. The Secretary for Home Affairs and the Board of Directors of the Company, with due consideration of various factors, agreed that donating the unallocated $10 million under the above sponsorship to two athletes' funds to assist athletes in their studies and employment as the EAG legacy projects was consistent with the Memorandum and Articles of Association and objectives of the EAG Company. It was also compatible with the objectives of the EAG in the promotion of sports and did not involve the use of public coffers. The arrangement was lawful, reasonable and rational.

     The 2009 EAG was the first ever international multi-sport event staged in Hong Kong. The Administration, local sport sector and Hong Kong people gained invaluable experiences from the Games. The Administration conducted a review after the Games. If Hong Kong is to hold a mega event of similar nature in the future, the Government will certainly share the experience of hosting Hong Kong 2009 EAG with the organisers and make reference to PAC's recommendations to ensure that such major events will be held even more successfully.

Ends/Wednesday, July 6, 2011
Issued at HKT 20:19


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