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LCQ11: Selling of self-financing departments by institutions funded by the University Grants Committee

     Following is a question by the Hon Ip Kin-yuen and a written reply by the Secretary for Education, Mr Eddie Ng Hak-kim, in the Legislative Council today (July 9):


     It was reported in the press on the 26th of last month that the City University of Hong Kong (CityU) planned to sell the Community College of City University (CCCU), which it established in 2004 to provide self-financing associate degree programmes, and was now negotiating with two potential buyers. As CityU is one of the institutions funded by the University Grants Committee (UGC-funded institutions), and most of the other UGC-funded institutions also have similar self-financing departments, the sale plan affects not only the current nearly 7 000 students and 200 teaching staff members of CCCU, but also future students enrolling in programmes offered by such self-financing departments. In this connection, will the Government inform this Council:

(1) whether the authorities knew CityU's plan to sell CCCU prior to the aforesaid press report; if they did, of the details of the plan; if not, the reasons for that; of the measures taken by the authorities to follow up the plan;

(2) whether it knows if CityU has conducted any public consultation on its plan to sell CCCU;

(3) given that the authorities provided interest-free loans of about $45 million and $600 million to CityU through the "Start-up Loan Scheme for Post-secondary Education Providers" in 2002 and 2005 respectively to subsidise its renting and renovation of commercial premises in Kowloon Bay and the construction of buildings in its Kowloon Tong main campus as the school premises of CCCU, whether the authorities had, in granting those loans, imposed conditions on the management and operation of CCCU, as well as on the right to use and the uses of the school premises concerned; if they had, of such conditions; if not, the reasons for that;

(4) of the authorities' role in monitoring the uses of the newly built school premises referred to in (3) after full repayment of the loans by CityU; whether they have studied which parties will own the school premises upon CityU's completion of the sale of CCCU, and which parties decide on the uses of the school premises;

(5) whether it has studied which party owns the proceeds from the sale of CCCU by CityU;

(6) of the authorities' measures to ensure that the programmes offered by CCCU after the sale will be of high quality and that the rights and interests of the teaching staff and students of CCCU will not be undermined because of the sale;

(7) of the vetting and approval procedures for UGC-funded institutions to establish self-financing departments; which self-financing departments are registered under the Companies Ordinance (Cap. 622) at present; how the authorities monitor the management and operation of such self-financing departments; whether UGC-funded institutions are required to apply to the authorities for selling their self-financing departments; if such applications are required, of the vetting and approval procedures, how the authorities monitor the sale process, and whether the authorities will, in approving such applications, impose conditions on the buyers' future management and operation of the self-financing departments concerned; and

(8) in cases where UGC-funded institutions have sold their self-financing departments, what requirements and procedures are currently in place to deal with matters relating to the programmes offered, academic qualifications awarded and employment contracts entered into by such self-financing departments prior to the sale?



     Post-secondary institutions in Hong Kong enjoy a high degree of autonomy in academic development and administration. It is the Government's policy to support the parallel development of the publicly-funded and the self-financing post-secondary education sectors.

(1), (2), (5), (6), (7) and (8) The eight institutions funded through the University Grants Committee (UGC) are autonomous statutory bodies, each with its own ordinance and governing Council as the supreme governing body.  While enjoying a high degree of institutional autonomy in academic development and administration, each institution should be mindful of the interests of the students and the public and be held accountable for their decisions.

     Generally speaking, UGC-funded institutions may decide on the setting up of their self-financing operations and the future development of these establishments on their own without the need to seek the approval of the Education Bureau (EDB).  That said, institutions should ensure that self-financing activities do not detract from their core work and have distinct separation of resources from publicly funded programmes.  As for arrangements involving staff and students, institutions should also ensure that there is adequate consultation and communication.

     Self-financing operations of UGC-funded institutions currently registered under the Companies Ordinance (Cap. 622) include the Community College of City University (CCCU); HKIEd School of Continuing and Professional Education Limited of the Hong Kong Institute of Education; the College of Professional and Continuing Education Limited, Hong Kong Community College and The Hong Kong CyberU Limited of the Hong Kong Polytechnic University; and HKU School of Professional and Continuing Education of the University of Hong Kong.

     The City University (CityU) has informed the EDB of its initial ideas on the future development of its CCCU which offers self-financing programmes, but a decision has yet to be made.  Given the possible impacts of the development on its staff and students, the EDB has made it clear to CityU that any arrangements have to take into account the interests of the existing staff and students, as well as the quality and recognition of programmes.

(3) and (4) In 2005, the Government granted a loan of $599.5 million to CityU for constructing premises for CCCU to provide self-financing post-secondary programmes.  A loan agreement, which specified the uses of the premises, was signed between the Government and CityU in 2007.  CityU started to repay the loan in 2009 until it was fully repaid in 2013, followed by the termination of the loan agreement. Nevertheless, the EDB strongly recommended at that time that CityU should take into account the interests of CCCU's students in the use of the premises.  The land in which the premises located is granted to CityU by the Government through private treaty, and CityU is required to use the premises according to the conditions of grant.

     In addition, the Government granted another loan of $44.756 million to CityU in 2002 for renting and refurbishing the commercial premises in Kowloon Bay as the campus for CCCU. CityU also repaid the loan in full in 2013.

Ends/Wednesday, July 9, 2014
Issued at HKT 17:19


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