Government enterprise in $425m bail-out bid
Finances at a government-controlled computer project have deteriorated to such an extent that it will be unable to pay its electricity bills and other expenses next month unless it receives a $425 million overdraft today.
The Tradelink project, twice given the backing of Governor Chris Patten in policy speeches, was designed to revolutionise paperwork for thousands of trading companies. But it is now $162 million in the red and its implementation more than a year overdue.
Griff Griffith, Tradelink's acting general manager, said: 'We have an overdraft facility that will see us into June. But when that runs out, there's no money in the bank.' However, the former chairman of the private-sector body that proposed the project a decade ago yesterday wrote to the Legislative Council's finance committee saying it should refuse the Government's emergency request for more cash.
Ian Tomlin, former chairman of the Trade Facilitation Council, said committee members should say 'enough is enough'. The $425 million loan would be a 'waste of money', he said.
In his letter, Mr Tomlin said 'if the finance committee does approve the request of a loan this would not be in the interests of Hong Kong business' because it would mean the project continuing on the same wrong path.
Mr Tomlin said yesterday he was incensed by the Government asking for $425 million for Tradelink when it had previously refused a $2 million grant for the council when it wanted to rationalise and improve the Government's handling of paper forms.
The Tradelink project would allow firms to apply for textile export licences, trade declarations and other government paperwork using computer terminals in their offices. Last year alone 14 million trade declarations were issued - all on paper.
A consultant study submitted to Legco members said the Tradelink project 'lacked credibility in the wider community' and its financial position was now untenable.
The project was intended to begin operation in January last year but is now scheduled to start next year.
One source said the project had lacked commitment from civil service middle managers who feared their empires would disappear if efficiency gains were made.
Legislators refused a funding request earlier this month saying they had not been given enough information. Finance committee member Emily Lau Wai-hing said: 'My main objection is about how this is done. I don't see why we should make this loan.' Anthony Charter, managing director of freight firm HACTL, said a lack of government commitment to phasing out paper systems was a major problem.
'In my view this is an essential part of Hong Kong's infrastructure, like a new airport or a new road,' he said.
Tradelink is set up as a limited company, with the Government holding 48 per cent.