Tender matter

PUBLISHED : Saturday, 06 July, 1996, 12:00am
UPDATED : Saturday, 06 July, 1996, 12:00am

After yesterday's disruptive sail-past by protesting barge-operators, other harbour users might be tempted to cheer if the demonstrators on the water sank without trace. The protest did, however, serve to focus attention on the Government's plan to put the use of public cargo handling berths out to tender. The barge operators who use the berths claim that the proposals will put many of them out of business. If tenders are awarded to the highest bidder, small family businesses fear they will be swamped by larger operators.

The traditional Hong Kong response would echo the view of the ferry users. It would say that it is time market forces were allowed to work their magic: if the result is domination by a few large, but more efficient operators, so be it. In fact, such efficiencies are neither the purpose of the proposals nor their likely outcome. The object is to force operators to pay market prices for their berths, to drive out triad operators who sublet to genuine users at extortionate rates, and to ensure future rentals are not open to interference from the Legislative Council.

The triad problem would be better solved by police action. The police have pointed out that abolishing the current peppercorn rents would make the subletting business less attractive to organised crime. However, there are other criminal activities involved - particularly smuggling - which require firm policing.

Fears of unbridled competition have been partly addressed by the Government, which now proposes restrictive tendering designed to ensure that genuine operators do retain enough cargo berths to stay in business. The danger, which the Government dismisses as unimportant, is that small companies may be forced into remote and less economically attractive berths.

In the long term, that may be the price of progress. But it is unnecessary to force the issue. Three or four years hence, when the first contracts expire, operators will anyway be reorganising to move into the new river transport terminal at Tuen Mun. That will be the time to bring the full force of the market to bear on the industry. Introducing market rents and squeezing out crime are ambitious enough targets for the moment.