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Consider public interest when going private

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Hong Kong has a long history of engaging the private sector to undertake public projects. Beginning with the construction of the first cross-harbour tunnel in the late 1960s, for example, the 'build, operate, transfer' model has been applied to building many tunnels.

In recent years, the scope of private sector involvement has been extended to service provision. While government departments are still responsible for the provision of various services, actual delivery is outsourced to private firms, as in the cleansing of public streets and toilets.

The arguments for public-private partnerships are compelling. For big infrastructure projects, BOT arrangements have the advantage of using idle private capital and tapping private sector expertise to build and operate them efficiently. As for outsourcing, its benefits are not limited to cost savings; it also sets useful benchmarks for services that have to be performed by civil servants for various reasons.

But such partnerships have not been immune to controversy. The West Kowloon Cultural District is a case in point. The government has insisted that the massive project be awarded to just one winning bidder, who will have to use profits generated from property developments on a prime waterfront site to build and operate a cluster of cultural venues that will boost Hong Kong's aim to be a cultural hub for the region.

Instead of winning applause for tapping the ingenuity of the private sector to achieve such a vision, the government has been accused of using the BOT arrangement to bypass the legislature, so it could channel what should have been proceeds from 'land sales' to a public project without getting legislative approval.

The recent row over the Eastern Harbour Tunnel's decision to raise tolls against public opposition has highlighted other pitfalls with BOT deals. The contracts for our three harbour tunnels were concluded at different times, with different parties and on different terms. Even though they are close alternatives to one another, there was no attempt to put them under umbrella provisions that could ensure they operate in harmony. As a result of this omission, the government now lacks the ability to regulate traffic flows through the three tunnels by imposing a co-ordinated toll scale.

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