Minister vows not to rush airport privatisation
Privatising the Airport Authority needs careful study and the government will not rush into it this year, Secretary for Economic Development and Labour Stephen Ip Shu-kwan has said.
More than 60 responses to a public consultation that ended last Tuesday will have to be looked at first.
'We think it is suitable to take the airport public, but before making the decision, we needed to do a public consultation,' Mr Ip said yesterday.
'We have just finished the consultation and received a lot of opinions. Some people are concerned and some have reservations. We need time to look at it.
'The most important is to take care of public concerns before looking at when to go public.'
Questions include the airport's competitiveness after privatisation, use of land on the site and employee benefits.
The failure of the Link Reit initial public offering, in which a court action derailed the multibillion-dollar privatisation of certain Housing Authority assets, provided a lesson that the privatisation of public assets were open to challenge, the secretary said.
He added that a bill would need to pass through the Legislative Council to privatise the airport, which would give the public plenty of opportunities to voice their concerns.
On electricity market reform, Mr Ip highlighted the potential difficulties facing new entrants to the market, though some companies have expressed interest in supplying power to the city.
'They are just very preliminary proposals. In principle, we welcome more competitors. But at the same time, we have to consider practically whether there is enough electricity sold from the mainland,' he said.
Mr Ip said they understood the power shortage in Guangdong would remain in the short term though some power plant construction was under way across the border.
He also cast doubt over the cost-effectiveness of a new power supply if the electricity was not carried by the existing companies' power grid, but rather by a newly built grid.
'If they have to build their own grid, it might not be able to go too far and its operation costs could not be lowered. After all, as Guangdong is in power shortage, there is still a consideration whether a profit could be made by transferring the power to Hong Kong,' he said.
Mr Ip said the government was now studying the 700 submissions on the reform and would come up with concrete proposals for further public consultation later this year.
He said they would strive to achieve a balance between supply reliability, tariffs, competition and environmental protection.