Urban Renewal Authority should be included in new competition law

PUBLISHED : Tuesday, 20 March, 2012, 12:00am
UPDATED : Tuesday, 20 March, 2012, 12:00am


In the name of promoting competition, the government is pushing forward the competition bill but seeks exemptions for virtually all of the 581 statutory bodies.

The exemptions of the Hong Kong Trade Development Council (TDC) and the Urban Renewal Authority (URA) will promote anti-competitive behaviour.

The TDC manages the convention centre in Wan Chai under an exclusive agreement for the original convention centre in 1981 with New World Development.

Without a new tendering among new entrants and existing operators, any expansion of the convention centre in Wan Chai will benefit the existing partnership which already controls 45 per cent of the market. If the TDC is exempted from the competition law, the existing TDC/New World partnership will run until the contract expires, even though the contract is non-competitive in nature and the TDC can again award a similar kind of non-competitive contract to New World while continuing to be able to out-price the competition with the preferred Wan Chai location.

The URA buys, sells and develops real properties as an agency under the Development Bureau. With the ultimate power of government land resumption, the URA often gives a low offer to the original and diverse ownership and prices set by its own valuers without giving weight to valuation provided by the original owners. Allowing such behaviour, the URA intervenes and interferes with free market operations and puts individual owners at a big disadvantage, by taking away any leverage individuals may have while allowing the authority to 'lowball' its offers to owners. This is what happened at the building which is now called the K11 and the Masterpiece. The URA sold one flat at more than HK$35,000 per square foot while owning the remaining mall. The previously diverse business and ownership by small and individual owners was eliminated.

The government should take a lead in promoting the sprit of the competition law, not by seeking exemptions for its statutory bodies so that these bodies can behave non-competitively. The TDC and URA are but two clear examples of bodies that already take a dominant, if not a large, market share. They should not be exempted under the competition law. All bodies, private or government-related, should be under the same law, not above the law.

David Lai, Wan Chai district councillor