A Legislative Council committee has expressed grave dismay at the government's 1982 decision to give an excessive amount of land to the Union Hospital.
The land, which had been granted to the hospital in Sha Tin for health use, was left idle for years until sold for HK$300 million to Henderson Land to develop a luxury property project in 2004.
Legco's Public Accounts Committee on Wednesday said the government's move gave the operator of Union Hospital "an unfair and unjustified advantage" over other hospital operators, which was both "inexcusable" and "unacceptable".
"The land grant decision was made according to the development standard at the time," said Development Secretary Paul Chan Mo-po in response to the committee's harsh words.
"When we look back now, I think we could have learned a lesson from it," he said, reassuring the committee that the same bargain in granting land to private hospitals would not happen again. "The government will impose a strict limit in future."
Chan denied the possibility that the grant had involved any transfer of interest between the government and the hospital operator. The operator paid HK$610 million in land premiums for the change of land use, he said.
Civic Party lawmaker Alan Leong Kah-kit expressed satisfaction with Chan's reassurance, but said: "Even if the same thing were not to happen again, this does not mean that other hospitals did not have the same problem.
"It is against the interest of the public, and we urge the government to follow up on the existing matter."
The Sha Tin land had been among several direct land grants by the government to public hospitals.
A committee report released yesterday noted that a few hospitals had failed to comply with two conditions under the land grant policy - that they should provide a number of free or cheap beds to the public, and reinvest profits from operations to improve their facilities.
The Health Department should have conducted inspections and taken regulatory actions against the private hospitals which flouted the conditions of the policy, the committee said.
"They [the Health Department] have been lazy in doing their job for more than a decade," Leong said.
The department's negligence had led to a possible under-reporting of sentinel events - meaning unanticipated events resulting in death or serious injury - as well as a lack of price transparency and effectiveness in ensuring prompt remedial actions in private hospitals, the report stated.