The Hong Kong University of Science and Technology is behaving like a private club. The latest dispute between the university and the Government over the pay of the HKUST's vice-chancellor, Professor Woo Chia-wei, indicates that the university council believes that government policy for tertiary institutions is not applicable to it. At issue is the council's decision to renew Professor Woo's contract for five years at pay exceeding that approved by the Legislative Council Finance Committee in 1996. The policy on pay was fixed following debates by legislators who concluded that the salary for university heads, fixed at 98 per cent of that of the Chief Secretary, was not commensurate with the responsibilities and workload that went with the job. They decided the pay be cut to the level of policy secretaries, presently $170,000 a month, after taking into account the remuneration packages of civil servants and heads of leading universities overseas. The decision stipulates the revised pay scale would not apply to existing heads, but that universities would have to follow the new regulations when renewing contracts. Notwithstanding the requirement, the university's council decided that Professor Woo should be exempt so that he would not suffer a salary cut in his new term. Officials stood by the policy and refused to grant an exemption. The university's council chairman, Chung Sze-yuen, reportedly raised the issue with Chief Executive Tung Chee-hwa. But that was not the end of the story. Last week, it was revealed that the council had given up negotiating with officials. Instead, it was considering using private donations to the university to fund the extra $30,000 a month for Professor Woo. With such an arrangement, officials conceded that the Government could not intervene. Superficially, the HKUST has not breached any government regulations or policy by funding the extra amount through private donations. But in spirit it has clearly chosen to defy the policy. The university council may regard the result as a compromise. But for many in the community, the council's approach is wrong. Far from instilling public confidence, the dictatorial approach is bound to provoke queries and scepticism. The public was told by the chairman of the University Grants Committee (UGC) and Executive Councillor Antony Leung Kam-chung that Professor Woo deserved the higher pay because he has contributed a lot to the university. But for those who have read recent reports that the UGC had decided to cut the HKUST's graduate student quota in light of its poor performance, that must be puzzling. How will other universities affected by the policy react to the HKUST's approach? Will they follow its example? If yes, will that render the government policy a farce? There is also the question of the donations being used to supplement Professor Woo's salary. Donations are normally designated for scholarships for students or funding for setting up laboratories or other new facilities. Using donations to subsidise the pay of a university head is unheard of. If the university decides to push ahead with its private-funding option, might donors reconsider their contributions to the university? Such a scenario would have adverse implications for the university and its staff. Supporters of the HKUST council may believe that outsiders have no right to intrude in the university's internal business. But in saying so they are forgetting that the institution is largely financed by public funds and there is a minimum public expectation on how it should behave.