Funding for consultants who will advise the Government on the auction of third-generation mobile-phone licences cleared one Legislative Council panel yesterday. But the actual amount sought will not be revealed until the funding request goes before Legco's Finance Committee for a vote next month.
Officials are concerned that premature disclosure of the amount available might influence the fees demanded by the consultants, seven of whom have been short-listed for the potentially lucrative contract.
Explaining the funding request at the Legco information technology and broadcasting panel yesterday, officials said Denmark had spent $68 million on an equivalent consultancy service. 'But we hope competition among the potential consultants will drive down the cost,' Deputy Secretary for Information Technology and Broadcasting Eva Cheng said.
Democrat Law Chi-kwong said the money was worth spending. 'We must be careful in conducting the auction. Otherwise it may lead to litigation. We may end up losing more than we have gained,' Mr Law said, referring to the impending law suits in some European countries. 'If we disclose the funding amount sought, it will affect the prices proposed by the consultants and it may not be in the interests of public finance.'
Ms Cheng said that obtaining the advice of consultants provided a necessary safeguard against legal disputes and the possibility of phone companies colluding to keep down their bids for licences. She said the consultants would follow through the screening and bidding process to ensure fairness and efficiency.
The Government plans to auction four third-generation - or 3G - licences in the middle of next year after preliminary vetting of potential bidders early in the year. A wide range of multimedia applications with mobile phones, such as video-phones and other innovations, will be available in 2002.
