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Carrie Lam

Three mountains: Hong Kong government eyes Link Reit, MTR fare rises and the provident fund

Chief Secretary Carrie Lam is understood to have told lawmakers that the administration wants to solve problems associated with the three issues

PUBLISHED : Monday, 06 June, 2016, 12:28am
UPDATED : Monday, 06 June, 2016, 1:30pm

Four years into her term as Hong Kong’s No 2 official, Chief Secretary Carrie Lam Cheng Yuet-ngor raised eyebrows recently by acknowledging three “mountains” or contentious issues the government aims to conquer.

The Post understands that in closed-door meetings, Lam told some lawmakers the “three mountains” facing the government are the controversial management of public housing malls by The Link Reit, repeated MTR fare increases and the offsetting mechanism of the Mandatory Provident Fund, which allows bosses to settle severance or long-service payments through their contributions.

Some pro-establishment lawmakers expect headway to be made on the last two issues rather than The Link before the term of the current administration expires in a year’s time.

Tackling high rents at Hong Kong’s wet markets caused by Link Reit development

However pan-democrats and political analysts are more sceptical. They said while Lam and her boss, Chief Executive Leung Chun-ying, would win public acclaim if successful, the complexity of the issues involved made it unlikely that solutions could be found anytime soon.

The Link, which took over government-owned malls and markets in 2005, has been accused of adopting a business practice that pushes up rents and drives small concerns out.

Lam is apparently unimpressed by management claims that occupancy rates are increasing and many tenants are making money and staying.

She said she would discuss possible solutions and these may include a government-led legal battle against The Link.

MTR fare rises review has Hong Kong government struggling to please both shareholders and passengers

Pro-government lawmaker Starry Lee Wai-king said Leung also “strongly criticised” The Link in a meeting with DAB members.

The Federation of Trade Unions wants the government to buy The Link’s malls and markets. But with property assets valued at HK$156 billion in September last year, Democratic Party legislator Wu Chi-wai said it was more realistic to build more public markets.

Wu said it would be easier to solve the MTR problem, as it mostly required a legislative amendment of the formula used to calculate fare adjustments.

Following a merger in 2007, MTR fares were supposed to rise or fall according to a formula that takes into account changes in wages for transport workers, inflation and productivity. But wage increases and high inflation mean there has never been a fare cut.

This month, MTR fares rose by 2.65 per cent, despite the rail operator making a profit of HK$13 billion last year. However, in April, in an apparent bow to public pressure, the MTR Corporation decided to kick-start an early review of the adjustment mechanism.

Leung Chun-ying’s race against time to solve MPF’s fraught offsetting mechanism

The government is also next year expected to address calls for the MPF offsetting mechanism to be scrapped. Lam has described the mechanism as a “loophole that needs to be addressed’’.

However Chinese University political scientist Dr Ma Ngok said the expected MPF announcement and MTR talks did not mean that two of the three “mountains” would be removed next year.

“I don’t think Lam or Leung would make ‘removing three mountains’ part of their election platform either ... because the problems are so deep-rooted that a candidate would struggle to elaborate on any one of them,” he added.

Ray Yep Kin-man, a political scientist at City University, believed that Lam was tempted to go for a higher position – the chief executive post – given her high-profile remarks on the three issues.

Ivan Choy Chi-keung, a political scientist at the Chinese University, said it was quite unusual for the current administration to attempt to take on thorny and longstanding issues when it had only one year of its term remaining.

“It’s natural and reasonable for some people to suspect Lam intends to run in the chief executive election and use these issues as her major agendas in her likely bid,” Choy said.