The Government accepts all the recommendations made by the Public Accounts Committee on the development of a site at Sai Wan Ho and will actively implement them, Chief Secretary for Administration Rafael Hui says.

Speaking on a motion in the Legislative Council today, Mr Hui reiterated that the Government had always been supportive of the work of the Audit Commission and the committee (PAC). 

He pointed out that it had been a long-standing arrangement for the Audit Commission to conduct value-for-money audits on Government services. The committee also played an important role in ensuring that the Government provided quality public services in an efficient and cost-effective manner.

Stressing that the Government was most grateful to the committee for its valuable views and constructive comments, Mr Hui said the committee and the Independent Committee of Inquiry (ICI) had different functions, focuses and areas of responsibility.

No subordinate relationship

"There is no subordinate relationship, no conflict between them, and no question that the Government must choose between the two.

"Although the two reports have different focuses, their recommendations to the Government are alike. On improving the approval mechanism of land development projects, the PAC and ICI have made a number of similar recommendations in their reports." 

However, in view of some Legco members' concern that the Government set up the ICI to conduct an investigation before the PAC had studied the report of the Director of Audit, Mr Hui said the Financial Services & Treasury Bureau would look into the matter with the PAC.

Mr Hui also responded to some Legco members' view that the conclusions of the reports of ICI and PAC "were not in total accord", in particular the issue of discretionary powers exercised by the former Building Authority (BA) to exempt the public transport terminus from gross floor area calculation.

No abuse of power

"The ICI thinks the decision of the former BA to exempt the public transport terminus under Buildings (Planning) Regulation 23 (B(P)R23) was wrong, but as the former BA has sought legal advice, examined past cases and considered arguments put forward by relevant parties, ICI considers his decision 'reasonable'," he said.

The PAC Report does not consider that the former BA has acted "ultra vires" or abused his power, Mr Hui said, adding the ICI was also of the view that he should bear no blame.

"From the legal perspective, we cannot say that the former BA has not acted in accordance with the law or extended beyond the power vested in him by the law in handling the Sai Wan Ho development. He has acted in accordance with the relevant legislation and the established procedures, and made reference to previous cases in discharging his duties as the BA," he added.

Regarding the issue of financial implications, Mr Hui said, "In an open market with a highly sophisticated property development industry in Hong Kong, bidders for the Sai Wan Ho development should have taken all relevant factors into account. The prices offered should have reflected these factors."

Financial implications

Secretary for Housing, Planning & Lands Michael Suen said the Audit Report stated that the financial implications of excluding the public transport terminus from the gross floor area calculation could amount to $125 million, which meant the value of the gross floor area concerned might be expressed in terms of $125 million, and not that the Government had lost $125 million in revenue.

"Certainly, no other parties, except for the individual tenderers, could tell the exact extent to which their bids for the Sai Wan Ho development project were affected by their expectation that the BA would approve the exemption of the public transport terminus from the gross floor area calculation.  

"As such, we cannot assume that the Government has lost $125 million in revenue because of the exemption," Mr Suen said.