Replies to LegCo questions
LCQ9: Public markets
Following is a question by the Dr Hon Kwok Ka-ki and a written reply by the
Secretary for Food and Health, Dr Ko Wing-man, in the Legislative Council today
(December 19):
Question:
In October 2010, the Food and Environmental Hygiene Department (FEHD) launched a
pilot scheme to let market stalls on short-term tenancies (STTs) for its public
markets (the pilot scheme). Under the pilot scheme, market stalls which had been
vacant for more than eight months were let through open auctions and their upset
prices were fixed at 60% of the open market rents. The tenancies of the stalls
leased out during the first round of open auctions covered three years, and
stalls which had not been leased out were leased out in the form of STTs during
the second round of open auctions. The STTs, which covered three months
commencing on November 1, 2010, were renewable for another three months. The
tenants might extend the tenancies later by paying the open market rents of the
stalls as assessed by the Rating and Valuation Department or the STT rents,
whichever were higher. The tenancy agreements for the third term covered 30
months. However, FEHD has not offered rent concessions to long-term market stall
tenants who are required to pay rents higher than those payable by short-term
tenants, resulting in two sets of rental standards applicable to the same
market. In this connection, will the Government inform this Council:
(a) of the vacancy rates of various FEHD markets in Tsuen Wan, Tuen Mun, Yuen
Long and Kwai Tsing districts from 2008 to the first half of this year set out
in Annex;
(b) of the respective numbers of stalls leased out by three-year tenancies, STTs
and tenancy extension through the pilot scheme in the past two years; and
(c) of the existing number of tenants who have rented stalls for more than three
years but not through the pilot scheme; whether the authorities will implement
any concessionary measures for such tenants; if they will, of the details; if
not, the reasons for that?
Reply:
President,
At present, the Food and Environmental Hygiene Department (FEHD) is responsible
for managing 77 public markets which mainly provide fresh food and other dry and
wet goods, as well as 25 free-standing cooked food markets (CFMs), providing a
total of some 14 450 stalls. FEHD is committed to enhancing the operating
environment and competitiveness of its markets and CFMs through the
implementation of various measures. These measures include carrying out
enhancement projects to upgrade their facilities, keeping the markets clean to
provide customers with a pleasant environment, and holding promotional
activities from time to time to attract patronage. Currently, the overall
occupancy rate of public markets and CFMs managed by FEHD is approximately
89.1%, representing an increase of 12.2 percentage points from 76.9% in 2008.
Excluding the number of vacant stalls that have been withheld from letting out
due to impending consolidation or improvement works in certain markets and CFMs,
the actual occupancy rate is 96%.
My reply to the various parts of the question is as follows:
(a) The vacancy rates of various FEHD markets and CFMs in Tsuen Wan, Tuen Mun,
Yuen Long and Kwai Tsing districts from 2008 to the first half of this year are
set out in Annex.
(b) In February 2009, FEHD introduced the arrangement whereby long-standing
vacant stalls were put up for auction at concessionary upset prices (the
"concessionary upset prices" arrangement) in the interest of achieving better
utilisation of these vacant stalls. Under the arrangement, FEHD reduced the
upset auction prices for stalls vacant for more than six months and eight months
to 80% and 60% of the Open Market Rental (OMR) respectively and let out the
stalls through a three-year tenancy, with a view to enhancing their
attractiveness. Since the implementation of the arrangement, a total of about 2
220 stalls have been let out at concessionary rent.
For stalls that could not be successfully let out despite the "concessionary
upset prices" arrangement, most of them were situated at locations with
relatively poor patronage which render them less attractive to prospective
bidders. In view of this, FEHD had since October 2010 launched a pilot scheme to
let out public market stalls through short term tenancy (the "STT pilot scheme")
thus giving persons interested in starting up their business ventures in public
markets the choice of trying out their business for three months without being
bound by a three-year tenancy. Under the scheme, for stalls which had been left
vacant for more than eight months and were not leased out in the first round of
auctions at 60% of the OMR through a three-year tenancy, they would be auctioned
in the second round through a STT for three months. The STT, upon expiry of the
three-month period, is renewable for another three months. The tenant may then
choose to extend the tenancy for another 30 months by paying the updated OMR as
assessed by the Rating and Valuation Department or the STT rent, whichever is
the higher. In the past two years, a total of 30 stalls have been let out under
the "STT pilot scheme", with 15 tenancies being renewed for three months and
nine subsequently renewed for further 30 months.
(c) Currently, a total of about 12 870 stalls in FEHD markets and CFMs have been
let out. Among them, about 1 320 are let out under the "concessionary upset
prices" arrangement and 12 under the "STT pilot scheme".
As mentioned above, the "concessionary upset prices" arrangement and the "STT
pilot scheme" are applicable only in the case of long-standing vacant stalls.
Hence, the concessionary rental rates are applicable to the tenants of these
stalls only. In fact, the rentals of public market stalls were reduced
across-the-board by 30% in 1998 and had been frozen at that reduced level since
then. The tenants of many stalls are paying rents below the OMR. The Government
has earlier announced its decision to further extend the rental freeze period
for public market stalls under the management of FEHD up to December 31, 2013.
There is currently no plan to introduce other rental concessions for market
stalls.
Ends/Wednesday, December 19, 2012
Issued at HKT 16:20
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LCQ9 Annex 1 (Question)
LCQ9 Annex 2 (Reply)