Legislative Council Bills Committee on
the Provision of Municipal Services (Reorganization) Bill
(8 September 1999)
Public Markets and Market Rental Policy
At the meeting of the LegCo Bills Committee on the Provision of
Municipal Services (Reorganization) Bill on 27 July 1999, Members asked
the Administration to provide information on the following:
- the existing mechanism for determining the market stall rentals,
the existing appeal systems; the proposed mechanism for LegCo Panel to
monitor the fee revisions; and
- the rationale of applying different regulatory requirements to public
markets in Government and Housing Authority premises and markets in private
This paper sets out the Administration's response.
Regulation of Public and Private Markets
2. Public markets are managed by the Provisional Municipal Councils
(PMCs) and governed by the Public Market (Urban Council) Bylaws and Public
Market (Regional Council) Bylaws (Cap.132 sub. leg.). The Bylaws
mainly provide for the lease of market stalls and the proper management
and sanitary maintenance of public markets.
3. It is the PMCs' policy that other than food premises in markets (such
as fresh provision shops) which are licensed on food and environmental
hygiene grounds, private markets, including Housing Authority (HA) markets
which are operated on a commercial basis, should normally not be subject
to any licensing control. Any nuisance or hygiene problem which the
management of a private market fails to handle properly can be dealt with
under the relevant environmental hygiene provisions in the Public Health
and Municipal Services Ordinance (Cap.132).
4. Nevertheless, there is one private market, namely Luen Wo Private
Market at Fanling, which is subject to licensing control by the Provisional
Regional Council (ProRC) under the Private Market (Regional Council) Bylaws
(Cap.132 sub. leg.) mainly for historical reasons. The market has
a long history dated back to the pre-World War II period. It is not
operated on a purely commercial basis as the market operator has been playing
the role of a non-profit making organization serving the local community.
The market management is therefore subject to some form of public supervision.
For example, Bylaw 9 of the Private Market (Regional Council) Bylaws requires
the owner of the private market to prepare annual accounts in such form
as the ProRC may require and post the accounts together with any reports
by the ProRC thereon in the market place for at least 7 days. Luen
Wo Private Market will be phased out upon the completion of the Luen Wo
Market (a public market) in 2001-2002.
Market Rental Policy of the Provisional Municipal Councils
5. The Provisional Urban Council (PUC) and ProRC each has different
rental policy for public market stalls under their management. The
market rental policy of each Council is summarised below.
(A) Provisional Urban Council's Policy
6. Market stalls in PUC public markets are normally rented out
initially for a term of 3 years. The stall agreements are renewable
subject to a review and revision of rental every three years. All
stalls in the public markets in the PUC area are let out by auction with
the upset price determined by the PUC having reference to the Open Market
Rent (OMR) of the stalls as assessed by the Rating and Valuation Department
(RVD). There are two types of auctions, namely open and restricted.
In open auctions the upset price is normally set at 100% of the OMR.
In restricted auctions, which are held pursuant to resiting exercise of
hawkers or displaced market stallholders, the upset price is reduced and
normally set at 75% of the OMR, subject to approval of the PUC Markets
and Street Traders Select Committee.
7. In revising stall rentals, the PUC makes reference to the
changes in the Consumer Price Index (A) (CPI(A)) preceding the renewal
of the stall agreement and the OMR assessed by the RVD.
(B) Provisional Regional Council's Policy
8. The mechanism for setting the upset price of public market
stalls in the ProRC area is the same as that of the PUC, except
that successful bidders are required to enter into a 4-year agreement
with the ProRC which is renewable upon expiry at the rent level to be determined
at the time.
9. Subject to the proviso that no stall agreement will be renewed
at a rental lower than the existing rent, a market stallholder who has
obtained his agreement through open auction may renew his agreement upon
expiry at a rent set at 100% of the new OMR. As regards a market
stallholder who has obtained his agreement through restricted auction,
he will be offered to renew his agreement upon expiry at a rent to be determined
on the basis of a formula which allows for increase by phases, depending
on the percentage difference between the existing rent and the new OMR.
Existing Review Systems for Market Stall Rentals
10. The PUC and ProRC each also has different review system for
market stall rentals. Both Councils allow a market stallholder who
disagrees with the new rental upon renewal of stall agreement to put forth
his reasons with reference to a set of assessment criteria and request
RVD to review the OMR assessment. USD/RSD would notify the stallholder
the result of RVD's review.
11. The ProRC has introduced another tier of review mechanism
since May 1997. Should a market stallholder in the ProRC area still
feel dissatisfied with the result of RVD's review, he may put forward reasons
anew and lodge his submission with the ProRC's Market Stall Rental Review
Sub-committee. RSD would present RVD's review result together with
the stallholder's submission to the Sub-committee for consideration.
Since its establishment, the Sub-committee has reviewed a total of 3 cases.
It upheld RVD's review results in two cases.
12. Once the review result is available, the stallholder concerned
would be asked to renew his agreement at the adjudicated rental, and the
new agreement would take effect from the date immediately after the expiry
date of the current agreement .
13. We intend to preserve the existing market stall rentals in
force immediately before the reorganization and aim to harmonize the different
public market stall rental policies in the urban area and the New Territories
within two years after the reorganization. We shall keep the relevant
LegCo Panel informed of our progress in this area. As regards stall
rental review, we intend to adopt the one-tier review mechanism currently
used by the PUC. In general, cases can be satisfactorily dealt with
under that mechanism. There appears no strong need to set up a statutory
committee as a second-tier review/appeal mechanism after the reorganization.
Constitutional Affairs Bureau
3 September 1999