MR CHAN KIN-POR (in Cantonese): Deputy President, Link REIT has adopted a commercial mode of operation since its listing, managing the commercial and car parking facilities in a large number of housing estates. Originally, a commercial mode of operation will help to enhance its operational efficiency and improve its services. However, if it only cares about pursuing profits and forgets about its corporate social responsibility, even if it can make huge profits, in the end it will only be branded as “unscrupulous”. Eventually, the enterprise itself will have to pay a price.
The present business approach of Link REIT which only cares about maximizing profits can no longer keep up with the international business community. In fact, the business sector has generally recognized for decades that an enterprise must undertake its social responsibility. Moreover, the more money it makes, the greater the responsibility. Simply put, the business sector agrees: first, society will only respect commercial organizations which profit in a rightful way, that means making money in a fair manner. Second, commercial organizations should repay society appropriately in order to establish a good brand name. It has long been proven in the international business community that no matter how much money is made, an enterprise which ignores its social responsibility will only be branded as “unscrupulous” and will not gain any respect in society. Sooner or later, it will have to pay the price. Regrettably, Link REIT has chosen this path.
Back then, when the Government sold the shopping arcades in public housing estates, one of the important purposes was to introduce professional management to improve and enhance the service standard. As we all remember, at that time most of such shopping arcades had low operational efficiency with a poor environment. Since the takeover by Link REIT, it has indeed provided professional management. Both efficiency and the environment have seen enormous improvement. However, Link REIT has forgotten that its edge actually hinges on the vast support of public housing residents. Yet given the monopolization of the market, Link REIT has eventually developed into a freak which seeks to maximize its profits, completely forgetting its responsibility and disregarding the residents’ needs. Hence, I support Ms YUNG Hoi-yan’s original motion on vigorously promoting healthy market competition and introducing measures to counteract the dominance of Link REIT.
Some people have proposed buying back Link REIT, which I consider impractical and unreasonable. Link REIT’s present market value has reached $115.6 billion, more than four times higher than the price when it was listed. If the Government wishes to recover the decision-making power, it will have to buy back more than 50% of the shares at a cost of at least $58 billion. Moreover, it has not taken into account that the buy-back will definitely cause an upsurge in the share price. In the end, the Link REIT management will, on the contrary, consider themselves very successful in causing Link REIT’s value to substantially appreciate. It will also send a wrong message to the community which indirectly encourages other enterprises to follow suit in order to induce acquisition by the Government. For this reason, instead of a buy-back, we had better use the money to introduce healthy competition, making use of the market power to force Link REIT to return to the right track, and this will certainly be more beneficial to society
As mentioned in the original motion, the Government should build public markets in places where community facilities are inadequate. It should even build large municipal services complexes in various districts. These are long-term solutions, but we also need some interim measures to resolve the plight of the residents currently. The setting up of temporary bazaars is a good suggestion, but according to past experience, the selected sites must be convenient to the residents. If they are too far away, they will be unable to attract residents and fail in the end.
Meanwhile, Mr SHIU Ka-fai’s amendment has mentioned the re-assignment of spaces on the lower floors, such as ground and podium levels, for retail purposes. I support this proposal. In fact, in the early years, there were a large number of shops on the ground floor in public housing blocks providing the residents with plenty of affordable commodities. It was not until the new public housing estates were built with shopping arcades that such ground floor shops gradually disappeared. As a matter of fact, proper use of the large amount of space currently available on the lower floors in public housing blocks, coupled with appropriate management, can definitely release a lot of retail spaces for lease by small shop operators.
Apart from these proposals, I think consideration can be given to converting school premises and other community facilities which are vacant into temporary municipal services complexes. The two lowest floors can be used as wet goods and dry goods markets while the other floors can serve as reading rooms or for leisure and cultural purposes. Not only can it benefit members of the public and small shop operators but also revitalize the vacant buildings, achieving several objectives in one stoke. Apart from setting up temporary bazaars, I think consideration can at the same time be given to moderately relaxing the hawker policy, appropriately issuing temporary licences to specific persons, such as the unemployed, with a time limit, and allowing hawking only at certain specified locations, thereby helping more disadvantaged people.
Now the most severe criticism against Link REIT is that it has driven away small shop operators and caused the commodities in markets to become increasingly expensive. Focused exactly on the present situation, these proposals can make up for Link REIT’s inadequacies and instantly bring convenience to the residents. It can also impose on Link REIT pressure of competition and make it reform.
Nevertheless, even if these proposals are feasible, ultimately it will require determination on the Government’s part to act. Otherwise it will only be empty talk. The Government has always played safe in its work at the district level. Usually it will not carry out any bold reform without full confidence. However, now it is about the well-being of the petty masses. I very much hope that the Government can resolve to implement the relevant proposals boldly.
I so submit.