Peak Tramway (Amendment) Bill 2015 （2015/10/28）

Deputy President, I rise to speak in support of the Government's amendment to the Peak Tramway (Amendment) Bill 2015. I will express my views on Mr Tony TSE's amendment later on.

On the issue of regulating the peak tramway, I have proposed to the Bills Committee on the Peak Tramway (Amendment) Bill 2013 that the Commerce and Economic Development Bureau should replace the Transport and Housing Bureau as the Policy Bureau in charge of the regulation of the peak tramway. I would like to thank Honourable Members for their support. The Government has adopted the proposal and made the relevant adjustments in the Bill for scrutiny this time.

When the peak tramway was built over a century ago, it was intended to be a mode of transport for residents travelling up and down the Peak. Following the improvement in road and transportation networks, today the residents usually travel by private cars, buses and mini-buses instead of the peak tram. Nowadays, very few residents still use the peak tramway as a daily transport means; nearly all passengers taking the peak tram are tourists. According to a survey conducted by the Hong Kong Tourism Board, the Peak ranks the second in terms of popularity among all the tourist attractions in Hong Kong. I believe many tourists are eager to travel on this famous tourist attraction. The peak tramway has been widely recognized as an ancillary facility essential to the tourism activities at the Peak. If the Transport and Housing Bureau still regulates the peak tramway purely as a mode of transport, this approach is absolutely outdated. Putting the peak tramway under the Commerce and Economic Development Bureau as a tourist facility will facilitate the Commerce and Economic Development Bureau's co-ordinating work, as it will consider the peak tramway jointly with other tourist attractions. Ngong Ping 360 is currently regulated as a tourist facility. Similarly, if the peak tramway is regulated as a tourist attraction likewise, its positioning will be very clear. The Policy Bureau concerned can then focus on its work and develop the potential of the peak tramway to an even fuller extent. In the future, I would like the authority concerned to pay more heed to the following:

First of all, all tourist facilities in the Peak area, including tourist attractions, entertainment venues, shopping arcades, restaurants and eateries, the peak tramway, and so on, should be considered as a whole. When planning on tourism development or doing work on publicity and promotion, the Government should focus on how to generate maximum synergy from this chunk of facilities, and manage the interactive relationship between the peak tramway and other related facilities from the angle of tourists' experience and the benefits for local people. This will help lift the overall image of the Peak.

Secondly, as the peak tramway of Hong Kong is a notable attraction with a century-old history, the Policy Bureau concerned has the responsibility to give focused advice to the operator on tourism development, conservation, planning, and so on, from the angle of an expertise, and by making reference to the advanced management experience of overseas countries. This is to ensure that the facilities and services of the peak tramway is effectively monitored and improved, so that better experiences can be provided to tourists and local visitors.

Thirdly, the public are even more concerned about the issue of fare levels. Though the regulation of the peak tramway will be handed over to the Commerce and Economic Development Bureau, the fare levels will still be set by the operator according to market situations. Currently, the fare levels can be called reasonable. I hope that, after the enactment of the Ordinance, when the operator considers whether to adjust the fare levels, it will follow the old good practice by giving adequate weight to public interest and make efforts to assess whether the fare levels are reasonable, so as to avoid excessive volatility in fare prices. On the Government side, it should keep an eye on the operation and the criteria for setting fare levels of the Peak Tramways Company Limited (PTC), and gives its advice to the PTC in a timely manner. Given that Hong Kong's in-bound tourism is now facing a downward trend, I urge the Government to provide  stronger support to the peak tramway and other related tourist attractions in Hong Kong, and step up the promotion of these attractions with a view to enhancing Hong Kong's competitiveness in the regional tourism market. 

Deputy President, I hope that the Government can learn from the experience of this Bill, and avoid any similar situation where it is under the pressure of the imminent expiry of the operating right under the Ordinance. After the enactment of the Ordinance, the PTC should also enhance its services and renovate its facilities expeditiously, including improving the queuing arrangement at the terminals, completing the renovation works of tramcars and providing a more spacious waiting area to improve service quality while causing minimal interference to visitors. The PTC should also raise the quality of its services and make long-term planning based on the passenger growth in the next 10 to 20 years, so as to make the century-old brand name of peak tramway even more appealing to visitors.

Deputy President, I so submit. 

Chairman, I support the amendment moved by Mr Tony TSE.

Another major change brought about by the Peak Tramway (Amendment) Bill 2015 (the Bill) is the incorporation of an "exit mechanism". If the peak tramway operator is in default, the operating right can be terminated before the expiry date. The Chief Executive in Council has the right to request the original operator to surrender the operating right and mandatorily require the original operator to lease the relevant land and structures to the new operator. In view of the proposal on incorporating the mandatory lease arrangement into the Bill, some Members have pointed out that this may affect the provisions of the Basic Law on the protection of private ownership right. Although the Government has responded that the proposed mandatory lease arrangement is consistent with Article 6 and Article 105 of the Basic Law on the protection of private ownership right, I am still of the view that due to the mandatory lease arrangement, it is necessary to increase the clarity of the provisions of the Ordinance.

At present, the Peak Tramways Company, Limited ("PTC", which is also the lessor) owns the land titles of the peak tram terminals on the Peak and the foothill. If the private land and the premises for operating peak tramway services are to be mandatorily rented to the new operator, this has to be handled carefully to avoid any infringement of private ownership right. In order to better ensure that the lessor (or the PTC) will suffer any losses due to the Government's policy mistakes, Mr Tony TSE has proposed an amendment, and I give my support to it for the following reasons:

First, under normal circumstances, a business contract should be concluded by both parties through negotiation without the interference of any third party. The proposed mandatory lease arrangement is however a form administrative intervention from a third party. And, the third party provided for in the Bill happens to be the Chief Executive in Council, which is the highest authority. Since the peak tramway is a tourist facility of public concern, the Government may well be pressured by public opinions to get quick results and compel the lessor to accept unreasonable contract terms in the mandatory lease by the original operator. Therefore, the new Ordinance should be written as clearly as possible to ensure the sufficient protection of private ownership right.

Second, the proposed section 11B(8) the Bill provides that the lessee needs to "(a) use the essential premises for the undertaking; and (b) maintain the premises in a condition that is appropriate for use for the undertaking." However, the Bill does not clearly specify one thing. Suppose the lessee taking over the undertaking fails to operate the peak tramway service in accordance with the Ordinance and quits, then who should be responsible for maintenance and restoration if damage of the relevant premises rendering the continuation of the peak tramway service impossible is detected and the new operator is unwilling to bear the responsibility for one reason?

The Mr Tony TSE's amendment is to add item (b) to section 11B(9) to specify that the lessee must compensate the lessor for the latter's loss due to this cause. This is based on protecting the rights and interests of the lessor under the mandatory lease arrangement. This approach is logical and reasonable.

Third, regarding the concept of "essential premises" mentioned in the existing Ordinance, the stipulation of the Bill is not clear. It only states that essential premises "means any land, structure or building that is considered by the Chief Executive in Council to be essential to operating the tramway", but it does not mention the scope of essential premises. The proposed section 11B(9) in the original Bill provides that the lessee must pay rent to the lessor for the essential premises of an amount equal to the open market rent, but as there is no clear definition of "essential premises", the lessor may suffer loss resulting from inappropriate arrangements or allocation regarding the essential premises.

In the proposed section 11B(9)(c), Mr Tony TSE has added a provision that the lessee has to be responsible for the payment of an amount equal to any loss suffered by the lessor due to the mandatory lease arrangement. I think this is reasonable. Imagine if the premises of the PTC were unreasonably forced to be rented under the request of the Government and losses are incurred, naturally the lessee is the person who benefits. It is of course reasonable to recover the losses.

Due to the above reasons, I support the amendment of Mr Tony TSE by adding section 11B(9) which further clarifies the responsibility for compensation.

Chairman, I so submit.