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Public-Private Partnership in Housing Management 209 CHAPTER 11 Public-Private Partnership in Housing Management LAU Kai Hung Introduction Through a series of public sector reforms, the government has advocated in recent years greater public-private partnership with a view to improving the effectiveness and efficiency of its services. With reforms driven in such a direction, it is evident that public sector services are now closer to management theories pertinent to the market economy, accountability, corporate governance, business planning, business ownership, costing of services and enhancement of productivity than ever before. Being one of the major public expenditure items with an annual turnover of $10.4 billion and an annual deficit amounting to $1.6 billion, the management of public rental estates is, therefore, an integral part of this reform exercise. This chapter examines the objectives of greater public-private partnership in housing management with reference to the experience of the Hong Kong Housing Authority (HA). Varying degrees of partnership schemes have been introduced in different housing management services such as contracting out of cleansing and security services, letting of management contracts on estates, phased service transfer and transfer of ownership and responsibilities to owners’ corporations. An assessment is therefore made on the effectiveness of various partnership schemes and the extent to which they have met the policy objectives. With these partnership schemes getting momentum, an attempt is also made to examine the future roles played by housing management professionals in the public and private sectors. Greater public-private partnership It is indeed not difficult trace the government’s position to go for greater private sector participation in housing provision and services. In late 2000 to early 2001, 210 Lau Kai Hung the government had on many occasions clarified its position on the property market. A speech delivered by the then Financial Secretary, Mr Donald Tsang,1 on 23 November 2000 reiterated the following two important points regarding greater public-private partnership in the provision of housing services: We are not trying to bring prices down. We are not trying to prop the market up. Nor are we trying to put a cap on profits. Our aim is simply to avoid a repetition of the unhealthy volatility prevalent in the market place in recent times … … Historically, the public and private sectors have contributed 60% and 40% of all new production respectively. Ideally, in an open economy such as ours, the shares would be different, with the private sector providing more and the public less. In the past, that has not been possible because of the huge fluctuations in demand result from uneven migration and land production. With migration and land production now more stable, it should be possible for the private sector to take a larger share … It has long been government policy to follow through its well established positive non-intervention policy2 since the early 1970s. Public sector reform has already been in place to gear up for the change in many government departments. The market economy principles3 now widely adopted throughout China and the rest of the world are no doubt the driving force for getting even more private sector resources and expertise in providing assisted housing opportunities to needy families and in the delivery of housing services. People in different parts of the world are expecting their governments to be small and efficient. International housing experience with private sector involvement (PSI) To make reference to international experiences in this respect is an important step. Before the HA embarked on greater PSI in its estate management and maintenance services in late 1999, it had engaged consultants in 1998 to examine the ways the HA operated and the related costs to: 1. His speech on the Hong Kong Property Market was delivered at the Concordia Hong Kong Foundation Fund Raising Dinner on 23 November 2000. 2. Prior to the 1970s, Hong Kong adopted a laissez faire approach to sustain its economic development. Laissez faire is a principle of free trade among business. After the 1970s, the government started to adhere to the positive non-intervention policy to replace the laissez faire approach. Rather than adopting a “hands off” policy, the government would regulate the foreign exchange market, put in place some guidance and even legal constraints to ensure the efficient operation of market forces, etc. (Miners,1986) 3. Market economy is considered as a system of efficient resource allocation involving the interaction of buyers and sellers for goods and services. Market economies are classified by [18.216.186.164...

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