The Food & Environmental Hygiene Department should improve auction procedures for public market stalls to prevent abuse, the Ombudsman says.

The Ombudsman's report on letting of market stalls by auction, released today, found the department's procedures have loopholes for unethical elements to advance their self interests, causing inequity to competitors and to patrons of public markets.

A tenant can set out to outbid competitors to secure nearby stalls, then terminate the tenancy prematurely, thereby eliminating or reducing competition. As stalls vacated shortly after an auction are not auctioned again until three to five months later, the same bidder can repeat such tactics and enjoy a de facto monopoly.

This is unfair to other bidders and particularly to patrons of the market, the Ombudsman said.

Recommendations

The Ombudsman recommended:

* reducing considerably the lead time for preparing for auctions of vacant stalls;

* considering when it will be appropriate to revise the policy for priority to itinerant hawker licence holders in the selection of vacant market stalls;

* reviewing the terms of the tenancy agreement to set a minimum period, within which tenancies could be terminated only on a penalty payment;

* informing bidders of such minimum period and penalty payment for early termination; and,

* keeping proper records on tenants who have applied for premature termination.

For details of the report click here.

Auction rules revised

The department has accepted the recommendations and will introduce next month amendments to tenancy agreements and auction rules to deter bidders with malicious intent.

It will stipulate a minimum tenancy period of three months for market stalls. Tenants will have to pay for rent for three months even if they terminate their tenancies prematurely.

The department will also amend the auction rules. Bidders will not be allowed to take part in open auctions for any stalls in the same market for 12 months if they have twice rented the same stall only up to three months each time within a 12-month period.

Other improvement measures being taken include the shortening of the time to put up vacant stalls for open auctions.

Improved procedures

It has been a standing practice for the department to accord priority in letting public market stalls to those itinerant hawker licence holders willing to surrender their licences. Only those market stalls that remain vacant after this process will go through public auction. As a result, there is a gap of three to five months where the stall may be left vacant before it is put up for public auction.

From this month, new arrangements have been put in place to speed up the procedures. The letting of market stalls to itinerant hawker licence holders will be completed within the first six weeks of each quarter, so vacant stalls not selected by the itinerant hawker licence holders could be released for open auction in the same quarter.

Vacant stalls that have been offered for selection by itinerant hawker licence holders in the past 12 months will be put up for open auction as soon as possible if they become vacant again within that period.

Stressing malpractices concerning letting of public market stalls are not common, the department promised to take every possible means ensure the auction process is fair and efficient.