Ng Fung Hong - the current operator of the Sheung Shui Slaughterhouse - has been awarded a new contract to operate and manage it, the Food & Environmental Hygiene Department says.

The new agreement will have an initial term of four years beginning August 1, with an option for the Government to offer no more than two three-year extensions, subject to the operator's satisfactory performance.

To improve the slughterhouse's operation and management, some enhancements have been incorporated in the contract's terms.

The operator must ensure maximum use of lairage facilities - temporary livestock keeping places - in a cost-effective manner, and allocate spaces to all users of the slaughterhouse services and facilities on a non-discriminatory basis.

The operator must admit live food animals and allocate spaces on a first-come-first-served basis, and to levy lairage and related fees and charges on the basis of the number of admitted live food animals and the hours they use the space.

The operator may levy different levels of fees and charges depending on the arrival hours and duration of stay of live animals. Any change to fees and charges the operator proposes will be subject to the Government's prior approval.

The operator must also provide information and records to the Government to facilitate monitoring of its performance.

The new contract will provide a system of sanctions and incentives to motivate the operator to improve and excel. During the contract period, the operator will be financially sanctioned for breaches of contract terms and rewarded for service enhancements with tangible benefits.

According to the new contract, the operator must pay $7 million to the Government every quarter for the right to operate the slaughterhouse, or 14.5% of the gross income received in the relevant preceding three months of business, whichever is higher.