Gov’t a big spender on rental – but rents cheap to some private owners

CTM building in Taipa

The Legislative Assembly has raised concerns about the government’s high rental costs for buildings hosting public services. Telecom company CTM was also criticized by several legislators.
However, a review of the Official Gazette shows that when it is the landlord, the government can be quite complacent with the rent it charges.
CTM is one good example. In accordance with its concession contract, CTM would rent several facilities and land plots from the government for unusually low fees. According to the information available, for instance, CTM pays MOP78,750 per year in rent for the Barra Station. The CTM building at Rua Pedro Coutinho in Macau central district had a yearly rental fee of MOP20,000 while their lot at the Telecentro in Taipa had a rent of MOP55,510 a year.

Listed in the documents reviewed by MDT is also a rental fee for premises at the Macao Post historic building in Senado Square: MOP1,152,391 per year.
Also included in the fees established by the same contract are other contributions and sewage taxes.
The amounts mentioned are just some examples of rents that seem to have been charged based on valuations below the market rate.
The government’s methodology for setting rental conditions for public utilities and for its own contracts with operators seem to adopt different standards.
Regarding the Companhia de Electricidade de Macau (CEM), take as a simple example the construction of a power substation “in order to ensure the system of power supply to new buildings of Hospital Conde S Januario, as well as a redistribution to the existing substations of the Hotel Lisboa and the zones of the Outer Harbor and New Landfills Outer Harbor (NAPE).”
A plot of land was leased to the company in NAPE area in 2015. This contract required a compensation from CEM of over MOP6.1 million for the use of the area of nearly 2,000 square meters, according to information from the Official Gazette.
Added to this compensation is an annual rental fee for the use of the land of MOP9,324.
Although it is not made clear in the official documents available whether or not a similar initial compensation amount was requested by the government from CTM, it is clear that the method of contracting public utilities changes according to the utility in question.
For other public utilities like water supply services, the information is even scarcer. When it does exist, it is difficult to decipher, as itemized lists of some costs incurred by utility-supplying companies are not mandatorily published in their annual account reports.
Questioned by the Times on the rental fees established for the concession contract with CTM, and about whether such amounts were still up-to-date, the Bureau of Telecommunications Regulation (DSRT) stated: “After checking carried out by employees of this bureau, we inform that the content consulted by you is still in force.”
The Times questioned CTM on the topic of the concession contracts. The telecom operator replied that it couldn’t confirm the information available on the DSRT website.

Gov’t unlikely to disclose deal details on CTM assets

The Secretary for Transport and Public Works, Raimundo do Rosario, announced yesterday that the government and telecommunications company CTM had agreed on the final listing of which assets belong to the company and which ones are actives of the concession and belong to the government. He made the comments as he left a meeting with the Legislative Assembly’s (AL) follow-up committee on the telecommunication services.
Although an agreement was reached, the secretary declined to disclosure details on such a listing saying “at this moment we ca not give that information because I have doubts if we can or not disclose [such information],” Rosario said, cited by TDM, “we will check first if the laws in force allow us to disclose this list,” he added.
The secretary did reveal that he was very happy with the outcome of the negotiations with CTM as well as the progress achieved by the work of the AL committee and the improvements to the network and services done by the company.