Neither fish nor fowl

The one-year old watchdog in charge of supervising publicly funded companies and autonomous funds is generating mixed views, as it is taking time to yield results other than the guidelines on disclosure of corporate information.

A year ago when the government proposed to set up the Public Assets Supervision and Planning Office (GPSAP) to oversee the publicly funded firms and public autonomous funds commentators promply raised a question: could this newly established unit achieve its goals? A year later the doubts continue, if not more, with the hard-hitting report recently published by the Commission of Audit (CA).

“I, frankly, have not had any expectation for GPSAP, which seems to be set up just for a particular person that is yet to retire,” says lawmaker Au Kam San, referring to Sonia Chan Hoi Fan, who had stepped down from the position of the secretary for administration and justice to head this new central unit, which now oversees 14 firms that the authorities have a stake of 50 percent and more each, eight companies that the government has less than 50 perce interests each, and 21 public autonomous funds. Before GPSAP, the five government secretaries were tasked to oversee the publicly funded firms and funds in their respective fields, alongside with the help of the Financial Services Bureau.

Since the inception of the GPSAP, the goal of the government with regards to supervising publicly funded firms has been to ensure that they comply with the rules rather than to actively “review the effectiveness of the investments” the firms have made, the non-establishment lawmaker points out. Talking about Macau Investment and Development Limited (MID) — which was criticised by the audit watchdog in a report published in December for ‘unnecessarily’ costing the public coffers ‘tens of billions’ without making wise investment decisions — he notes that it is “a typical example” of the problems that publicly funded firms have here.

Though GPSAP could establish more rules to oversee MID, which was set up in 2011 to develop a traditional Chinese medicine industrial park in Hengqin with the Guangdong authorities, the problem is that public firms are usually run by officials. “Do they know how to run a business?” asks Mr. Au, who also casts doubts on whether GPSAP has the necessary expertise to review the effectiveness and efficiency of the investments made by the public firms. 

A possible solution is the one which the pro-democracy legislators have advocated for years: giving the Legislative Assembly power to discuss — unlike the legislature in nearby Hong Kong that can veto or approve — major investments made by government departments and publicly funded firms. “The entities will have to explain [to the Legislative Assembly] the goals and the efficiency of the investments, and how much time they will last… and the public could also help assess the investments [via the legislature],” Mr. Au says

“Do they know how to run a business?” lawmaker Au Kam San questions the expertise of those running the publicly-funded firms

Sonia Chan Hoi Fan

In phases

GPSAP was officially set up in December 2019, when the government led by Chief Executive Ho Iat Seng took office. In operation for about a year, the major work this new unit has done was the implementation in June of a guideline for publicly-funded companies to publicise information, including annual reports, shareholder structure, board structure and other basic information.  

“At present, publicly funded firms here do not have a uniform mechanism for supervision, efficiency assessment, and remuneration [for board members]… so the reform on the public assets supervision should be carried out in phases,” said Ms. Chan, head of GPSAP, in December in a public event. “We have to first review the assets… and straighten out the functions [of the firms], before gradually establishing a legal framework to oversee the activities of publicly funded companies before, during and after making investments.”

Publicly-funded companies are run like private companies at the moment, subject to the Commercial Code and relevant rules, and one of the major missions GPSAP is tasked with is to draft a separate legal framework for these enterprises. What the new unit has worked on in the past year was just the preliminary work for the formulation of such rules.

“But given the lack of a specific legal framework [for publicly funded firms], it is difficult to ensure their operational efficiency and the appropriate usage of public coffers at the moment,” says legislator Ella Lei

Audit help

Addressing the lack of significant achievements by GPSAP in the first year of operation, besides the guideline, another directly-elected lawmaker Ella Lei Cheng I, from the Federation of Trade Unions, acknowledges the unit is just gradually carrying out the tasks. “The information transparency about the publicly-funded companies have enhanced following the establishment of GPSAP,” she says. “But given the lack of a specific legal framework [for these firms], it is difficult to ensure their operational efficiency and the appropriate usage of public coffers at the moment.”

Besides the hard-hitting report on MID, the audit watchdog also released last year another scalding report on Macau International Airport Co. Ltd (CAM) — the operator of the Macau International Airport in which the government has nearly a 67-percent stake — showcasing the “unwise decision making process and the lack of overseeing” among these firms, the legislator notes. “Thus, the Commission of Audit should continue undertaking investigative reports on these publicly funded companies, not only focusing on their management practice but also the efficiency of their investments,” she reasons.

While GPSAP is preparing the legal framework, it could clearly state the obligation of government representatives in these firms in the meanwhile, as well as ensuring they have the relevant expertise before being assigned in these positions, Ms. Lei notes, adding there should also be a guideline for capital injection into these companies and indicators to assess the short-to-long-term efficiency of their investments.


According to the financial information lately unveiled by the government, as of end-2019, it has invested over MOP15.68 billion in the publicly-funded firms here. For MID alone, the capital injection from the government totalled over MOP9.2 billion between 2011 and 2019.

In the perspective of scholar-cum-legislator Agnes Lam Iok Fong, the government should have a clearer mind about what should be done by the private sector and the public sector. Using MID as an example, she says: “As highlighted by the CA report, what MID has done did not bear any differences to what government departments do: drafting a budget for a task and using up everything. But what a company should do is striving for a profit — if not at least a balanced finance sheet — in consideration of factors like investment returns and efficiency.” In the case of MID, she suggests the government and MID should just be an administrator for the TCM industrial park, while different operations of the park should be commissioned to private third parties instead.

“The government should not just simply use the mindset of public service to run a [publicly funded] firm,” she added.