FINANCE COMMITTEE
Record of Meeting held on 2 February 1996 at 2:30 p.m.
in the Legislative Council Chamber
Present:
Dr Hon YEUNG Sum (Chairman)
Hon Mrs Elizabeth WONG CHIEN Chi-lien, CBE, ISO, JP (Deputy Chairman)
Hon Allen LEE Peng-fei, CBE, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, OBE, JP
Hon Martin LEE Chu-ming, QC, JP
Hon NGAI Shiu-kit, OBE, JP
Hon SZETO Wah
Hon LAU Wong-fat, OBE, JP
Hon Edward HO Sing-tin, OBE, JP
Hon Mrs Miriam LAU Kin-yee, OBE, JP
Dr Hon Edward LEONG Che-hung, OBE, JP
Hon Albert CHAN Wai-yip
Hon CHEUNG Man-kwong
Hon CHIM Pui-chung
Hon Frederick FUNG Kin-kee
Hon Michael HO Mun-ka
Dr Hon HUANG Chen-ya, MBE
Hon Emily LAU Wai-hing
Hon LEE Wing-tat
Hon Eric LI Ka-cheung, JP
Hon Fred LI Wah-ming
Hon James TO Kun-sun
Dr Hon Samuel WONG Ping-wai, MBE, FEng, JP
Dr Hon Philip WONG Yu-hong
Hon Howard YOUNG, JP
Hon Zachary WONG Wai-yin
Hon Christine LOH Kung-wai
Hon James TIEN Pei-chun, OBE, JP
Hon LEE Cheuk-yan
Hon CHAN Kam-lam
Hon CHAN Wing-chan
Hon Andrew CHENG Kar-foo
Hon CHENG Yiu-tong
Dr Hon Anthony CHEUNG Bing-leung
Hon CHEUNG Hon-chung
Hon David CHU Yu-lin
Hon Albert HO Chun-yan
Hon IP Kwok-him
Hon LAU Chin-shek
Hon Ambrose LAU Hon-chuen, JP
Dr Hon LAW Cheung-kwok
Hon LAW Chi-kwong
Hon LEE Kai-ming
Hon LEUNG Yiu-chung
Hon Bruce LIU Sing-lee
Hon MOK Ying-fan
Hon Margaret NG
Hon NGAN Kam-chuen
Hon SIN Chung-kai
Hon TSANG Kin-shing
Dr Hon John TSE Wing-ling
Absent:
Dr Hon David LI Kwok-po, OBE, LLD, JP
Hon Ronald ARCULLI, OBE, JP
Hon Henry TANG Ying-yen, JP
Hon CHAN Yuen-han
Hon Paul CHENG Ming-fun
Hon CHOY Kan-pui, JP
Hon LO Suk-ching
Hon Lawrence YUM Sin-ling
In attendance for specific items:
Mr H S KWONG, JP
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Secretary for Works
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Mr Billy LAM, JP
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Director, New Airport Projects Co-ordination Office
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Mr Bernard LAM, JP
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Director of Civil Engineering
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Mr H K WONG
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Project Manager, New Airport Projects Co-ordination Office
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Mr M J T ROWSE
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Deputy Secretary for the Treasury (2)
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Mr Leo KWAN, JP
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Deputy Secretary for Economic Services
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Ms Susan A LUKE
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Principal Assistant Secretary for Economic Services
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Mr Mike STONE, JP
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Deputy Secretary for the Civil Service
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Mr Dick SIEGEL, JP
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Director of Civil Aviation
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Dr Henry TOWNSEND
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Chief Executive Officer, Airport Authority
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Ms Sophia KAO
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Human Resources Director, Airport Authority
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Mrs E M BOSHER, JP
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Director of Administration, Airport Authority
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Mr John COLLIER, JP
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Deputy Secretary for Works
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Dr A W MALONE, JP
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Principal Government Geotechnical Engineer of Civil Engineering Department
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Mr Herbert LEUNG
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Government Land Agent of Lands Department |
In attendance:
Mr K C KWONG, JP
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Secretary for the Treasury
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Mr Alan LAI, JP
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Deputy Secretary for the Treasury (1)
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Mrs Lilian WONG
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Principal Executive Officer (LegCo Unit), Finance Branch
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Miss Pauline NG
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Clerk to the Finance Committee
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Mr Andy LAU
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Chief Assistant Secretary (Finance Committee)
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Mr Simon CHEUNG
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Senior Assistant Secretary (Special Duties) |
Item No. 1 - FCR(95-96)114
RECOMMENDATIONS OF THE PUBLIC WORKS SUBCOMMITTEE ON NON-AIRPORT CORE PROGRAMME
The Committee approved this item.
Item No. 2 - FCR(95-96)115
CAPITAL WORKS RESERVE FUND
HEAD 702 - PORT AND AIRPORT DEVELOPMENT
AIR AND SEA COMMUNICATIONS - SUPPORT
8AG - New Airport Works Project Management Phase IV
2. Dr Philip WONG Yu-hong declared an interest as a Member of the Airport Authority (AA).
3. Members noted that this proposal was submitted to the Finance Committee (FC) for consideration on 19 January 1996 (vide FCR(95-96)112) and was voted down because of Members queries on the progress and extent of technology transfer and the calculation of consultancy fees. Additional information in this respect had been included in this paper.
4. In response to a Members question on what other benefits the Government could acquire apart from those mentioned in paragraph 7 of the paper, the Director, New Airport Projects Co-ordination Office (D/NAPCO) said that the process in the commissioning of the new airport would be another important aspect of knowledge which Government officers could learn from the consultants. Staff from NAPCO and other departments would benefit from the technology transfer. The completion of a major infrastructure project within a short span of time was in itself a very valuable experience which could be applied to future large-scale projects in Hong Kong.
5. D/NAPCO added that the overnight transfer of an airport from Kai Tak to Chek Lap Kok was a new experience for Hong Kong and several of the consultants had extensive experience and expertise in this area. The task was unprecedented in Hong Kong and NAPCO needed their expertise and support in completing the work.
6. A Member asked whether Hong Kong could rely on the acquired knowledge and experience in tackling similar projects in future, such as the building of the second runway, without relying on outside consultants. The Secretary for Works (S for W) explained that outside consultants were normally engaged when Government did not have the requisite knowledge and expertise or the necessary manpower to implement a project. Whether Government would need to hire consultants to assist in completing future major projects would depend on the nature of the projects and the completion time-frame. Nevertheless, the knowledge and experience gained in managing the Airport Core Programme (ACP) would definitely be of great help to the management of other construction works such as the building of the western corridor railway.
7. Members noted that the salaries for the professionals and supporting staff in this proposal were much higher than those set out in paper FCR(95-96)117 which would also be considered by the Committee at this meeting. In the present proposal, apart from salaries which were several times higher than those performing comparable jobs elsewhere, provisions were also made for other payments, such as office set-up, overheads and profits. It would appear from the information papers FCRI(95-96)6 and FCRI(95-96)8 issued to Members in 1995 on the Estimation of Consultancy Fees that when the multiplying factor of 2.52 was applied, all overhead expenses would have already been covered. The estimated consultancy fees in the present paper were therefore questionable and excessively high.
8. D/NAPCO explained that the consultants engaged for the ACP were international experts renowned for the construction and commissioning of airports, and the fees payable for their service were inevitably higher than those in some other consultancies. A package approach was adopted in engaging these consultants and their supporting staff, and their employment had gone through tendering procedures. Apart from serving as consultants, these professionals also worked as part of the integrated team in NAPCO with other government officers. All in all, the employment of the consultants was good value for money having regard to the nature of their employment. The Secretary for the Treasury (S for Tsy) added that the $298 million was in money of the day prices and an inflation allowance had been included in estimating the consultancy fees apart from applying a multiplying factor.
9. In response to a Member, S for Tsy and S for W assured Members that consultants would only be employed on a need basis and a balance would be maintained in engaging outside consultants and employing government staff. Project management teams similar to that of the NAPCO would be set up when building the western corridor railway and the Mass Transit Railway Tseung Kwan O extension. D/NAPCO affirmed that the ACP was progressing very well and stringent cost control had been implemented effectively. He would personally ensure that high calibre and well qualified management consultants would be engaged to continue to provide management consultancy for Phase IV of the ACP.
10. Members voted on the proposal and a division was claimed. The result was: 29 Members voted for the proposal; 18 against and 1 abstained.
Ayes:
Hon Allen LEE Peng-fei
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Hon Mrs Selina CHOW LIANG Shuk-yee
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Hon NGAI Shiu-kit
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Hon LAU Wong-fat
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Hon Edward HO Sing-tin
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Hon Mrs Miriam LAU Kin-yee
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Hon CHIM Pui-chung
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Hon Frederick FUNG Kin-kee
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Hon Emily LAU Wai-hing
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Dr Hon Samuel WONG Ping-wai
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Dr Hon Philip WONG Yu-hong
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Hon Howard YOUNG
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Hon Christine LOH Kung-wai
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Hon James TIEN Pei-chun
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Hon CHAN Kam-lam
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Hon CHAN Wing-chan
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Hon CHENG Yiu-tong
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Hon CHEUNG Hon-chung
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Hon David CHU Yu-lin
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Hon IP Kwok-him
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Hon Ambrose LAU Hon-chuen
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Dr Hon LAW Cheung-kwok
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Hon LEE Kai-ming
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Hon LEUNG Yiu-chung
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Hon Bruce LIU Sing-lee
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Hon MOK Ying-fan
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Hon Margaret NG
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Hon NGAN Kam-chuen
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Hon Mrs Elizabeth WONG CHIEN Chi-lien
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(29 Members)
Nos:
Hon Martin LEE Chu-ming
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Hon SZETO Wah
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Dr Hon Edward LEONG Che-hung
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Hon Albert CHAN Wai-yip
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Hon CHEUNG Man-kwong
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Hon Michael HO Mun-ka
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Dr Hon HUANG Chen-ya
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Hon LEE Wing-tat
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Hon Fred LI Wah-ming
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Hon James TO Kun-sun
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Hon Zachary WONG Wai-yin
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Hon Andrew CHENG Kar-foo
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Dr Hon Anthony CHEUNG Bing-leung
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Hon Albert HO Chun-yan
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Hon LAW Chi-kwong
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Hon SIN Chung-kai
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Hon TSANG Kin-shing
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Dr Hon John TSE Wing-ling |
(18 Members)
Abstention:
(1 Member)
11. The Committee approved this item.
Item No. 3 - FCR(95-96)116
HEAD 28 - CIVIL AVIATION DEPARTMENT
Subhead 700 General other non-recurrent
New item Ex-gratia payments to staff in Airport Management Division upon abolition of offices
12. Dr Philip WONG Yu-hong declared an interest as a Member of the AA.
13. Members noted that this item was a resubmission for a commitment of $19.2 million for ex-gratia payments to staff in the Airport Management Division (AMD) upon abolition of offices on the closure of the Kai Tak Airport in April 1998. This item was discussed at the FC meeting on 5 January 1996 and was voted down. The Administration subsequently briefed the LegCo Panel on Public Service on 22 January 1996.
14. A Member stated that there should be consistency of approach and standards in tackling redundancy cases with particular reference to Hospital Authority staff who were denied abolition-of-office terms and were not given any ex-gratia payment. In reply to her questions, the Deputy Secretary for the Civil Service (DS/CS) said that in the case of the Hospital Authority, there was no question of abolition of office. When determining the arrangements, Government would have to look at the circumstances of each case. For example, the extent of the cutting back of activities, resulting in reduction of existing posts or complete taking-over by outside bodies could be different, and different arrangements would have to be adopted. In the case of wholly funded subvented bodies such as the Hong Kong Institute of Education, Vocational Training Council and the Hospital Authority, terms such as mixed service pension or continued employment under civil service terms could be used. But for privatisation exercises where the organisation would operate on prudent commercial principles, it would no longer be appropriate for civil service terms to continue to apply. Under the circumstances, the posts would have to be deleted, and abolition of office terms would have to be offered to the affected staff.
15. Members of the Liberal Party pointed out that Members concern was more on the need to grant the ex-gratia payment if further employment was guaranteed. The current paper had provided more information in this respect, but Members were yet to be convinced if the proposed level of compensation was appropriate. A Member suggested that those joining the AA would actually be doing the same jobs. If ex-gratia payment were to be granted just because staff had to work in a new environment or workplace, there might be implications on the private sector which would seize it as an opportunity to seek compensation in similar situations. Another Member asked if the proposed ex-gratia payment for those who would be further employed by AA could be reduced to three months salary.
16. In response, the Administration explained that in the present case, the posts in AMD would be deleted and the abolition-of-office terms would have to apply. All staff should therefore be entitled to the same abolition-of-office terms, and those who would be joining the AA should not be penalised. The proposed abolition of office terms had in fact been used since 1991. The terms were therefore not tailored for the AMD staff. The current staffing arrangements were proposed after lengthy discussion between the Administration and the AA, and in consultation with the AMD staff. The smooth opening of the new airport was very important to Hong Kongs economy and the Administration had to ensure that the AMD staff would continue to serve the Kai Tak Airport up to April 1998 and the AA would be able to absorb as many local experienced staff as possible to run the new airport. The Administration also reiterated that it was not the first time that this type of ex-gratia payment was granted, but there was no indication that workers in the private sector had asked for the same arrangements to apply to the private sector.
17. As to whether civil service terms were far too favourable and a review on the current policy on the abolition of office was necessary, DS/CS explained that he had already briefed the LegCo Panel on Public Service on the subject. The Civil Service Branch had always kept the civil service pay package under vigilant review. Besides, the Standing Commission on Civil Service Salaries and Conditions of Service also carried out a survey on civil service benefits each year to ensure that the civil service pay package was comparable with that of the private sector.
18. Members of the Democratic Party stressed that when the subject was discussed at the Public Service Panel, Members had considered that there should be a clear policy on abolition of office, particularly on the circumstances in which the policy would apply. They also stressed that the AMD staffing arrangements should not be taken as a precedent for other cases.
19. The item was put to vote and a division was claimed. The result was: 37 Members voted for the proposal, six against and one abstained.
Ayes:
Hon Martin LEE Chu-ming
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Hon SZETO Wah
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Hon Albert CHAN Wai-yip
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Hon CHEUNG Man-kwong
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Hon Frederick FUNG Kin-kee
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Hon Michael HO Mun-ka
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Dr Hon HUANG Chen-ya
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Hon Emily LAU Wai-hing
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Hon LEE Wing-tat
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Hon Fred LI Wah-ming
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Hon James TO Kun-sun
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Dr Hon Samuel WONG Ping-wai
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Dr Hon Philip WONG Yu-hong
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Hon Zachary WONG Wai-yin
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Hon Christine LOH Kung-wai
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Hon LEE Cheuk-yan
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Hon CHAN Kam-lam
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Hon CHAN Wing-chan
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Hon Andrew CHENG Kar-foo
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Hon CHENG Yiu-tong
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Dr Hon Anthony CHEUNG Bing-leung
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Hon CHEUNG Hon-chung
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Hon CHOY Kan-pui
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Hon David CHU Yu-lin
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Hon IP Kwok-him
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Hon LAU Chin-shek
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Hon Ambrose LAU Hon-chuen
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Dr Hon LAW Cheung-kwok
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Hon LAW Chi-kwong
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Hon LEE Kai-ming
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Hon LEUNG Yiu-chung
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Hon Bruce LIU Sing-lee
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Hon MOK Ying-fan
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Hon Margaret NG
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Hon NGAN Kam-chuen
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Dr Hon John TSE Wing-ling
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Hon Mrs Elizabeth WONG CHIEN Chi-lien
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(37 Members)
Nos:
Hon Allen LEE Peng-fei
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Hon Mrs Selina CHOW LIANG Shuk-yee
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Hon LAU Wong-fat
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Hon Edward HO Sing-tin
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Dr Hon Edward LEONG Che-hung
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Hon James TIEN Pei-chun |
(6 Members)
Abstention:
(1 Member)
20. The Committee approved this item.
Item No. 4 - FCR(95-96)117
HEAD 43 - CIVIL ENGINEERING DEPARTMENT
Subhead 700 General other non-recurrent
New item Statutory control of the geotechnical aspects of private slopes and developments
21. Members questioned the adoption of different multiplying factors in calculating the consultancy fees in FCR(95-96)117 and in FCR(95-96)118. In reply, the Deputy Secretary for Works explained that a factor of 2.5 was used in the former proposal as the consultant would be accommodated in Government offices during the consultancy. In the latter case, the consultant would have to work in their own offices and a factor of 3.0 was used. The Administration was aware that different formulae had been used in estimating consultancy fees. In order that a uniform standard would be used, a circular would soon be issued to require that a factor of 2.1 should be used for site staff, 2.5 for consultants working in government offices and 3.0 for those working in their own offices. The multiplying factor should be applied to the mid-point salaries of the comparable ranks in the civil service.
22. Members pointed out that the explanation given by the Administration was not consistent with the information provided in the earlier Information Notes on consultancy fees and asked if the standard factor of 2.5 could be used for both papers. Members agreed that in the event that the outcome of the tender exercise for FCR(95-96)118 indicated that the 2.5 factor was unrealistic and a larger factor should apply, a separate submission could be put to FC for supplementary commitment. In response, S for Tsy agreed to use the factor of 2.5 for both papers, and to adjust the commitment for FCR(95-96)118 accordingly. He also advised Members that a paper on this subject would be presented to the relevant LegCo committee and copied to Members of the FC.
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23. The Committee approved proposal FCR(95-96)117.
Item No. 5 - FCR(95-96)118
HEAD 43 - CIVIL ENGINEERING DEPARTMENT
Subhead 700 General other non-recurrent
Systematic identification of maintenance responsibility of slopes in the territory
24. In view of the discussions under the preceding item, S for Tsy revised the commitment being sought in the paper from the original $70.8 million to $59 million to take account of the reduction in the consultancy fees estimate on using a multiplying factor of 2.5.
25. The Committee approved this item.
Item No. 6 - FCR(95-96)119
MEMBERSHIP OF ESTABLISHMENT SUBCOMMITTEE AND PUBLIC WORKS SUBCOMMITTEE
26. The Committee approved this proposal.
27. The Committee was adjourned at 4:55 p.m.
Legislative Council Secretariat
26 March 1996
Last Updated on 27 November 1998