LegCo Paper No. FC 11/96-97

FINANCE COMMITTEE

Minutes of the proceedings of the Meeting held on
12 July 1996 at 2:30 p.m. in the Legislative Council Chamber

Members Present :

Members Absent :

Public Officers Attending :

Ms Alice TAI, JP: Judiciary Administrator
Mr Nicholas YEK: Deputy Judiciary Administrator
Mr Alan DIXEY: Chief Systems Manager of Information Technology Services Department
Mr HUI Kai-ling: Senior Systems Manager of Information Technology Services Department
Mrs Regina IP, JP: Director-General of Industry
Ms Annie CHOI: Assistant Director-General of Industry
Mr H S KWONG, JP: Secretary for Works
Mr LEUNG Cham-tim, JP: Director of Electrical and Mechanical Services
Mr P G WINDER, JP: Development Manager of Electrical and Mechanical Services Department
Mr Gordon LEUNG: Principal Assistant Secretary for Security
Mr CHEUK Koon-cham, JP: Deputy Director of Immigration
Mr Stanley WONG: Principal Assistant Secretary for Planning, Environment and Lands
Dr E G PRYOR, JP: Principal Government Town Planner of Planning Department
Ms Brenda AU: Senior Town Planner of Planning Department
Mr C C LAY: Assistant Director of Agriculture and Fisheries
Mr M J STOKOE: Director of Environmental Protection
Mr Elvis AU: Principal Environmental Protection Officer of Environmental Protection Department
Mr Kenneth CHAN, JP: Director of Architectural Services
Mr Clement CHEUNG: Principal Assistant Secretary for Health and Welfare
Dr FUNG Hong: Deputy Director (Hospital Planning and Development) of Hospital Authority

In Attendance :

Mr K C KWONG, JP: Secretary for the Treasury
Mr Kevin HO, JP: Deputy Secretary for the Treasury
Mrs Lilian WONG: Principal Executive Officer (General), Finance Branch
Miss Pauline NG: Clerk to the Finance Committee
Mrs Constance LI: Chief Assistant Secretary (Finance Committee)

Item No. 1 - FCR(96-97)37
RECOMMENDATIONS OF THE PUBLIC WORKS SUBCOMMITTEE ON NON-AIRPORT CORE PROGRAMME

The Committee approved the proposal.

Item No. 2 - FCR(96-97)40
CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Judiciary
New Subhead "Re-development of Case and Summons Management System for Magistracies"

2. Responding to a members questions on the benefits to be achieved by the re-development of the computer system, the Judiciary Administrator (JA) advised that the existing Case and Summons Management System (CASEMAN) would be re-developed to enable the production of bilingual court documents such as summonses, letters, warrants and notices for magistracies. While the existing system could only give Chinese translation for certain standard texts like offence descriptions, the new system would enable other information such as the particulars of the defendants and the place of offence, etc. to be entered in Chinese, apart from English. As a result, the full text of court documents could be produced in Chinese. Furthermore, the new system would be capable of interfacing more efficiently with the computer systems at prosecution agencies, such as the Formation Information Communal System of the Police, enabling electronic transfer of information, thereby eliminating duplication of effort in data entry by Judiciary and the prosecuting agencies. The new system would also improve the operational efficiency of magistracies in a number of areas, including the payment procedures at the accounts offices.

3. Concerning the positive impact of the system on the use of Chinese in courts in Hong Kong, JA advised that the proposed system was part of the overall efforts of the Judiciary in providing a framework to facilitate the use of Chinese in judicial proceedings. While the new CASEMAN system would have no direct implications on the use of Chinese or translation/interpretation requirements for court trials, the systems capability to integrate with some other information systems in Judiciary and prosecution agencies would enable an interchange of information in both English and Chinese. The implementation of the new system would save the Judiciary and other government departments the need to create some additional 50 posts for the production of bilingual court documents.

4. In reply to a member, the Senior Systems Manager of the Information Technology Services Department (ITSD) clarified that when the existing system was designed in 1991, the Chinese software then available on the market was not yet capable of meeting the present-day requirements, hence the need for upgrading. JA added that the existing system would have served its useful life span of five years when the new system was put into operation. She further advised that new features such as the Chinese writing pen would be included in the new system to make the operation of the system easier for junior clerical staff.

5. Replying to a member, the Chief Systems Manager of ITSD advised that the cost estimates for hardware and software would be approximately $9.4 million and $5.1 million respectively, and that the software would be developed in-house.

6. The Committee approved the proposal.

Item No. 3 - FCR(96-97)41
HEAD 73 - INDUSTRY DEPARTMENT
New Capital Account Subhead "Services Support Fund"

7. On the Task Force on Services Promotion mentioned in the paper, the Secretary for the Treasury (S for Tsy) clarified that the Task Force comprised professionals and experts from various industries and tertiary institutions and that its major function was to advise the Financial Secretary on measures to be taken by the Government to promote the service industry in Hong Kong. The Task Force was not intended to be a permanent establishment, and the Government was reviewing the mode of operation of this body.

8. Several members raised questions on the administration of the proposed Services Support Fund, such as the eligibility criteria for grants and loans, the approval and evaluation mechanism, and the proposed ceiling of funding support for an individual project. In response, the Director-General of Industry (DG of I) advised that the implementation details would be formulated by an advisory body to be set up for the purpose. In general, funds would be allocated to non-profit making projects which were considered to be beneficial to the development of Hong Kongs service industry. Each application would be required to set out project deliverables for evaluation purpose and the research findings must be disseminated to relevant sectors for their use. Subject to the views of the future advisory body, no funding ceiling would be set for individual projects as the amounts to be allocated would depend on the nature of the projects and the number of applications received. Should there be a need for additional funding, the Industry Department would discuss with the relevant policy branches.

9. Responding to a members question on the definition of non-profit making projects, DG of I clarified that the organisations concerned must not make profits out of the projects; and the research findings should be able to benefit a particular sector or the service industry as a whole. If the project generate profits for the organisation, the profits would be deducted from the funds allocated for it from the outset. DG of I stressed that the objective of the Fund was to encourage creation and dissemination of knowledge for the benefit of the service industry.

10. Some members were concerned that some public-funded organisations such as the Trade Development Council and tertiary educational institutions, rather than the infant industries, would have the lion share of the Fund. In reply, DG of I advised that the projects to be funded under this scheme should not duplicate those projects already financed by other sources. Subject to the approval for the establishment of the Fund, an advisory body would be set up to advise Government on the selection criteria, and the priorities of projects to be supported by the Fund. At the request of the Chairman, DG of I undertook to provide further information to the LegCo Panel on Trade and Industry on the specific implementation plans of the scheme in due course.

11. On the scope of projects to be funded, DG of I advised that the intention was to cover the whole service industry including hotel and catering, import and export trading, transport and communications, financial and banking, construction and property and other professional services. To illustrate, S for Tsy gave the example of a benchmarking project aimed at educating the trade on international standards and practices of high quality services.

12. Some members expressed doubts on the need to create three non-directorate posts costing $2.4 million a year to administer the $50 million Fund. In response, DG of I confirmed that the three additional posts of one Principal Trade Officer, one Assistant Trade Officer I and one Clerical Officer II would be required to provide secretarial support to the scheme. These officers would be involved in the promotion of the scheme, vetting of applications and monitoring progress of the projects approved.

13. The proposal was put to vote and approved. Mr CHENG Ming-fun and Miss Emily LAU indicated reservations on the proposal.

Item No. 4 - FCR(96-97)42
HEAD 73 - INDUSTRY DEPARTMENT
Subhead 840 Industrial support (block vote)

14. Members were generally in support of the proposal to establish a Manufacturing Technology Centre for Human Vaccines and Pharmaceuticals. Several members were of the view that the Government should have an overall strategy for supporting the local pharmaceutical industry to manufacture high value-added products, including providing the necessary facilities, encouraging exports and attracting overseas investment.

15. In response, DG of I advised that the Government had adopted a pro-active approach to encourage and support the industry of Hong Kong. In addition to the efforts made by the Industrial Promotion Unit of the Industry Department and the Overseas Economic and Trade Offices, senior officials including DG of I also paid regular overseas visits to promote Hong Kongs industries and to encourage trade and investments in Hong Kong. The pharmaceutical industry was one of the target industries given support. DG of I considered that Hong Kongs competitive edge lay in its quality staff which were essential to pharmaceutical research. As the production process was neither labour nor land intensive, the support required would be to develop the necessary facilities to enable the manufacturers to comply with the Hong Kong Good Manufacturing Practices Guidelines and to expand its product line to include high value-added pharmaceutical products. The proposed Centre was to achieve this objective.

16. Responding to a members concern about a recent incident that some small pharmaceutical manufacturing companies failed to obtain sites in the industrial estates, the Hon Edward HO, Chairman of the Hong Kong Industrial Estates Corporation, clarified that as small sites were not available in the industrial estates, these companies had been advised to combine themselves into a group of companies of the same trade for the purpose of seeking a larger site for building a complex of its own. Apparently, due to complications over the financing and legal titles of the building, the matter was still under deliberation.

17. As regards whether studies on Chinese medicine would also be undertaken by the Centre, DG of I advised that the Centre would likely focus on human vaccines and biopharmaceutical products. However, the Industrial Support Fund had separately financed four projects on Traditional Chinese Medicine. She believed these projects would help develop Chinese medicine manufacturing in Hong Kong.

18. In reply to a member, DG of I advised that the research findings of the staff employed by the Centre would be the Centres property, and this would be clearly stated in the relevant documents.

19. On the cashflow requirements of the proposed Centre, the Assistant Director-General of Industry clarified that the Centre was expected to become self-sufficient after three years; hence from 1999, the Centre would be able to meet all its operating expenses including utilities and rates.

20. The proposal was approved by the Committee.

Item No. 5 - FCR(96-97)43
HEAD 46 - GENERAL EXPENSES OF THE CIVIL SERVICE
New Recurrent Account Subhead "Recoverable salaries and allowances (Electrical and Mechanical Services Trading Fund)"
HEAD 25 - ARCHITECTURAL SERVICES DEPARTMENT
HEAD 28 - CIVIL AVIATION DEPARTMENT
HEAD 30 - CORRECTIONAL SERVICES DEPARTMENT
HEAD 34 - INTERNAL SECURITY : MISCELLANEOUS MEASURES
HEAD 37 - DEPARTMENT OF HEALTH
HEAD 42 - ELECTRICAL AND MECHANICAL SERVICES DEPARTMENT
HEAD 45 - FIRE SERVICES DEPARTMENT
HEAD 51 - GOVERNMENT PROPERTY AGENCY
HEAD 80 - JUDICIARY
HEAD 100 - MARINE DEPARTMENT
HEAD 122 - POLICE : ROYAL HONG KONG POLICE FORCE
HEAD 177 - SUBVENTIONS : NON-DEPARTMENTAL PUBLIC BODIES
HEAD 186 - TRANSPORT DEPARTMENT
CAPITAL INVESTMENT FUND
HEAD 972 - TRADING FUNDS
New Subhead "Loan to Electrical and Mechanical Services Trading Fund"

21. The Committee approved the proposal.

Item No. 6 - FCR(96-97)39
HEAD 70 - IMMIGRATION DEPARTMENT
Subhead 202 Repatriation expenses

22. Replying to a member, the Principal Assistant Secretary for Security (PAS/S) clarified that the Chinese Government had already agreed to the repatriation of the ex-China Vietnamese Illegal Immigrants, but the actual arrangements would have to await the outcome of an appeal to be heard by the Privy Council in late July. He further advised that the Administration had stepped up efforts to speed up the repatriation programme. Between May and June 1996, a total of 1,400 illegal immigrants were repatriated each month under the voluntary and orderly repatriation programmes. The target was to repatriate all the remaining 15,000 Vietnamese illegal migrants as soon as possible.

23. The PAS/S further clarified that the expenses in respect of voluntary repatriation were borne by the United Nations High Commission for Refugees (UNHCR). In response to a Member, , PAS/S advised that the Administration would continue to urge the UNHCR to settle the outstanding payments totalling $1.1 billion relating to the care and maintenance of Vietnamese migrants in Hong Kong, and that the latter repaid $19.3 million in the first quarter of 1996. He assured members that the Administration would continue to press UNHCR for early settlement of the outstanding amount.

24. The proposal was approved by the Committee.

Item No. 7 - FCR(96-97)44
HEAD 118 - PLANNING DEPARTMENT
Subhead 700 General other non-recurrent

"Consultancy study on sustainable development for Hong Kong"

25. Several members considered the concept of sustainable development too abstract and academic, and sought clarification on what specific targets the proposed study was aiming to achieve. In response, the Principal Government Town Planner of Planning Department (PGTP/PD) advised that the economic, social and environmental needs of the community had all along been tackled on a policy-by-policy basis. Such an approach was no longer adequate to address the concerns about the pressure put on our environment and ecological assets. In fact, in the past decade, many governments had already adopted the principles of sustainable development in their policy and planning framework, for the long term benefits of their people. In considering the application of the concept to Hong Kong which did not have the natural resources to meet all its needs, the Government would have to devise a set of guiding values and determine its sustainability indicators for future planning of Hong Kong. The proposed study would therefore take stock of the present conditions in Hong Kong and identify the problems for developing guiding values and indicators for measuring the substainability of our planning and development proposals.

26. Some members considered that the concept of sustainable development might be incompatible with the present policies and practices being implemented by different government departments, and whether the proposed study would delay the implementation of current plans and programmes. They enquired if the new approach had the support of the whole Government. In reply, the Principal Assistant Secretary for Planning, Environment and Lands (PAS/PEL) assured members that the concept had been discussed and the proposed study supported by the Government as a whole. The Third Review of the White Paper on the Environment published in March 1996 outlined Governments intention in this respect. The study was mainly to throw light on the way forward, and the existing plans would continue until the Government had assessed the need for modifications to current plans and standards, where appropriate, on a long-term basis.

27. Some members expressed doubts on the need to engage consultants for the proposed study. They considered that the Government already had the expertise and information obtained from previous and on-going studies, and the research on sustainable development could be conducted by in-house staff. In response, PAS/PEL advised that sustainable development was a new concept on which Government had no expertise, and consultants with the relevant experience would be required for the project. The Director of Environmental Protection (DEP) added that existing baseline information on air quality, water quality and other environmental aspects in Hong Kong was scattered and incomplete, and there were important gaps which would have to be filled by the proposed consultancy study. The consultants would comprehensively review the scope and findings of the related studies conducted in Hong Kong so far, with a view to bringing together relevant findings. As regards the feasibility of appointing an adviser to the Government instead of engaging consultants, PGTP/PD advised that appointing an adviser would place the latter in the same category as a consultant, but the proposed study would be too complex to be done by one person.

28. In reply to a member, PAS/PEL clarified that the consultants would not generate on their own any proposals for policy or procedural changes, as their job was only to identify areas where new perspectives would seem desirable and to present their case to the government bodies concerned. The policy change would only be made by the Administration after consultation with the public and the parties concerned. In the area of transport planning, PAS/PEL also took note of a members views that mass transit network systems would be a commendable option from the economic and environmental angles. The point was well recognised in the Territorial Development Strategy Review published recently.

29. Responding to a members query on the population assumed for 2011 (i.e. 7.5 to 8.1 million) to be adopted for the proposed strategic environmental assessment, PAS/PEL advised that the assumption was based on the past trend that an average population growth of one million was recorded every ten years. As regards whether any continuing studies would be required after the present study to take account of any changes during or after the study which would take 30 months to complete, PAS/PEL advised that the Government would have to consider the consultancy report carefully before taking a view on the need to commission further studies on the applicability of the recommendations.

30. On the inflation and contingency provisions which represented about 25% of the project estimate, S for Tsy advised that the consultant fees were based on the 1995 salary and it was standard practice to allow for inflation adjustments for projects extended over two or three years. The provision was only an estimate and the actual cost would depend on the outcome of an open tender. PGTP/PD further advised that the contingency provision was to provide for uncertainty in the depth of the consultancy study, as the study would cover a wide, complex spectrum of subjects and policies. As regards the provision for printing ($1.4 million) and exhibition expenses ($0.9 million), PGTP/PD explained that public consultation and education would play an important part in getting public feedback. The actual expenses would, however, be subject to the scrutiny of the Government.

31. On the cost-effectiveness of the proposed consultancy, the Administration undertook to provide a cost comparison with similar studies conducted in the past. PGTP/PD advised that the cost estimates were reasonable having regard to its complexity and duration.

32. After discussion, members still had reservations on the need of the study. They requested the Administration to provide supplementary information on the justifications and targets of the proposed study, as well as its interface with the previous and existing studies, before taking a view on the proposal. In view of members queries, S for Tsy withdrew the proposal and undertook to provide further information to the Committee.

33. The proposal was withdrawn by the Administration.

Item No. 8 - FCR(96-97)45
CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Medical Subventions
New Subhead "Butterfly Beach Laundry"

34. On the possibility of contracting out or privatising the laundry service, the Deputy Director (Hospital Planning and Development) of Hospital Authority (DD/HA) advised that while the suggestion was worth considering, a feasibility study conducted by the HA revealed that few private laundries in Hong Kong could cope with the large laundry service demands of the public hospitals. The proposed Butterfly Beach Laundry would cater for about 3,500 hospital beds, and its estimated operating cost of $5 per kilogram was cheaper than that available on the market. He added that the proposed laundry was merely a re-location of the existing laundry facilities at Queen Elizabeth Hospital which would cease operation when the new laundry started operation.

35. As regards the anticipated staff savings (about $3 million per annum), DD/HA explained that the new machines would bring about higher efficiency, hence lesser labour requirements. He assured members that there would not be any staff redundancy problems as the extra staff could be re-deployed to other areas of work.

36. Replying to a member, the Director of Architectural Services (D Arch S) advised that the modern machines to be installed in the Butterfly Beach Laundry would not have adverse impact on the air ventilation and room temperature of the laundry.

37. Some members expressed concern about the environmental impacts, particularly the water pollution, associated with the operation of the laundry. In reply, the Principal Assistant Secretary for Health and Welfare advised that, in addition to other mitigation measures, the Government had acceded to the request made by Tuen Mun District Board (TMDB) to upgrade the control standard of the water discharged from the new laundry. Furthermore, as the liquid effluent would be released to public sewer for further processing before discharge to deep sea, the water quality of Butterfly Beach should not be adversely affected. DD/HA also confirmed that an information paper on the revised arrangements had been circulated to TMDB members on 27 June 1996 and no further objection was received.

38. Referring to the consultancy costs, D Arch S clarified that the consultancy would be confined to quantity surveying, and other professional services would be provided by in-house staff. While the calculation of consultancy fees was based on the established formula recommended by the professional bodies, the actual costs would depend on the tenders to be selected through a competitive process. At the request of a member, D Arch S undertook to provide further information on the estimated consultancy fees in this respect.

39. The proposal was approved by the Committee.

40. The Committee was adjourned at 4:45 p.m.

Legislative Council Secretariat
28 October 1996

Last Updated on 27 November 1998

FINANCE COMMITTEE

Minutes of the proceedings of the Meeting held on 12 July 1996 at 2:30 p.m. in the Legislative Council Chamber

Minutes of the proceedings of the Meeting held on
12 July 1996 at 2:30 p.m. in the Legislative Council Chamber