FINANCE COMMITTEE

Record of Meeting held on 17 November 1995 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 Ronald ARCULLI, OBE, JP
Hon Mrs Miriam LAU Kin-yee, 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 Henry TANG Ying-yen, JP
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 CHAN Yuen-han
Hon Andrew CHENG Kar-foo
Hon CHENG Yiu-tong
Hon Anthony CHEUNG Bing-leung
Hon CHOY Kan-pui, JP
Hon David CHU Yu-lin
Hon Albert HO Chun-yan
Hon IP Kwok-him
Hon LAU Chin-shek
Hon Ambrose LAU Hon-chuen, JP
Hon LAW Chi-kwong
Hon LEE Kai-ming
Hon LEUNG Yiu-chung
Hon Bruce LIU Sing-lee
Hon LO Suk-ching
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
Hon Lawrence YUM Sin-ling

Absent:

Dr Hon David LI Kwok-po, OBE, LLD, JP
Dr Hon Edward LEONG Che-hung, OBE, JP
Hon James TO Kun-sun
Hon Paul CHENG Ming-fun
Hon CHEUNG Hon-chung
Dr Hon LAW Cheung-kwok

In Attendance for specific items:

In Attendance:

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Item No. 1 - FCR(95-96)70

HEAD 40 - EDUCATION DEPARTMENT
Subhead 700 General other non-recurrent

In response to questions, the Administration clarified that in view of the lead time required for the preparation of syllabuses and textbooks, it would not be possible to include Putonghua in the formal curriculum for lower primary (P1-P3)and senior secondary (S4-S5) levels before 1998. The proposed summer courses therefore aimed at bridging the gap. The emphasis of these introductory courses would be on practical oral and listening training rather than ‘pinyin’. Individual schools would be free to recruit their own instructors from amongst the 3,000 teachers who had completed the Putonghua training programmes organised by the Education Department or those instructors working in various Putonghua teaching centres.

2. The Committee approved the item.

Item No. 2 - FCR(95-96)71

HEAD 194 - WATER SUPPLIES DEPARTMENT
Subhead 700 General other non-recurrent

3. In response to Members’ questions on the viability of utilising the computer system in Lands Department for digitising the paper drawings on underground water mains, the Deputy Director of Water Supplies (DD/WS) explained that it would not be possible at this stage to merge the two systems as they were designed to serve different purposes. However, his Department had already made use of the digitised plans in Lands Department on a trial basis and the Administration was aware of the need to ensure compatibility of the two systems for the benefit of users. He agreed to make reference to the comments made by the Director of Audit in his report on the computerisation of land information, and to consult the Lands Department on their experience before finalising the tender specifications for digitising the water mains drawings. With the proposed digital system, the Administration would be in a position to exchange a wider range of electronic data with other utilities, thus reducing inconvenience to road users in the case of road openings.

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4. As to whether the proposed underground asset management system would help identify mains requiring repairs, the Principal Assistant Secretary for Works advised that the study aimed at developing a more effective asset management plan for the purpose of deriving a long-term preventive maintenance and replacement strategy. The Assistant Director of Water Supplies added that the study results would be useful for planning maintenance and repair works for aged water mains.

5. As regards the complaints of poor quality of fresh water in old urban areas, DD/WS advised that according to the water samples collected from those areas, the quality of water was affected by the rusted water pipes inside buildings. As from 23 December 1995, the Government would not approve plumbing proposals using unlined galvanised steel pipes which were non rust-proof for potable uses.

6. The Committee approved the proposal.

Item No. 3 - FCR(95-96)72

CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Transport Department
New Subhead “Replacement of mobile radio communication system in the Lion Rock Tunnel”

7. On the need to replace the existing mobile radio communication system in the Lion Rock Tunnel, the Assistant Commissioner for Transport (AC for T) advised that the system had already served out its useful life, and some 40 incidents of system break-down were recorded in the past seven months. Since the spare parts of the system were already out of production, it would be more appropriate to dismantle the existing system and replace it with an enhanced radio system which was capable of reducing the interference caused by the increasing use of cellular phones inside the tunnel. In reply to Members’ questions, AC for T confirmed that the Government had contractual responsibility in providing the communication system to the tunnel operator and maintenance of the system.

8. Referring to the charges of $1.75 million for the services provided by the Electrical and Mechanical Services Department (EMSD), Members observed that the charges being about 20% of the project cost were on the high side. They were disappointed that the Government, while introducing inter-departmental charging or trading funds, made little efforts to promote competition and continued to use the services of these departments (such as EMSD and the Office of the Telecommunications Authority) in the same way as in the past, bringing no incentives to these departments for making changes to improve efficiency. Members had, on many occasions, requested the Administration to permit Government departments to make use of services available in the open market. They considered that with competition, these servicing departments would be under the pressure to streamline their work and cut down their operating costs.

9. In response, the Assistant Director of Electrical and Mechanical Services (AD/EMS) clarified that the proposed EMSD charges had included $0.45 million for engaging consultants to study the interference problem and about $0.26 million for site supervision. The remaining charges only represented about 10% of the project cost, and they covered design, tender preparation, tender evaluation, supervision of installation and commissioning. The hourly rate of $650 charged by EMSD was lower than the market rate of $900.

10. Some Members queried the need to engage EMSD staff to supervise the installation and commissioning work. They considered it the responsibility of the client department, that is, Transport Department in this particular case, to ensure that the installation was up to the required standard. They also pointed out that, apart from the hourly rate, the number of man-hours required for the project should also be carefully evaluated. On this point, AC for T advised that they did not have the expertise in the department to check the quality of the installation, and it would be more appropriate for EMSD to oversee the commissioning work as the latter would eventually be responsible for the subsequent maintenance of the system. AD/EMS added that apart from checking the work quality, the safety aspect of the installation also needed inspection. The Secretary for the Treasury (S for Tsy) said that EMSD was under the purview of the Secretary for Works who had policy responsibility in ensuring the operational efficiency of EMSD and in assessing if the staffing requirement for a particular job was appropriate.

11. After deliberations, Members maintained that they were not convinced of the level of charges proposed by EMSD. They considered it necessary for the issue of EMSD charges to be further discussed by the relevant Panel, and suggested that discussion of the item be deferred until the Panel had a chance to understand the operation of the current system for determining such charges and the measures being taken by EMSD to achieve greater cost-effectiveness.

12. In response, S for Tsy advised Members that the purpose of introducing inter-departmental charging was to promote cost-awareness among the user departments and to enable EMSD to evaluate the efficiency and cost-effectiveness of its operation. However, the longer term policy direction for the department would need to be carefully considered having regard to the possible staffing consequences if EMSD was to be required to compete with the private sector. He agreed to withdraw this item pending disucssion with the relevant Panel.

Item No. 4 - FCR(95-96)73

CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Transport Department
New Subhead “Procurement of electronic parking devices”

13. In response to Members’ questions on the electronic parking devices, AC for T provided the following information -

1. The chip cards used on the proposed electronic parking meters would be made of high quality material so that they were re-usable and protected from normal wear and tear. The cards would be available at convenience stores, and a deposit would have to be made on each card when purchased so that the cards would be returned for re-use.
2. The Pay and Display Machines would only be used for cul-de-sac type of parking lots, where the machines could be placed within easy reach of the drivers. The car number as well as the period of parking already paid would be shown on the tickets, which were required to be displayed on the window screen for inspection.
3. The proposed procurement included 3,000 meters for new parking spaces and 2%-3% for replacement.
4. The contractor for the operation and management of parking meters was aware of the reduction of his costs after the implementation of the replacement proposal. Provisions had been included in the current contract to cater for reduction of costs due to changes of this nature.

14. As regards the need for a feasibility study after a trial scheme had been conducted, AC for T explained that the trial scheme conducted between 1992 and 1994 aimed at assessing the acceptability of using electronic parking device in Hong Kong. The feasibility study to be conducted by EMSD would be a prequalification exercise to test the performance of the chip/smart cards produced by 15 suppliers.

15. In view of the need for a separate briefing to be conducted on the charges of EMSD, S for Tsy agreed to withdraw this item.

Item No. 5 - FCR(95-96)74

HEAD 45 - FIRE SERVICES DEPARTMENT
Subhead 603 Plant, vehicles and equipment

16. Responding to Members’ questions, the Chief Fire Officer (CFO) confirmed that the proposed fireboat was to provide relief for other fireboats and therefore would not give rise to any increase in staff. The vessel, which was of the standard design approved by the Marine Department, would be procured through open tender. The current Fireboat No. 3, once replaced, would be returned to the Marine Department.

17. In reply to a Member, the CFO confirmed that the department had the resources to fight big fire at sea. In the past three years, there were 78 vessel fires and 117 special services on vessels. In 1995, there were 221 incidents requiring the attendance of fireboats.

18. The Committee approved the proposal.

19. The Committee was adjourned at 4:30 p.m.

Legislative Council Secretariat
8 December 1995

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