ITEM FOR PUBLIC WORKS SUBCOMMITTEEOF FINANCE COMMITTEE
Revised Terms of Reference of the Public Works Subcommittee
Members are requested to recommend to Finance Committee (FC) the revision of the terms of reference of the Public Works Subcommittee (PWSC) to include examination of capital subvention works projects under the Capital Works Reserve Fund (CWRF) - Head 708 which is currently outside the purview of PWSC.
2. Projects funded under Head 708 of the CWRF1 do not form part of the Public Works Programme (PWP) and are therefore outside the purview of the PWSC. These projects include capital subvention works projects, e.g. building projects for subvented bodies such as Hospital Authority, the UGC-funded institutions and other educational and welfare organisations, and major systems and equipment. Works projects each costing over $15 million2 are currently submitted directly to the FC for examination. As discussions over the technical aspects of these proposals often take up a substantial part of FC's meeting time, it has been suggested that these proposals should first be examined by the PWSC, in the same way as other PWP projects, prior to submission to the FC.
3. In response to this suggestion, the Administration has confirmed its agreement to present capital subvention works items to the PWSC prior to submission to the FC. What requires to be done is to expand the terms of reference of the PWSC which currently only cover PWP projects, as shown in Enclosure 1.
4. Members are requested to endorse the expansion of the terms of reference of the PWSC to include capital subvention works projects funded under Head 708 of the CWRF. Proposals for major systems and equipment in both the Government and the subvented sector currently also funded under Head 708 will continue to be submitted to the FC direct. The proposed revised terms of reference is given in Enclosure 2.
5. Under Standing Order 60 (2B), it is for the FC to determine the function of its subcommittees. Subject to members' agreement to the proposal, the revised terms of reference will be submitted to the FC for approval. Approval to revise paragraph 2 of the procedures of PWSC to reflect the change will also be sought.
6. To allow sufficient lead time for the Administration to prepare for the change, and having regard to the schedule of PWSC meetings in the current session, it is recommended that the change should take effect from 19 July 1996, which is the last meeting of FC scheduled for the current session. Any capital subvention works items to be submitted to FC for approval after this date will be subject to the new procedure.
7. The question of why proposals in relation to the construction of new facilities or redevelopment of existing facilities for subvented organisations are put to FC direct has been raised on several occasions. At the FC meeting on 12 January 1996, when members raised this question again while considering the proposal to redevelop the operating theatre block and rehabilitation block in the Queen Elizabeth Hospital, the Secretary for the Treasury agreed that if it were considered by members that proposals of this nature should first be examined by the PWSC before they were submitted to FC for approval, the Administration would review the matter with the LegCo Secretariat and make suitable arrangements in future. Discussion between the Finance Branch and the LegCo Secretariat has subsequently taken place, and the Administration agreed to present these proposals to PWSC prior to submission to the FC.
8. The existing terms of reference of the PWSC are to recommend to FC the upgrading of projects to or downgrading from Category A of the PWP, changes to the scope and/or approved project estimates of projects currently in Category A of the PWP. The terms of reference have been incorporated in PWSC's procedures which were endorsed by FC on 11 March 1994. Changes to the terms of reference and the procedures will require the approval of the FC.
9. Upon implementation of the new procedures, there would still be one category of proposed works projects which will be submitted to the FC direct. This concerns welfare projects funded under the Lotteries Fund. As a matter of practice, the Administration seek the approval of FC where a non-recurrent commitment under the Lotteries Fund, usually for a new welfare project, carries a likely recurrent government expenditure implication in excess of $8 million per annum. Since these projects are not funded under the CWRF and the need for FC's approval relates mainly to their recurrent expenditure implications, they will not be subject to the procedures. The Administration have advised that there are very few Lotteries Fund projects requiring FC approval in a year.
Legislative Council Secretariat
The terms of reference of the PWSC are to recommend to Finance Committee the upgrading of projects to or downgrading from Category A of the Public Works Programme, or changes to the scope and/or approved project estimates of projects currently in Category A of the Public Works Programme.
The terms of reference of the PWSC are to consider submissions from the Administration, and as appropriate, to recommend to Finance Committee -
(a) the upgrading of projects to or downgrading from Category A of the Public Works Programme;
(b) changes to the scope and/or approved projects estimates of projects currently in Category A of the Public Works Programme;
(c) the approval of new commitments for capital subvention works projects funded under Capital Works Reserve Fund Head 708,; and
(d) changes to the scope and/or approved projects estimates of works projects approved for funding under Capital Works Reserve Fund Head 708.
Last Updated on 8 December 1998