Noting that the Hong Kong Resort Company Ltd. (HKR) would not recover the capital costs of the tunnel link but would only recoup its recurrent costs from tunnel users through toll, Mrs Miriam LAU Kin-yee proposed that HKR should be allowed to defer payment of the royalty in case the tunnel operation was not profitable. In response, the Principal Assistant Secretary/Treasury/Revenue (PAS/Tsy/R) advised that there was no such arrangement in the existing practice of royalty collection from tunnel operators. The proposed royalty charge, being $0.5 per vehicle per one-way trip, should not create pressure on the toll level.

2 Mr Ronald ARCULLI commented that the existing royalty policy for tunnel operation might not be applicable to the tunnel link since there was no precedent where the tunnel company would not recover the capital costs of the tunnel project. He proposed that the royalty should be a fixed amount. PAS/Tsy/R explained that charging royalty at a specified percentage of operating receipts was more equitable for both the tunnel company and the public. In the event that operating receipts were high, more royalty would be collected for the benefit of the public. On the other hand, less royalty would be collected from the company if operating receipts were low.

3 Mr LEE Kai-ming considered the royalty rate of 2.5% of the operating receipts for the tunnel link too high. He proposed a reduction of the royalty rate.

4 The Chairman proposed that instead of relaxing the vehicular traffic restriction in future, there should be no restriction on the use of the tunnel link from the beginning. The tunnel company and residents of Discovery Bay (DB) could decide on the types of vehicles to be allowed. This would obviate the need to impose higher royalty when the restrictions were lifted.

5 Members urged the Administration to consider their proposals on the royalty to be paid by HKR and provide a response to the Bills Committee in due course.

Consultant report on Discovery Bay Road Tunnel Link

6 In response to the Chairman, Mr J C H Marriott advised that the estimated operating and maintenance costs of the tunnel link would be about $500,000 to $600,000 (in 1997 prices) per month respectively. He added that HKR had been liaising with the Steering Committee of the Transport Department and various consultants on the costs of tunnel facilities which were not yet finalised.

7 Responding to members, the Principal Transport Officer/Management (PTO/M) advised that the average operating and maintenance costs of the single-tube tunnel of DB could not be compared with the average maintenance costs of other double-tube tunnels on a per kilometer basis. The operating costs of these tunnels were dependent on their own fixed costs, designs, construction methods, tunnel facilities and traffic flows.

8 As for the estimated reserve for major cyclical maintenance works of the DB tunnel, PTO/M advised that a monthly sum of $80,000 had been included in the projections of operating and maintenance costs for such purpose. These costs would be reviewed once the scope of the tunnel facilities were finalised and adjustments would be made if necessary. The Chairman requested the Administration to provide updated information to the relevant Panel once it was available.

Other issues

9 The Chairman enquired whether the construction of Tai Ho interchange could be advanced to tie in with the opening of the tunnel link, the Senior Engineer/Transport Department advised that the Territory Development Department had just submitted a financial proposal to the Public Works Subcommittee of the Finance Committee concerning the comprehensive feasibility study on the development of Tai Ho. The study would commence in August 1997 and was expected to completed in eighteen months upon funding approval by the Finance Committee. The question raised by the Chairman would be covered in the study.

10 Referring to the Administration's response to the question of law enforcement on vehicles confined to Lantau, some members opined that a coloured licence plate, which could be easily distinguishable from that currently used, should be adopted to facilitate enforcement of the restriction. The Administration noted members* view and agreed to study the matter at a later stage.

II. Committee stage amendments

[LegCo Paper No. CB(1) 1520/96-97]

11 The Principal Assistant Secretary/Transport advised that the Administration had revised the CSAs to address issues raised by members at the meeting on 17 April 1997 and to take into account comments made by the Assistant Legal Adviser (ALA). Technical amendments and refinement had also been made to other provisions of the Bill. He briefed members on the proposed CSAs.

12 At members' request, the Administration undertook to revise the CSAs in respect of the following:

to resolve the inconsistency in the use of the terms "gross operating receipts" and "operating receipts"; and
to amend the Chinese rendition for "cost" in clause 15(a)(i) to bring it in line with other amendments.

13 ALA advised that it would be necessary to scrutinize the latest version of CSAs upon receipt.

III. Any other business

14 Members considered it unnecessary to examine the bill clause by clause. The Chairman requested a response from the Administration on outstanding issues of the Bill by 5:00 pm on 13 May 1997. If members did not raise any objection to the Administration*s response, it would not be necessary to further discuss the Bill at the meeting scheduled for 16 May 1997. Members were asked to notify the Clerk if they had any further comments on any aspect of the Bill.

15 The meeting ended at 12:20 pm.

(Post meeting note: The Administration's response was circulated vide LegCo Paper No. CB(1) 1577/96-97 dated 13 May 1997. As no objection was raised on the Administration*s response, the meeting scheduled for 16 May 1997 at 10:30 am was cancelled on the instruction of the Chairman. An updated version of CSAs was circulated vide LegCo Paper No. CB(1) 1637/96-97 dated 20 May 1997. The Bills Committee reported its deliberations and recommendation to the House Committee on 23 May 1997.)

Provisional Legislative Council Secretariat
15 July 1997

Last Updated on 14 December 1998

Bills Committee on Discovery Bay Tunnel Link Bill

Minutes of meeting held on Thursday, 8 May 1997, at 10:30 am in Conference Room A of the Legislative Council Building

I. Follow-up on outstanding issues

Royalty

Consultant report on Discovery Bay Road Tunnel Link

Other issues

II. Committee stage amendments

III. Any other business

Minutes of meeting
held on Thursday, 8 May 1997,
at 10:30 am in
Conference Room A of the Legislative Council Building