Legislative Council Finance Committee
LegCo Paper No. FC 40/96-97
(These minutes have been
seen by the administration)
Ref : CB1/F/1/2

Minutes of the proceedings of the meeting

held on Friday, 6 December 1996 at 2:30 pm in the Legislative Council Chamber

Members present :
    Dr Hon YEUNG Sum (Chairman)
    Hon CHAN Kam-lam (Deputy Chairman)
    Hon NGAI Shiu-kit, OBE, JP
    Hon SZETO Wah
    Hon Edward S T HO, OBE, JP
    Hon Ronald ARCULLI, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon CHEUNG Man-kwong
    Hon Michael HO Mun-ka
    Dr Hon HUANG Chen-ya, MBE
    Hon Emily LAU Wai-hing
    Hon LEE Wing-tat
    Hon Fred LI Wah-ming
    Hon Henry TANG Ying-yen, JP
    Hon James TO Kun-sun
    Hon Howard YOUNG, JP
    Hon Zachary WONG Wai-yin
    Hon James TIEN Pei-chun, OBE, JP
    Hon CHAN Wing-chan
    Hon Andrew CHENG Kar-foo
    Hon CHENG Yiu-tong
    Hon CHEUNG Hon-chung
    Hon CHOY Kan-pui, JP
    Hon Albert HO Chun-yan
    Hon IP Kwok-him
    Hon Ambrose LAU Hon-chuen, JP
    Dr Hon LAW Cheung-kwok
    Hon LEE Kai-ming
    Hon LEUNG Yiu-chung
    Hon Bruce LIU Sing-lee
    Hon LO Suk-ching
    Hon Margaret NG
    Hon SIN Chung-kai
    Hon TSANG Kin-shing
    Dr Hon John TSE Wing-ling
    Hon Mrs Elizabeth WONG, CBE, ISO, JP
Members absent :
    Hon Allen LEE, CBE, JP
    Hon Mrs Selina CHOW, OBE, JP
    Hon Martin LEE, QC, JP
    Dr Hon David K P LI, OBE, LLD (Cantab), JP
    Hon LAU Wong-fat, OBE, JP
    Hon Mrs Miriam LAU Kin-yee, OBE, JP
    Dr Hon LEONG Che-hung, OBE, JP
    Hon CHIM Pui-chung
    Hon Frederick FUNG Kin-kee
    Hon Eric LI Ka-cheung, OBE, JP
    Dr Hon Samuel WONG Ping-wai, MBE, FEng, JP
    Dr Hon Philip WONG Yu-hong
    Hon Christine LOH Kung-wai
    Hon LEE Cheuk-yan
    Hon CHAN Yuen-han
    Hon Paul CHENG Ming-fun
    Dr Hon Anthony CHEUNG Bing-leung
    Hon David CHU Yu-lin
    Hon LAU Chin-shek
    Hon LAW Chi-kwong
    Hon MOK Ying-fan
    Hon NGAN Kam-chuen
    Hon Lawrence YUM Sin-ling
Public officers attending :
    Mr K C KWONG
    JP Secretary for the Treasury
    Mr Kevin HO
    JP Deputy Secretary for the Treasury (1)
    Mrs Carrie LAM
    Deputy Secretary for the Treasury (3)
    Mr CHING Sik-fan
    Assistant Director of Accounting Services (Computer)
    Mr TSANG Chi-hung
    Assistant Director of Accounting Services (Treasury Accounts)
    Mr Richard YUEN
    Deputy Secretary for Economic Services
    Mr LEE Ping-kuen
    Assistant Director of Marine
    Mr W K LEE
    General Manager of Government Dockyard, Marine Department
    Mr Esmond LEE
    Principal Assistant Secretary for Planning, Environment and Lands
    Mr MO Chan-ming
    JP Principal Government Land Agent of Lands Department
Clerk in attendance :
    Miss Pauline NG
    Assistant Secretary General 1
Staff in attendance :
    Mrs Constance LI
    Chief Assistant Secretary (Finance Committee)
    Mr Andy LAU
    Senior Assistant Secretary (Finance Committee)

Item No. 1 - FCR(96-97)76


The Committee approved the proposal.

Item No. 2 - FCR(96-97)77




" New Subhead "Replacement of the Government Cash Receipting System"

2. Members were in support of the proposal to modernize the Government Cash Receipting System. Responding to members' questions on the high estimated costs for the proposed system, the Assistant Director of Accounting Services (Computer) (AD/C) clarified that the provisions included system development and cabling works, and the procurement of ancillary software such as the optical character reader to facilitate input of demand note data. With regard to the $2.6 million provision for annual maintenance of the new system, AD/C advised that the estimates were based on the current market trend that system maintenance represented about 12% of the total hardware and software costs. These being estimates only, the Administration hoped that a lower price could be obtained through open tender. On the implementation timetable, AD/C advised that the target was to complete the tendering exercise by October 1997, and installations would start in early 1998, aiming at full implementation within 1998.

3. As to whether the new system would bring about any staff savings, the Assistant Director of Accounting Services (Treasury Accounts) (AD/TA) explained that the proposal was to replace an aged system rather than to save on manpower. With the streamlined operation after the new system was put in place, it would become possible to provide a more efficient service to members of the public, notwithstanding the expected increase in the number of demand notes issued by the Government in the years to come.

4. Noting that the cost per payment at collection centres was about $11 as compared to a much cheaper cost of $2 to $3 by phone and other electronic means, members urged the Government to make more efforts to encourage the public to switch to autopay or other electronic payment methods. AD/TA advised that the Government had in fact made much efforts in promoting payment by bank autopay or by phone. While there was a substantial increase in terms of the number of auto-payments, with the overall increase in receipts handled by the Government, bank autopay and payment by phone only represented 10% and 7.5 % respectively of the total payments received. A member remarked that a lot of companies required receipts for payments to the Government but instant receipts were not available in the bank autopay and payment by phone systems. He suggested that the Government should consider using an autopay system with instant receipts operating on 24-hour basis for the convenience of the public. In response, AD/TA advised that the Government had been in discussion with some private vendors on the provision of 24-hour autopay terminals. AD/C also confirmed that there would not be any interface problem between the proposed receipting system and the autopay systems .

5. The Committee approved the proposal.

Item No. 3 - FCR(96-97)78


"Subhead 603 Plant, vehicles and equipment

Replacement of "Tin Hau"

6. Responding to a member's question on how the launch service could help promote Hong Kong's image as a fast expanding port in the Asia-Pacific region, the Deputy Secretary for Economic Services advised that one of the principal uses of the launch was to provide marine transport for overseas visitors, VIPs and representatives of other governments or major international businesses to observe the port development of Hong Kong and to get across the message that Hong Kong was the hub port in the region for the export and import of goods. However, due to the old design and the extremely low speed of the existing launch 'Tin Hau', it often took unnecessary long time to transport visitors to waters beyond the Victoria Harbour. Although there was another vessel 'Mariner' in the Government Fleet which could be used for conveyance of passengers, it did not have the suitable facilities for holding social and official activities on the launch, and the vessel itself was already very old, being planned for disposal in the year 2000. On the feasibility of hiring launch service, the Assistant Director of Marine (AD/M) advised that as requests for services were often made at short notice, there would be no guarantee of service if such services were to be acquired from private operators. In view of the frequency and the often sensitive nature of the subjects discussed by VIPs and in particular representatives of other governments on board, it would be more appropriate for the Administration to have its own launch.

7. A member asked whether the proposed staff reduction could take place before the procurement of the new vessel. In reply, AD/M advised that a smaller crew was only possible with highly automated operations which were not available on the existing vessel. With regard to the residual use of obsolete vessels, the Administration advised that these vessels would be sold by auction.

8. Concerning about the high maintenance costs and inefficiency of those aged vehicles and vessels used by government departments such as the Police and Marine Police, some members urged the Government to speed up the modernization and replacement programme of these vehicles.

9. The Committee approved the proposal.

Item No. 4 - FCR(96-97)79



Ex-gratia zonal compensation

10. In response to a question on why a new definition for Zone A was necessary, the Principal Assistant Secretary for Planning, Environment and Lands (PAS/PEL) advised that the proposal was made upon completion of a review of the existing ex-gratia zonal compensation system. The review had been carried out following the Director of Audit's review of the Yung Long - Black Point - Lung Kwu Tan case, and the comments of the Public Accounts Committee on the case. The review concluded, inter alia, that the current definition of Zone A which covered only new town developments areas, did not adequately reflect the current policy intention. The definition of Zone A should be refined to cover areas affected by essential projects with territory-wide significance, such as the New Airport, the Container Terminals at Kwai Chung and the Black Point Power Station. Responding to members' further questions, PAS/PEL said that it would be difficult to specify what constituted essential projects in this category. The Administration would consider each case on its individual merits, having regard to the scale of development and importance of such projects to Hong Kong. The decision on each case would rest with the Committee on Planning and Land Development (CPLD) which would make reference to precedents and seek the views of the relevant policy branch.

11. With regard to the financial implications of the new definition of Zone A, the Administration advised that it was not possible to quantify them at the present stage. Any additional provisions required would form part of the Administration's request for funds under Head 701 Land Acquisition of the Capital Works Reserve Fund to meet the necessary land resumption costs to be incurred in a particular year.

12. As for the criteria to be used in determining zonal upgrading, the Administration advised that CPLD would follow the zonal definitions and have regard to precedents and the views of the relevant policy branch, before a decision was made on zonal upgrading. There would be an element of subjectivity in the decision process. Where the upgrading of an area did not accord with the prevailing zonal definitions, the Administration would seek approval from the Executive Council and the Finance Committee of the Legislative Council for the upgrading in question and, where appropriate, for the necessary changes to the zonal definitions.

13. At the request of a member, the Administration undertook to provide an information paper to the LegCo Panel on Planning, Lands and Works on the progress of the new system six months after its implementation.Admin

14. The Committee approved the proposal.

15. The Committee was adjourned at 3:25 pm.

Legislative Council Secretariat

23 December 1996

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