Provisional Legislative Council

PLC Paper No. CB(1)1028
(These minutes have been
seen by the Administration)


Panel on Planning, Lands and Works

Minutes of meeting held on Thursday, 18 December 1997, at 4:30 pm in Conference Room A of the Legislative Council Building

Members present :

Hon Edward HO Sing-tin, JP (Chairman)
Hon KAN Fook-yee (Deputy Chairman)
Dr Hon Raymond HO Chung-tai, JP
Dr Hon Charles YEUNG Chun-kam
Hon IP Kwok-him
Hon CHOY Kan-pui, JP

Members attending :

Hon LEE Kai-ming
Hon Andrew WONG Wang-fat, JP

Members absent :

Hon HO Sai-chu, JP
Hon Ronald ARCULLI, JP
Hon LEUNG Chun-ying, JP
Hon CHENG Kai-nam
Hon LAU Wong-fat, JP
Hon Timothy FOK Tsun-ting
Hon NGAN Kam-chuen

Public officers attending :

Item IV

Principal Assistant Secretary for Works

Business Manager
Sewage Services Trading Fund Branch
Drainage Services Department

Mr Clement Y L LAU
Assistant Director of Drainage Services

Item V

Mr Esmond LEE
Principal Assistant Secretary for Planning, Environment and Lands (Lands)

Principal Government Land Agent (Specialist)
Lands Department

Chief Estate Surveyor
Lands Department

Mr Tony LUI
Principal Land Executive
Lands Department

Clerk in attendance :

Miss Odelia LEUNG
Chief Assistant Secretary (1)1

Staff in attendance :

Mrs Mary TANG
Senior Assistant Secretary (1)2

I Confirmation of minutes of meeting
(PLC Paper Nos. CB(1)470 and 525)

The minutes of meetings held on 13 and 24 October 1997 were confirmed.

II Date of next meeting and items for discussion

2. Members noted that the next regular meeting of the Panel, originally scheduled for 23 January 1998, would be advanced to 15 January 1998 at 11:30 am to discuss the measures of flood prevention and control. The meeting would be held immediately after the joint meeting with the Transport Panel at 10:45 am to discuss the development of the road network between Lantau and North-West New Territories.

(Post-meeting note: At the request of the Administration and with the consent of the Chairman, an additional agenda item on South-East Kowloon Development at Kai Tak Airport-Early development packages had been included in the agenda of the regular Panel meeting.)

III Information papers issued since last meeting

3. Members noted that no information paper had been issued since the last meeting.

IV Future funding arrangement of the Sewage Service Trading Fund High Priority Programme
(PLC Paper No. CB(1)649(01))

4. The Principal Assistant Secretary for Works (PAS/W) briefly explained the proposed future funding arrangement for the completion of the High Priority Programme after the closure of the Sewage Services Trading Fund (SSTF). As the SSTF was funded by a capital injection from the Capital Investment Fund, with the closure of the SSTF on 31 March 1998, the Director of Drainage Services would be required to return the residual capital of the SSTF, in the region of $2,553.7 million, to the Capital Investment Fund. The Administration intended to seek the approval of the Public Works Subcommittee at its meeting on 7 January 1998 on the proposed arrangement to fund the outstanding works of the SSTF from the Capital Works Reserve Fund after 31 March 1998.

5. On the proposed funding arrangement, the Business Manager, SSTF Branch explained that an up-to-date estimate of the price of the outstanding works was around $3,011 million. Barring unforeseen circumstances, this amount should be sufficient to meet the outstanding contractual commitments. As at 31 March 1998, the actual cash balance of the SSTF would be around $2,553.7 million. Had the SSTF continued in existence, there would be a need for the Administration to seek further funding of about $200 to $300 million to cover the difference between $3,011 million and $2,553.7 million taking account of the interest accrued to the SSTF. This was foreseen when the Finance Committee initially approved a capital injection of $6.8 billion to the SSTF on 4 February 1994.

6. Members were of the view that the joint venture company which had failed to complete the six tunnelling works contracts should be penalised. PAS/W confirmed that the company had been temporarily suspended as listed contractors. The suspension lasted a certain period and the Administration was considering the way forward. A review on the tender arrangements was also underway and its outcome would be reported to the Panel. In response to members, PAS/W advised that the company was not involved in other works of the High Priority Programme.

7. A member pointed out that normally an order for removal from the list of contractors was valid for a period of six months only. He suggested that the Administration should not award further contracts to the company unless and until the matter had been satisfactorily resolved. The Chairman requested the Administration to notify the Panel should a decision be made to lift the restriction on the company, together with justifications for doing so. The Administration noted members?views.

8. Responding to members?concern about the cost of the tunnelling works, the Assistant Director of Drainage Services advised that the Administration was actively monitoring it. A completion contract for two tunnels had been awarded and tenders had been invited on the four remaining tunnels. The Administration envisaged that the six tunnelling works could be completed within the newly approved budget.

V Pilot Scheme on contracting out certain land resumption work in the New Territories
(FCR (97-98)69 and PLC Paper No. CB(1)672)

9. Members noted that the item had been withdrawn by the Administration and was referred to the Panel for further deliberation by the Finance Committee at its meeting on 28 November 1997. Mr KAN Fook-yee declared interest that his company had unsuccessfully bid for the consultancy contract of the pilot scheme.

10. The Chairman referred members to the letter from Mr LAU Wang-fat objecting to the pilot scheme which had been circulated to members. He informed that Mr LAU was unable to attend the meeting due to other commitments.

11. At the invitation of the Chairman, the Principal Assistant Secretary for Planning, Environment and Lands (PAS/PEL) briefly explained the need for conducting the pilot scheme on contracting out certain land resumption work in the New Territories. He said that the current staffing resources in the Lands Department were unable to meet the projected demand for resumption of land which was estimated to exceed 4,000 hectares between 1996-97 and 2000-01. Although the Administration intended to provide additional staffing resources to the Lands Department, such resources would unlikely be sufficient to meet the demand. After all, it was considered not cost-effective to employ a large number of staff to cope with the increase in workload which would fluctuate, depending on the progress of land acquisition. One of the options to meet the demand was to contract out certain aspects of land acquisition work to the private sector. PAS/PEL emphasised that contracting out part of the work undertaken by the Government was not a new initiative. The Territory Development Department, for instance, had contracted out design and consultancy work to the private sector. He assured members that the proposed contracting out of work would not compromise the existing relationship between private land owners and the Government in terms of statutory rights and obligations. It would free up the staff of the Lands Department to carry out the core aspects of resumption work. The Administration had discussed with the Heung Yee Kuk the proposed pilot scheme.

12. On members?concern about the removal of graves, the Chief Estate Surveyor/Lands Department (CES/LD) advised that the consultants would be tasked with the identification of the exact location of the graves, whereas removal and exhumation would be done by staff of the Regional Services Department. The consultancy contracts would be reviewed and if necessary, refinements would be made to define the actual role played by consultants in the removal of graves. Consideration would be given to employing one consultancy company for the two proposed projects if this was found to be more cost-effective.

13. Responding to a member's enquiry on the rationale for selecting the two projects for the pilot scheme, CES/LD explained that they were chosen because each involved a different legislation for land acquisition. The Yuen Long - Tuen Mun corridor project at Hung Shui Kiu required land acquisition under the Crown Lands Resumption Ordinance, Cap. 124, while the Kam Tin Bypass project at Yuen Long under the Roads (Works, Use and Compensation) Ordinance, Cap. 370. The main difference between these two pieces of legislation was that under the latter, affected land owners had a right of objection to the proposed scheme, whereas this right was not provided for in the former. As such, the time limit and the approach in certain phases of land recovery would differ. In response to members, the Administration undertook to provide written information on the different mechanism for land resumption under the respective ordinances and the role played by consultants in resolving objections raised by land owners.Admin.

(Post-meeting note: The required information was provided by the Administration and circulated to members vide PLC Paper No. CB(1)1022)

14. A member expressed grave reservations over the two pilot projects. He was of the view that a single project of a smaller scale should be chosen for the pilot scheme in order to gather information expeditiously on the feasibility of contracting out land resumption work. In response, CES/LD explained that the size of a project might not be directly proportional to its complexity which would depend on the number of titles involved and the associated legislative process. The two projects were considered suitable because they were fairly straight-forward and did not involve heavy housing commitments. Consideration would be given to splitting the projects into stages such that reviews on the progress of implementation could be carried out on a milestone basis. The Principal Government Land Agent (Specialist) (PGLA) assured members that the Administration would conduct review by stages to assess what improvements could be made in the course of work. Should any problem be identified, the Administration would make suitable adjustments to address it. In any case, the Administration reserved the right to terminate the contracts.

15. A member opined that to assess the cost-effectiveness of the proposed pilot scheme, the Administration had to provide members with information on the cost for carrying out the same task by in-house staff. CES/LD said that it would be difficult to translate into monetary terms the additional manpower resources or quantify the number of additional staff that would be required to cope with the land resumption work. Two or three projects could be undertaken at the same time and the progress of works would differ for different projects. Whilst in-house cost for the work could be calculated roughly by the number of man-months, this could not be translated into the number of staff required as different staff having different expertise would be involved at different stages of a project. Very roughly, in-house resources needed to carry out the proposed projects would be around $11 million.

16. The Chairman pointed out that in anticipation of an increase in the amount of land to be resumed in the next few years to meet the housing target as pledged by the Chief Executive, there might be a need for the Lands Department to revamp and expand its staff structure instead of contracting out its work. CES/LD advised that it would not be cost-effective to over-expand the staff structure of the Lands Department given the ebb and flow of its workload. He further indicated that not all projects could be contracted out. Projects such as the Sham Tseng Link which would be a major road linking Tuen Mun, Yuen Long and Lantau Island could not be contracted out because of its magnitude and complexity and the need to coordinate a number of works departments. The same applied to the West Rail project which would involve a substantial number of staff of the Lands Department as a dedicated team. Given the sheer volume of work that needed to be completed, the Lands Department had to make priority. Contracting out certain aspects of land resumption was one of the options in resolving the problem. PAS/PEL reiterated that the purpose of implementing the pilot scheme was to assess the feasibility of contracting out part of the resumption work to help ease the pressure on Lands Department's staff resources, expedite land acquisition work and allow capital works projects to proceed more quickly. If the scheme proved to be successful, consideration would be given to contracting out land resumption work for other projects. PAS/PEL further advised that the Administration would provide additional resources to the Lands Department to cope with the core aspects of land resumption work.

17. A member expressed dissatisfaction over the Administration's presumption on the viability of the pilot scheme. He opined that there were many other ways to address the manpower problem such as hiring temporary staff, creating supernumerary posts or offering employment on a contract basis. In his view, certain functions and powers of the Administration should not be delegated to nor exercised by the private sector; land resumption work was one of these.

18. In response, PAS/PEL stated that the work to be contracted out were administrative duties and did not involve legal responsibilities. In fact, the Administration was considering contracting out to the private sector certain aspects of the processing work of small house applications. He stressed that the core aspects of the resumption work would continue to be taken up by staff of the Lands Department and that the Administration had no intention of delegating public power. CES/LD further clarified that for road projects, resumption plans would be prepared and gazetted by the Secretary for Transport. Objections would be dealt with by the Lands Department and then brought to the Executive Council for consideration. All legal requirements including posting of notices would be dealt with by staff of the Lands Department in compliance with proper resumption procedures.

19. Concluding the discussion, the Chairman requested the Administration to consider the views put forward by members before re-submitting the proposal to the Finance Committee. The Administration agreed to provide a written reply to Mr LAU Wong-fat's letter.Admin.

20. There being no other business, the meeting closed at 5:50 pm.

Provisional Legislative Council Secretariat
26 February 1998