LC Paper No. ESC56/98-99
(These minutes have been
seen by the Administration)

Ref : CB1/F/3/2

Establishment Subcommittee of the Finance Committee
of the Legislative Council
Minutes of the ninth meeting held at the Legislative Council Chamber on Wednesday, 21 April 1999, at 10:45 am

Members present :

Hon NG Leung-sing (Deputy Chairman)
Hon Michael HO Mun-ka
Hon Eric LI Ka-cheung, JP
Hon Margaret NG
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon MA Fung-kwok
Hon CHEUNG Man-kwong
Hon CHAN Kwok-keung
Hon Bernard CHAN
Hon CHAN Wing-chan
Dr Hon LEONG Che-hung, JP
Hon Andrew WONG Wang-fat, JP
Hon Jasper TSANG Yok-sing, JP
Hon Howard YOUNG, JP
Hon YEUNG Yiu-chung

Members absent :

Dr Hon Philip WONG Yu-hong (Chairman)
Hon David CHU Yu-lin
Hon Cyd HO Sau-lan
Dr Hon Raymond HO Chung-tai, JP
Dr Hon David LI Kwok-po, JP
Hon Emily LAU Wai-hing, JP
Hon CHOY So-yuk

Public officers attending :

Mrs Carrie LAM, JP
Deputy Secretary for the Treasury

Deputy Secretary for the Civil Service

Mr M J T ROWSE, JP Director,
Business and Services Promotion Unit

Principal Executive Officer, Offices of the Chief Secretary for Administration and the Financial Secretary

Miss Leonia TAI
Assistant Director, Business and Services Promotion Unit

Mr Howard LEE
Principal Assistant Secretary for Economic Services (New Airport)

Mr Alex AU
Director of Civil Aviation

Miss Amy TSE
Principal Assistant Secretary for the Treasury

Mr Kenneth T W PANG, JP
Commissioner of Rating and Valuation

Mr K C LAU Principal
Assistant Secretary for Works

Deputy Director of Architectural Services

Miss Dora FU
Principal Assistant Secretary for Economic Services (C)

Miss Vera SO, JP

Assistant Director of Agriculture and Fisheries

Mr Patrick LI
Principal Assistant Secretary for Education and Manpower (2)

Assistant Director of Education

Mrs Sarah KWOK
Principal Assistant Secretary for Security

Mr HSU King-ping, JP
Deputy Director of Fire Services

Ms Jennifer CHAN
Principal Assistant Secretary for Health and Welfare

Principal Assistant Secretary for Education and Manpower (5)

Mrs Kathryn WONG
Assistant Director of Health

Senior Principal Executive Officer, Department of Health

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

Land Registrar

Mrs Alice LEE
Registry Manager of Land Registry

Mr Patrick LAU, JP
Deputy Secretary for Planning, Environment and Lands

Director of Lands

Clerk in attendance :

Ms LEUNG Siu-kum
Chief Assistant Secretary (1)2

Staff in attendance :

Miss Polly YEUNG
Assistant Secretary General 1

Ms Anita SIT
Senior Assistant Secretary (1)8

1 As Dr Philip WONG was out of town, Mr NG Leung-sing, Deputy Chairman of the Establishment Subcommittee, chaired this meeting.

EC(1999-2000)1Proposed upgrading of one permanent post of Principal Management Services Officer (D1) to Assistant Director of Management Services (D2) in the Offices of the Chief Secretary for Administration and the Financial Secretary of Government Secretariat to better reflect its level of responsibility

2 Mrs Selina CHOW concurred that the work of the Helping Business Team (HBT) of the Business and Services Promotion Unit (BSPU) on instilling cultural changes to achieve the right mindset throughout the civil service was an important but difficult task. Whilst expressing concern about the adequacy of staffing support for the Helping Business Programme, she enquired how the upgrading of the post would enhance the implementation of the programme.

3 In reply, the Director, Business and Services Promotion Unit (D/BSPU) elaborated that the Administration accorded high priority to the work on helping business. The Financial Secretary had personally attended three symposiums on the Helping Business Programme for Policy Secretaries, heads of departments, and other senior directorate officers. As head of the HBT, the incumbent Principal Management Services Officer (PMSO) had been heavily involved in the liaison and co-ordination with the senior directorate officers of bureaux and departments in identifying new "helping business" initiatives within respective bureaux/departments. Pitching the post at a senior level would enable the post holder to perform his co-ordination and liaison duties more effectively, and in turn would help speed up the various studies and projects under the Helping Business Programme. He further advised that as the head of the HBT would play a pivotal role in steering a series of programmes aimed at inducing cultural changes at all levels of the civil service, pitching the post at a level of sufficient seniority was appropriate and necessary. The post-holder's tasks in this regard included inter alia, conducting seminars at the Civil Service Training and Development Institute and launching an award scheme to encourage suggestions from civil servants for improving existing government practices.

4 Mr CHEUNG Man-kwong enquired about the major changes that had taken place since the creation of the PMSO post in 1997 to justify the proposed upgrading of the post to D2 level. In reply, D/BSPU acknowledged that with hindsight, the head post of the HBT should have been pitched at D2 level when it was initially created. He pointed out that apart from the work requirements as set out in the paper, it was important for the Government to intensify its efforts to convey the message to the business sector that Hong Kong would continue to be the most business friendly place for investment after reunification with the Mainland. These efforts were necessary given the wrong perception among some media and commentators that the business environment of Hong Kong would deteriorate after the reunification. Mr CHEUNG expressed appreciation of the work of the HBT and considered that the projects under the Helping Business Programme could make the Government more business friendly. He therefore supported the proposal.

5 D/BSPU took note of Mrs Selina CHOW's suggestion that the HBT should reach out to small and medium enterprises with a view to canvassing views and suggestions to facilitate their operations, particularly since these enterprises had been subject to the adverse impact of the recent economic turmoil but were much less vocal than large corporations.

6 The item was voted on and endorsed.

EC(1999-2000)2Proposed creation of one supernumerary post of Administrative Officer Staff Grade C (D2) in the Business and Services Promotion Unit of the Offices of the Chief Secretary for Administration and the Financial Secretary of Government Secretariat for three years with effect from 30 April 1999 to handle the policy and legislative issues on corporatization

7 Responding to Mr CHAN Wing-chan's question on the progress of the work on corporatization, D/BSPU advised that it was only at a preliminary stage. Over the past six months, the Administration had focused on whether corporatization should be pursued as a tool for engineering the public sector reform. Having regard to the experience of other countries and the unique circumstances in Hong Kong, the Administration had decided to move ahead with corporatization of government activities, and thus proceeded to examine the appropriate legislative framework for corporatization. At this stage, the Administration was inclined to introduce a series of bills to set up individual public corporations, instead of enacting a general bill similar to the Trading Fund Ordinance under which separate resolutions would be passed for establishing individual corporations. In this connection, he advised that corporatization proposals would be introduced into the Legislative Council in the form of separate bills to facilitate thorough scrutiny of each corporatization proposal by Members.

8 D/BSPU further advised that the BSPU had just started the work on identifying government activities for corporatization and so far, over 15 departments had been approached to discuss the Helping Business Programme, including possible scope for corporatization. The post holder of the proposed supernumerary Administration Officer Staff Grade C (AOSGC) post in BSPU would examine in consultation with the respective department heads and relevant bureaux secretaries the key issues involved in corporatization with a view to bringing forward specific proposals. He added that the Administration planned to introduce the first bill on corporatization of a unit of a department by the end of the current financial year.

9 Pointing out that corporatization of public services was a controversial subject which had currently aroused strong reactions among civil servants, Mr CHAN Wing-chan opined that instead of creating a directorate post to take forward corporatization plans, the Administration should further examine the subject by commissioning a consultancy study. In response, D/BSPU re-affirmed the Administration's commitment to moving ahead with corporatization to enhance the efficiency of public services. He nevertheless acknowledged the importance of addressing staff concerns, and said that one of the critical tasks of the proposed AOSGC was to work out with the respective departmental management how best to explain to the staff side the implications of a corporatization programme and to allay any anxiety arising from misunderstanding.

10 As regards consultancy services, D/BSPU advised that consultants might be employed to help drawing up business plans for the corporatization of certain government activities, especially specialist ones. He nevertheless pointed out that the input of the proposed AOSGC on the policy and legislative aspects and in underpinning the departmental management to explain corporatization plans to staff would be required irrespective of whether consultancy services were engaged.

11 Addressing the concern about the impact of corporatization on affected staff, D/BSPU explained that corporatization was different from privatization. Privatization involved transfer of ownership of a government agency to the private sector, while corporatization could be an interim step towards privatization or an end in itself. Moreover, while it was not practicable for a private company to be managed by civil servants, there were precedent cases where civil servants were deployed, in the form of secondment or otherwise, to manage and administer corporations wholly owned by the Government. Not being bound by government rules and procedures, these corporations were able to respond to market needs more flexibly and possessed the capability and incentives to achieve improvement in efficiency and cost-effectiveness. As such, corporatization could take care of staff interests and even provide opportunities to improve their conditions of service as a result of enhanced efficiency and cost-effectiveness. D/BSPU envisaged that Members and the staff side would be in a better position to consider the implications of corporatization when a specific corporatization proposal was available. The drafting work for corporatization proposals would be a major task of the proposed AOSGC post in the coming year.

12 Mr CHAN Wing-chan was of the view that the Administration was pursuing corporatization too swiftly and stated that Members of the Hong Kong Federation of Trade Unions considered it not opportune to create a directorate post to take forward corporatization of government activities at this stage.

13 Mr Andrew WONG expressed support for the proposal on account of the need to strengthen directorate support in the BSPU to carry out studies and draw up initial proposals on corporatization. He held the view that corporatizing or contracting out, whichever was appropriate, non-core government activities should be pursued with a view to enhancing cost-effectiveness, but core government activities should not be corporatized and civil servants operating these activities should be employed on permanent terms.

14 Mrs Selina CHOW stated that Members of the Liberal Party were in support of using corporatization as a tool for public sector reform. She pointed out that as the costs of public services could only be reduced by introducing institutional changes, the users would eventually benefit under the user-pay principle. She however appreciated the concern of the staff side about the implications of corporatization on their employment and conditions of service and urged D/BSPU, being underpinned by the proposed AOSGC, to help smooth out the corporatization process by providing assistance to the departmental management in allaying staff worries.

15 Mr TSANG Yok-sing said that Members of the Democratic Alliance for Betterment of Hong Kong (DAB) were supportive of corporatizing some government activities, and the proposed creation of the AOSGC post for the purpose. He however stressed that it was important to address the concerns of the staff side in the course of implementing corporatization.

16 Mr SZETO Wah said that Members of the Democratic Party (DP) supported the present proposal. He requested the Administration to provide a list of departments with which discussions on corporatization had commenced and information on the response/feedback of these departments, as well as the order of priority amongst these departments for drawing up corporatization plans. In response, D/BSPU agreed to provide a list of departments which had been briefed by the BSPU on the programmes of BSPU including the idea of corporatization. Subject to the respective department's consent, he would also provide names of departments which had indicated interest in pursuing corporatization. He also undertook to consider the extent of information which could be provided as far as individual department's feedback was concerned. The Deputy Chairman said that upon receipt of the information paper, members who wished to follow up the subject might raise it at the relevant Panel(s).


17 Mr CHEUNG Man-kwong requested the Administration to take note of the following views of Members of DP with regard to corporatization of government activities -

  1. fees or charges of those government services corporatized should be subject to the monitoring of the Legislative Council; and

  2. the Administration should ensure that staff affected by corporatization should be given reasonable and fair treatment, and their concerns should be duly addressed in the process.

18 The item was voted on and endorsed. Mr CHAN Wing-chan voted against the proposal.

EC(1999-2000)3Proposed deletion of three permanent posts of one Airport General Manager (D2) and two Deputy Airport General Manager (D1) in the then Airport Management Division of the Civil Aviation Department

19 Mr Andrew WONG pointed out that according to the paper, all the three posts had been vacant since 29 December 1998. He enquired the reasons of the Administration for not submitting this proposal earlier. In response, the Principal Assistant Secretary for Economic Services (New Airport) (PAS/ES(NA)) explained that as no further expenditure would be incurred for the posts upon the departure of the post-holders, the Administration had given priority to other staffing proposals for submission to this Subcommittee at the previous meetings.

20 As to whether the three posts in question had remained operational for a certain period after the closure of Kai Tak Airport, the Administration advised that of the three posts, two had ceased to serve any operational functions from 6 July 1999, i.e. after the closure of Kai Tak Airport. The post-holders commenced their pre-retirement leave and end of contract leave on the same day. The remaining post continued to be required for operational functions up to 3 August 1998, and the post-holder took his pre-retirement leave thereafter. The stay of this officer between 6 July and 3 August 1998 was required for the handing-over arrangements of the systems, the passenger terminal and the runway of Kai Tak Airport to the Government Property Administrator. The Deputy Secretary for the Civil Service supplemented that as a technical arrangement, the Civil Aviation Department needed to hold the three posts to include any pre-retirement leave or end-of-contract leave accrued by the post-holders as these leave periods were salary earning.

21 At members' request, the Administration agreed to provide a supplementary information note to confirm the respective dates on which the three posts had become non operational and the respective period of pre-retirement or end-of-contract leave of the post-holders.

22 As to how the personnel structure involved in the management of Kai Tak Airport compared with that of the new airport, PAS/ES(NA) advised that an information paper on the subject was being prepared in response to a request of the Economic Services (ES) Panel at its recent meeting. He nevertheless pointed out that strict comparison between the two personnel structures was not feasible as the scale and mode of management of the two airports were very different.


23 The item was voted on and endorsed.

EC(1999-2000)4Proposed retention of the rank and supernumerary post of Rating Adviser (D3) offset by the continued temporary deletion of the rank and permanent post of Rating Adviser (D2) in the Rating and Valuation Department for two years with effect from 1 August 1999 to cope with the need for sophisticated and advanced computerisation to meet service needs

24 On the justifications for retaining the supernumerary Rating Adviser (D3) post for a further two years, the Commissioner of Rating and Valuation (CRV) advised that the D3 post was created in August 1996 to steer the implementation of the assessment and collection of Government Rent from 1 July 1997 onwards, to examine the feasibility of annual revaluation of Rates, and to prepare for individual assessment of Rates and Government Rent for public housing flats to tie in with the launch of the Tenants Purchase Scheme in February 1998. While these tasks were approaching completion, the Rating and Valuation Department (RVD) had taken up some new commitments. These new commitments included the decision to conduct general revaluation on an annual basis from 1999 onwards, an one-off Rates rebate for the first quarter of 1998-99, the taking over by RVD of the full responsibility for assessment and collection of government rent, the target implementation of Electronic Service Delivery in RVD in September 2000 etc. In view of the challenges and commitments ahead, the Administration considered it necessary to retain the supernumerary Rating Adviser (D3) post for a further two years.

25 On whether further extension of the Rating Adviser (D3) post after two years was envisaged, CRV advised that the current plan was to revert the post to the D2 level upon successful implementation of the aforesaid initiatives in the next two years.

26 The item was voted on and endorsed.

EC(1999-2000)6Proposed creation of three supernumerary posts, one Chief Architect (D1) for six years up to 31 March 2005, and one Chief Architect (Multi-disciplinary) (D1) and one Chief Quantity Surveyor (D1) for four years up to 31 March 2003 in the Architectural Services Department to oversee the implementation of the Cheung Sha Wan Wholesale Market Complex Phase 2 project and the Whole-day Primary Schools Programme respectively

27 Members noted that the present proposal consisted of parts (a) and (b). On part (a) of the proposal, Mrs Selina CHOW referred members to the joint representation from five trade associations and her letter tabled to members at the meeting regarding the Cheung Sha Wan Wholesale Market Complex Phase 2 (CSWWM 2) project, for which the Administration had proposed to create a supernumerary Chief Architect (CA) post to oversee its implementation. She stressed that the Administration had only started consultation with the affected trades on the revised plan for CSWWM 2 in January 1999 after a briefing for the ES Panel on 11 December 1998. At the said Panel meeting, she noted that the revised project plan had been drawn up without prior consultation with the trades concerned, and she therefore urged the Administration to consult the trades before proceeding with the project. According to the trades concerned, the revised plan to co-locate five different wholesale markets, namely the wholesale markets for fruit and poultry originally planned for CSWWM 2 and the wholesale markets for vegetable, fish and eggs currently accommodated at CSWWM 1, was not practicable and there had been no successful precedent of such an arrangement in other parts of the world. Mrs CHOW pointed out that the Administration however insisted on its revised plan, without taking heed of the concerns of the trades. In view of the need for further consultation with the trades and deliberation by the ES Panel on the revised plan, she considered that it was not opportune for this Subcommittee to make a decision on the present proposal for a CA post to oversee the project. She also urged the Administration to adopt an open attitude and fully consider the views expressed by all interested parties in the consultation process.

28 Noting that CSWWM 1 was only completed in 1993 at a cost of $1,193 million (at December 1998 prices), and that under the current plan, the wholesale markets in CSWWM 1 would be demolished and be reprovisioned to the proposed CSWWM 2, Mr CHEUNG Man-kwong expressed grave concern about the huge resources for CSWWM 1 which would become abortive and questioned whether this was due to poor planning of the whole CSWWM project in the past years.

29 In response to the members' comments, the Principal Assistant Secretary for Economic Services (C) stressed that the proposed changes to the CSWWM 2 project (including the suggested reprovisioning of CSWWM 1 to CSWWM 2) were not due to poor planning. She briefed members on the background of the CSWWM 2 project. The original proposal was to reprovision the Yau Ma Tei Fruit Market and the Cheung Sha Wan Temporary Wholesale Poultry Market in CSWWM 2. Subsequently, there was concern that reprovisioning of these two wholesale markets in CSWWM 2 would not realise the development potential of the subject site with a site area of 10 hectares. The Government then explored options of combining the proposed CSWWM 2 with other uses to optimise the development potential of the site. Accordingly, the Administration proposed to add mid-stream container handling facilities onto CSWWM 2. The ES Panel was briefed of the proposal in February 1996. With the funding approval of FC given in May 1997, the project was put up for tender in late 1997. However, the only tender received departed materially from the tender conditions and thus was rejected. In order to provide timely reprovisioning for the aforesaid wholesale markets and to optimise land development potential, the Administration had formulated the present new proposal. The new proposal was in line with the recommendation of the Audit Report of 1996 and a cost-benefit analysis had been undertaken. The Administration shared members' view that the trades concerned should be consulted on the design and other aspects of the project, and had therefore started the consultation process in January 1999.

30 Noting members' comments and considering that this agenda item consisted of two parts which were related to two separate projects, the Deputy Secretary for the Treasury (DS/Tsy) suggested that part (a) and part (b) of this item be dealt with separately. Members did not raise objection to the suggestion.

31 Regarding part (a), DS/Tsy concurred that the proposed CA post for six years to oversee the implementation of the CSWWM 2 project would only be justified if the project was approved to proceed as currently proposed. She noted members' view that the project required further deliberation at the ES Panel before it was submitted to the Public Works Subcommittee (PWSC) and FC for approval. However, in view of the need for a dedicated CA to undertake preparatory work including consultation, particularly in respect of the architectural design of the CSWWM 2, in the coming months, and to finalize a project proposal for submission to PWSC and FC, she proposed to shorten the duration of the supernumerary CA post sought on this occasion from six years to one year up to 31 March 2000.

32 The Director of Architectural Services (DArchS) supplemented that the scale and complexity of the CSWWM 2 project, estimated to cost some $4.5 billion (at December 1998 prices), was comparable with that of the Hong Kong Convention and Exhibition Centre Extension though the emphasis of the CSWWM 2 project was on practical and operational aspects, particularly the need to accommodate heavy traffic and intensive loading and unloading activities concentrated in a few hours of the day. He stressed that the design of the complex had to take full account of the actual operation of the trades to be accommodated and therefore it was of paramount importance for the project architect to get involved in the consultation process and in drawing up the project proposal on a full time basis. Hence, a minimum period of one year for the CA post was necessary for the forthcoming consultation and other preparatory work for the project.

33 Mrs Selina CHOW, Mr CHEUNG Man-kwong and Mr TSANG Yok-sing stated their objection to the proposal of creating the CA post for one year. Mrs CHOW commented that the consultation and other project preparatory work at this stage did not justify the input of a CA on a full time basis. Mr CHEUNG stated that he had strong reservation on the CSWWM 2 project as currently proposed and opined that creation of the CA post should only be considered by this Subcommittee after the revised project plan for CSWWM 2 had been approved by FC. He added that if considered necessary, the Administration might create the post for six months under delegated authority to undertake the necessary work.

34 In view of members' comments, DS/Tsy said that the Administration would withdraw part (a) of this item.

35 Part (a) of this item was withdrawn.

36 As regards part (b) of this item, i.e. the proposed creation of a supernumerary CA (Multi-disciplinary) and a supernumerary Chief Quantity Surveyor post up to 31 March 2003 to oversee the implementation of the Whole-day Primary Schools Programme, Mr YEUNG Yiu-chung said that Members of DAB were in support of the proposal. He sought clarification on the division of responsibilities between Architectural Services Department (ArchSD) and Education Department in the implementation of the Programme.

37 The Assistant Director of Education advised that ArchSD was responsible for the design and contract management of all school projects except for those entrusted to Housing Authority or other bodies, in which case ArchSD would still be responsible for the design while HA or the body entrusted would be responsible for supervising the construction works. A total of 73 new primary schools would be built in the years up to the year 2002-03 to achieve the target of providing whole-day primary schooling for 60% of primary school students. Construction of most of these schools would be supervised by ArchSD. On the other hand, Education Department played a project co-ordinating role and provided advice on the identification of suitable school sites and the design of schools.

38 On how the implementation of information technology in education was related to this proposal, DArchS clarified that to enable the use of computers across the curriculum, provision of additional space and facilities in new schools was required. This was not directly related to the work of the proposed CA post as the post holder was mainly concerned with project management. However, because of the increased demand in both school design and building works, the existing CA responsible for these two areas of work was no longer capable of coping with the heavy duties.

39 Part (b) of this item was voted on and endorsed.

EC(1999-2000)7Proposed creation of one permanent post of Chief Fire Officer (GDS(C)2) in the Fire Services Department to head the new Fire Safety Command

40 The item was voted on and endorsed.

EC(1999-2000)8Proposed transfer of the delegated authority, with retrospective effect from 1 April 1999, for the creation and deletion of shadow civil service ranks and posts for civil servants working in the Hospital Authority and the Vocational Training Council from the Head of Hospital Services Department to the Director of Health and from the Head of Technical Education and Industrial Training Department to the Director of Education respectively; and the deletion of one permanent post of Senior Principal Executive Officer (D2) in the Hospital Services Department

41 The item was voted on and endorsed.

EC(1999-2000)9Proposed creation of a new rank and supernumerary post of Principal Land Registration Officer (D1) offset by the deletion of one permanent post of Chief Land Registration Officer (MPS 45-49) under the Land Registry Trading Fund for a period of three years from 14 May 1999 to head the Change Project Division and to co-ordinate and manage all aspects of the Strategic Change Plan

42 Responding to Mrs Selina CHOW's question on charges of the Land Registry, the Land Registrar confirmed that the proposal would not lead to any increase in fees/charges. Instead, it was envisaged that the successful implementation of the Strategic Change Plan steered by the proposed Principal Land Registration Officer would enhance the operation of the Registry and thus would lead to cost reduction.

43 The item was voted on and endorsed.

EC(1999-2000)5Proposed retention of one supernumerary post of Government Land Agent (D2) in the Lands Department for five years with effect from 10 June 1999 for continued directorate support to tackle the land use environmental problems in the New Territories

44 As to how the proposed extension period (five years up to June 2004) of the supernumerary Government Land Agent (GLA) (D2) post would tie in with the 10-year rolling programme to clean up black spots in the rural areas, the Director of Lands advised that this area of work had started in 1994 though the 10-year rolling programme was drawn up in 1996. It was envisaged that with the operational experience gained in the past five years, the Task Force (Black Spots) headed by the GLA would be able to speed up the black spots clean-up work in the coming years, thus enabling the programme to be completed ahead of schedule. Nevertheless, the continued need for the Task Force and the GLA post beyond 2004 would be reviewed in due course, having regard to the circumstances at that time.

45 The item was voted on and endorsed.

46 The Subcommittee was adjourned at 12:32 p.m.

Legislative Council Secretariat
6 May 1999