LC Paper No. FC43/98-99
(These minutes have been
seen by the Administration)
Ref : CB1/F/1/2
Finance Committee of the Legislative Council
Minutes of the seventh meeting
held at the Legislative Council Chamber
on Friday, 30 October 1998, at 2:30 pm
Members present :
Hon Ronald ARCULLI, JP (Chairman)
Hon CHAN Kam-lam (Deputy Chairman)
Hon Kenneth TING Woo-shou, JP
Hon James TIEN Pei-chun, JP
Hon David CHU Yu-lin
Hon HO Sai-chu, JP
Hon Cyd HO Sau-lan
Hon Edward HO Sing-tin, JP
Hon Albert HO Chun-yan
Hon Michael HO Mun-ka
Dr Hon Raymond HO Chung-tai, JP
Hon LEE Wing-tat
Hon LEE Cheuk-yan
Hon Martin LEE Chu-ming, SC, JP
Hon Eric LI Ka-cheung, JP
Hon LEE Kai-ming, JP
Hon Fred LI Wah-ming
Dr Hon LUI Ming-wah, JP
Hon NG Leung-sing
Prof Hon NG Ching-fai
Hon Margaret NG
Hon MA Fung-kwok
Hon James TO Kun-sun
Hon CHEUNG Man-kwong
Hon Ambrose CHEUNG Wing-sum, JP
Hon HUI Cheung-ching
Hon Christine LOH
Hon CHAN Kwok-keung
Hon CHAN Yuen-han
Hon Bernard CHAN
Hon CHAN Wing-chan
Dr Hon LEONG Che-hung, JP
Hon LEUNG Yiu-chung
Hon Gary CHENG Kai-nam
Hon SIN Chung-kai
Hon Andrew WONG Wang-fat, JP
Dr Hon Philip WONG Yu-hong
Hon Jasper TSANG Yok-sing, JP
Dr Hon YEUNG Sum
Hon YEUNG Yiu-chung
Hon LAU Chin-shek, JP
Hon LAU Kong-wah
Hon Mrs Miriam LAU Kin-yee, JP
Hon Ambrose LAU Hon-chuen, JP
Hon Emily LAU Wai-hing, JP
Hon CHOY So-yuk
Hon Andrew CHENG Kar-foo
Hon SZETO Wah
Hon LAW Chi-kwong, JP
Hon TAM Yiu-chung, JP
Hon FUNG Chi-kin
Members absent :
Dr Hon David LI Kwok-po, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon WONG Yung-kan
Hon Howard YOUNG, JP
Hon LAU Wong-fat, GBS, JP
Hon Timothy FOK Tsun-ting, JP
Public officers attending :
Clerk in attendance :
- Miss Denise YUE, JP
- Secretary for the Treasury
- Mrs Carrie LAM, JP
- Deputy Secretary for the Treasury
- Mr K K LAM
- Principal Executive Officer (General), Finance Bureau
- Miss Monica CHEN
- Principal Assistant Secretary for Health and Welfare (Elderly Services 1)
- Mr Laurie LO
- Principal Assistant Secretary for Health and Welfare (Welfare 1)
- Mr KWAN Pak-lam
- Deputy Director of Architectural Services
- Mrs June SHERRY
- Assistant Director of Social Welfare (Subventions)
- Mrs Eliza LEUNG
- Assistant Director of Social Welfare (Elderly and Medical Social Services)
- Mr Gregory LEUNG, JP
- Deputy Secretary for Health and Welfare
- Dr T A SAW, JP
- Deputy Director of Health
- Dr W L LIM, JP
- Consultant Medical Microbiologist, Department of Health
- Mr Stephen MAK, JP
- Assistant Director of Information Technology Services
- Mr Howard CHAN
- Principal Assistant Secretary for Planning, Environment and Lands
- Mr TSE Chin-wan
- Assistant Director of Environmental Protection
- Dr LAM Kwok-lun, Alain
- Principal Environmental Protection Officer, Environmental Protection Department
Staff in attendance :
- Ms Pauline NG
- Assistant Secretary General 1
- Miss Polly YEUNG
- Chief Assistant Secretary (1)3
- Ms Sarah YUEN
- Senior Assistant Secretary (1)4
Item No. 1 - FCR(98-99)36
RECOMMENDATIONS OF THE ESTABLISHMENT SUBCOMMITTEE MADE ON 14 OCTOBER 1998
The Committee approved the proposal.
Item No. 2 - FCR(98-99)37
RECOMMENDATIONS OF THE PUBLIC WORKS
SUBCOMMITTEE MADE ON 7 OCTOBER 1998
2 The Committee approved the proposal.
Item No. 3 - FCR(98-99)38
HEAD 341 - NON-RECURRENT GRANTS
Subhead 820 Sheng Kung Hui Diocesan Welfare Council
3 A member enquired whether the site could be better utilized to increase the capacity of the proposed welfare complex so as to speed up the provision of residential care places for the elderly. In response, the Deputy Director of Architectural Services (DD of Arch S) explained that as the proposed building had to be set back by some 10 metres on the present triangular-shaped site, it would be difficult to increase the size of the welfare complex.
4 On whether further funding would be sought for similar projects, the Assistant Director of Social Welfare (Subventions) (AD of SW(S)) said that there would probably be two more applications in 1998-99 for grant from the Lotteries Fund for similar purposes. In view of the relatively high costs and long time taken for constructing purpose-built complexes, the Government's policy was to reserve suitable premises at public housing estates for providing care-and-attention (C&A) homes and multi-service centres for the elderly.
5 Regarding the monitoring role of the Government in the proposed project, AD of SW(S) and DD of Arch S confirmed that Sheng Kung Hui Diocesan Welfare Council (DWC) would engage its own contractors for constructing, furnishing and equipping the proposed purpose-built elderly service complex. The Government would screen the relevant contracts entered into by DWC and its contractors and ensure that the contractual arrangements were in order. Building plans would require the approval of the Buildings Department (BD) in the same way as other private property developments. In the course of construction, the Social Welfare Department would closely monitor progress by holding regular meetings with DWC and its contractors. Where necessary, technical advice would be sought from relevant departments such as the BD. Upon the completion of the project, the Government would assess whether the project had been duly delivered and whether the expenditures incurred were reasonable.
6 Noting that the Government had little role to play in overseeing the project, a member sought clarification on DWC's responsibility in respect of the 20% of the capital cost, in particular when the final cost of the project exceeded its original budget. Another member also enquired if DWC had already acquired the necessary funds for the project.
|7 In response, AD of SW(S) said that DWC was in the course of raising funds for its 20% share of the cost. She undertook to confirm with DWC the amount of funds available for the purpose and inform members in due course. As regards the 20% contribution, AD of SW(S) informed members that the current arrangement with DWC was in line with the existing practice on the naming of a capital project. DWC would be responsible for 20% of the total cost of the project after completion and this 20% portion would be utilised first. Members further noted that in the past, where a project exceeded its budgeted cost, the shortfall might be topped up by the subvented organization; or in deserving cases, the Administration would seek the Finance Committee's approval for additional grant from the Lotteries Fund.
8 On the question of costs for the present project, DD of Arch S clarified that in computing the net building cost per square metre, the Administration would discount the cost relating to foundation and sub-structure, plumbing and drainage and external works (amounting to some $1.7 million in the present project). The estimated unit cost of some $9,900 per square metre, as well as the estimated capital cost and recurrent cost of about $500,000 and $100,000 respectively per place were considered reasonable. At the Chairman's request, the Administration would provide further information on costs for comparable projects for members' reference.
9 Given the current fall in construction costs, a member queried whether it was realistic to apply a price adjustment factor ranging from 1.1.% to 1.3% on the estimated cashflow of the project over the three-year period commencing 1999-2000. In response, DD of Arch S explained that in estimating the overall cost, the Administration had taken into account not only the prevailing tender price index, but also the factor of risk analysis. He pointed out that a price adjustment factor to cater for future changes was necessary because some of the works would be tendered at a later stage. DD of Arch S further assured members that the cost in question was only an estimated figure and depending on the successful bidding price, the actual cost required might be lower. As regards the estimated expenditure for professional fees and site supervision, which a member considered to be on the high side, might also turn out to be lower if the tender result for the work is lower.
10 On the proposed staffing arrangements, AD of SW(S) advised that the future C&A home would have a staff of 78, most of whom would be nursing staff and personal care workers. The multi-service centre would have 34 staff, including social workers and home helpers, on its establishment. She added that the manning scale was in line with that for subvented C&A homes and multi-service centres for the elderly.
11 Responding to a member's enquiry about the criteria in selecting subvented organizations in undertaking a joint venture of this nature, the Assistant Director of Social Welfare (Elderly and Medical Social Services) (AD of SW(E&MSS)) advised that on some occasions, the Administration might invite eligible organizations to apply for undertaking a certain project. Alternatively, an interested organization could approach the Government with its proposal. She informed members that the present project was of the latter type.
12 On some members' queries on the lack of a set of objective criteria and open procedure in determining an organization's eligibility to undertake welfare projects such as the present one, AD of SW(E&MSS) explained that generally speaking, the major criteria included the past service record of the applicant organization, its financial commitment, as well as its capability to deliver the required standard of service in future. She supplemented that all applications were vetted by a selection committee. Besides, applicants were entitled to seek an explanation from the committee on why certain applications succeeded or failed.
13 In view of some members' concerns about the Government's financial commitment and the lack of transparency in selecting DWC to be the sponsoring organization, Mr Eric LI pointed out that cost sharing had been a long-standing practice by which the Government and the subvented sector collaborated in delivering large-scale welfare projects. As far as funding for welfare projects was concerned, he stressed that the Government was not often presented with competing bids from non-government organizations which had the necessary credibility and were prepared to sponsor 20% of the capital costs. The recent economic downturn had further increased the difficulty in securing funding support. Mr LI therefore urged members to take these factors into account when considering the present proposal.
|14 In this connection, the Chairman drew members' attention to the shortfall in residential care places which the present proposal sought to reduce. He further advised that policy issues related to the participation of subvented/non-government organizations in delivering large-scale welfare projects could be pursued at the Welfare Services Panel.
15 The Committee approved the proposal.
Item No. 4 - FCR(98-99)39
CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERIZATION
Department of Health
New Subhead "Laboratory Information System"
16 Some members expressed concern on whether any slippage in the implementation of the proposed Laboratory Information System (LIS) would affect services to the public and whether the LIS could be implemented in time to tie in with the operation of the two central laboratories in Lek Yuen and Shek Kip Mei.
17. In response, the Deputy Director of Health (DD of H) said that the LIS could be implemented on schedule. In the unlikely event of slippage, there would be adequate manpower to continue with the present manual method. He pointed out that the deletion of posts would only commence six months after the live run of the system, by which time all teething problems should have been identified and resolved.
18. As regards the 32 posts proposed to be deleted from Department of Health (DH)'s existing establishment, DD of H advised that apart from natural wastage, the department would accommodate the surplus staff by transferring affected General Grade staff to other posts within or without the DH, while some 18 departmental technical staff would hopefully be deployed to fill new posts created to handle increased workload. He reiterated the DH's intention to avoid redundancy and that staff had all along been involved and kept informed of the computerisation project and the resultant efficiency gain. At a member's request, DD of H agreed to provide further information on the redeployment or otherwise of the 18 technical staff when such arrangements were ascertained at a later stage.
19. Referring to the functions of the LIS which would only improve the support system, members questioned the cost-effectiveness of the LIS, and asked whether there were any plans to link up with the general out-patient clinics (OPCs) of the DH and the computer system of the Hospital Authority (HA) so as to enhance overall patient care.
20. In response, DD of H highlighted anticipated benefits such as speedy retrieval of a patient's current and previous test results from different specialties, as well as improved data collection and analysis which would contribute to an improved standard of patient care. He also confirmed that after implementation of the LIS, manual jobs would be considerably reduced to the minimum. In this regard, a member called on the Administration to pay attention to the productivity gain, if any, resulting from the reduction in turnaround time in the testing processes.
21. On the issue of system interface, DD of H advised that the LIS had the capability to link up with out-stations of the DH including the OPCs through the conventional fax and modem. Members also noted the Deputy Secretary for Health and Welfare's remark that whether the LIS should be fully interfaced with the OPCs should depend on whether this would result in cost benefits. He said that to maintain communication through conventional methods of fax and telephone might be more cost-effective. DD of H nevertheless added that it was the DH's medium-term plan to link up the LIS with the Family Health Service and the Student Health Service within the department.
22. As regards linkage with the HA system, DD of H advised that the LIS had such capability, subject to the compatibility of the HA system with the LIS in terms of hardware configuration and the level of security. In reply to a member's enquiry about plans to enable the LIS to capture data from the database of the HA system for enhancing health and disease surveillance, DD of H clarified that the proposed LIS was mainly for managing data in a laboratory setting. The canvassing of information on disease patterns territory-wide and in hospitals would be catered for by the Public Health Information System highlighted in the 1998 Policy Address and in respect of which funding would be separately sought.
23. In reply to a member's enquiry about the estimated recurrent cost of about $1.2 million for system and technical support services, the Assistant Director of Information Technology Services explained that the expenditure would include the provision of support service for system disaster recovery, which was a common contingency arrangement for major computer systems.
24. The Committee approved the proposal.
Item No. 5 - FCR(98-99)40
HEAD 44 - ENVIRONMENTAL PROTECTION DEPARTMENT
Subhead 700 General other non-recurrent
Consultancy Study on the Air Pollution Problems in the Pearl River Delta Region
25. Whilst indicating support for the proposed consultancy study, a member enquired whether consideration had been given to commissioning local universities to conduct the study with a view to saving costs and developing local research capabilities. In reply, the Assistant Director of Environmental Protection (AD of EP) admitted that the Administration was aware that the Hong Kong University of Science and Technology and the Polytechnic University had conducted researches on air pollution in the Pearl River Delta Region (the Region) but of different emphasis and objectives. As the consultancy study would be commissioned through a competitive bidding system, interested academic institutions were welcome to be in partnership with practising consultants.
26. In reply to a member's enquiry about the use of the multiplier factor of 3.0 in estimating consultant's fees, the Deputy Secretary for the Treasury (DS/Tsy) advised that in accordance with the standard method adopted since April 1996, the following set of multiplier factors had been applied to the calculation of salaries for professional and technical staff to cover the consultant's overhead costs and profits:
- 3.0 for staff employed in the consultant's offices
- 2.5 for staff seconded to work in Government offices
- 2.1 for site staff supplied by the consultants
27. DS/Tsy said that in view of the possible drop in the cost of doing business in Hong Kong as a result of the current economic downturn, the Administration was at present reviewing whether the multiplier factor of 3.0 was still appropriate in reflecting consultancy firms' overhead expenditure in the estimated total consultancy costs. Nevertheless, the fee level thus worked out was only an estimated figure and the actual cost would be subject to competitive bidding and in this case, on a lump sum fixed price basis. She further pointed out that according to past experience, the average tendered cost of the relevant consultancies was about 80% of the cost estimate computed on the basis of the standard formula.
28. On the member's concern about the Administration's general policy on and criteria for commissioning consultancies instead of hiring contract staff direct on a project basis, the Chairman suggested that interested members might pursue the subject at the relevant Panel(s).
29. In reply to some members' enquiry about the availability and collection of data on air pollution, AD of EP confirmed that major data relating to Hong Kong had already been collected by the Environmental Protection Department (EPD) in the course of its work. With the support of the Guangdong Environmental Protection Bureau, he did not envisage any serious difficulty in collecting necessary data in Guangdong. In view of a member's query about the need for the proposed consultancy study, AD of EP pointed out although local data was available, it was necessary to collect corresponding data in the Mainland to facilitate a joint study. Moreover, it was necessary to develop a database of both available and newly collected data for further analysis.
30. Acknowledging the seriousness of the air pollution problem, a member stressed that apart from collecting and analyzing data, the study should also seek to identify timely improvement or control measures to prevent further deterioration in air quality in the Region. In the selection of consultant for the study, the Administration should give due weighting to the expertise and capability of the consultant concerned in tackling air pollution problems, rather than commissioning the study on cost considerations only. In this respect, the Chairman suggested that the Administration might consider including a requirement in the consultancy brief that where feasible, interim improvement measures should be proposed.
31. AD of EP assured members that in the selection of consultant, whether local or overseas, the technical quality of the proposal, competency and experience of the team would usually be given more weighting than the proposed fees.
32. Some members raised questions on the scope, timing and approaches of the study, expressing concerns about cross-border cooperation and whether the study should tie in with the switch to unleaded petrol in Guangdong Province in the year 2000. In response, AD of EP advised as follows:
- As part of a joint study on air quality in the Region, the present study would focus on air pollution problems relevant to Hong Kong but collection of relevant data in the Mainland would also be required;
- upon completion of the respective study by Hong Kong and the Mainland, a joint final report would be prepared for consideration and approval by the Hong Kong-Guangdong Environmental Protection Liaison Group; and
- as control measures were implemented from time to time by both the Hong Kong and Mainland authorities to alleviate pollution problems, it might not be worthwhile to defer the present study to await the outcome of a specific improvement measure.
33. A member referred to the period of six months as stated in the discussion paper and questioned whether this would be adequate for conducting the study. In response, AD of EP clarified that the main study work would in fact take about 18 months for collecting relevant data at different times, locations and altitudes.
34. On the breakdown of study fees at enclosure 4, a member pointed out that the total cost stated therein was different from that provided previously to the Environmental Affairs Panel. AD of EP explained that the difference was mainly one of presentation. In the paper to the Panel, "inflation allowance" had been factored in under the various items for staff costs while in the present breakdown, the said factor had been included under the item of "miscellaneous expenses and contingencies". AD of EP further clarified that out-of-pocket expenses for hiring of equipment had not been provided for the "collection and collation of baseline information" as the latter would be done mainly by questionnaire, with minimal need for equipment.
35. The Committee approved the proposal.
36. The Committee was adjourned at 4:55 pm.
Legislative Council Secretariat
31 December 1998