For information
on 9 November 1998

Legislative Council Panel on
Information Technology & Broadcasting

Film Development Fund


This paper seeks Members' views on the setting up of a Film Development Fund.


2. The Chief Executive announced in his Policy Address delivered on 7 October 1998 the setting up of a $100 million Film Development Fund in 1999 to facilitate the healthy and long-term development of the local film industry and to enhance its competitiveness through manpower training, encouraging the use of advanced technology by the industry and improving the professional capabilities of its workforce.


3. Having consulted the Film Services Advisory Committee (FSAC), we propose that the Film Development Fund (the Fund) should adopt the following mode of operation.

Scope of the Fund

4. Government's objective of setting up the Fund is to achieve the following major goals through funding of projects :

  1. to enhance the professional and technological capabilities of the local film industry;

  2. to improve the professional skills of the industry's workforce;

  3. to encourage the production of more creative and diversified films;

  4. to facilitate the industry in the mastering and application of advanced technology so as to enhance the audio and visual effects of films;

  5. to stimulate further improvement in the quality of local film production and services; and

  6. to improve the production and operation environment of the industry.
Funds would only be granted to projects that can achieve the aforesaid goals.

5. In general, approved funds can only be used as non-recurrent expenditure. Projects involving recurrent expenditures (such as salaries and other administrative expenses) would also be considered if an applicant organisation is able to demonstrate that the expenses are directly incurred by the project under application and would only be required within a specified finite duration, or the project would be self-financing after a certain period of time.

Amount of Fund

6. The Fund amounts to $100 million. If the proposal is approved by the Finance Committee of the Legislative Council, the Fund would be established in April 1999. We propose to operate the Fund over a period of 5 years.

Operation of the Fund

7. The Fund would be administered by the Film Services Office (FSO) of the Television and Entertainment Licensing Authority (TELA). With regard to the approval of applications, we propose to set up a Projects Vetting Committee (the Committee) under the FSAC to assess applications and prescribe the terms and conditions of funding. Based on the Committee's recommendations, the Commissioner for Television and Entertainment Licensing (CTEL) would decide whether to approve the applications and disburse funds. The terms of reference and composition of the proposed Committee are set out in Annex A.

8. We propose to empower the Committee to approve an application for funding not exceeding $10 million. If funding applied for exceeds $10 million, the consent of the FSAC must be obtained before the application is submitted to the Finance Committee for approval.

9. No fee will be charged for submission of applications. An applicant may submit a number of applications. The procedures for processing an application is set out in Annex B.

Criteria for Approving Applications

10. Proposed criteria for approving applications are as follows:

  1. An applicant should normally be a locally registered institution/organisation engaged in film business or a related body. The FSO can also apply for funding.

  2. Projects under application must be beneficial to the overall development of the local film industry, such as enhancing the competitiveness of the local film industry.

  3. Benefits accrued from the projects must serve the interests of the entire film industry, and not just an individual private company or a consortium of private companies.

  4. Projects should mainly be non-profit making by nature. Special consideration could be given for projects that can ultimately be self-financing.

  5. Funds approved cannot be used to create any civil service posts.

  6. In examining an application, the following must be taken into consideration:

    1. the benefits that a project may bring to the local film industry;

    2. the need for such a project;

    3. the technical and project management capabilities of the applicant institution/organisation;

    4. whether the implementation schedule of the proposed project is well planned and whether the time required for implementation is reasonable;

    5. whether the proposed budget is reasonable and realistic;

    6. whether there is/will be any duplication in terms of the work carried out by other institutions; and

    7. for a project involving recurrent expenditures (such as salaries and other administrative expenses), the period required for such expenditures and whether the project can be self-financing after a certain period of time.
Monitoring Mechanism

11. Organisations that have been granted funds must keep a separate account for each funded project and submit progress reports to the FSO at regular intervals. The FSO would closely monitor the progress of implementation of the funded projects to ensure that the projects are carried out as scheduled. The staff of FSO would conduct regular checks or inspections if deemed appropriate. Any substantial change to the approved budget, scope and implementation timetable of a project must have the approval of the Committee. CTEL would submit an assessment report on each completed project to the Committee and the FSAC.


12. After consulting Members' views, we intend to seek funding from the Finance Committee of the Legislative Council on 27 November. If the funding application is approved, we would hold a seminar for the film industry to explain to them in details the scope and operation of the Fund to facilitate their making best use of the Fund.

Information Technology and Broadcasting Bureau
26 October 1998

Annex A

Film Development Fund
Projects Vetting Committee

Terms of Reference

  1. To consider and vet applications for funding support and prescribe the form and terms for approval of funds; if the amount applied for exceeds $10 million, to formulate recommendations for consideration by the FSAC;

  2. To monitor the implementation of approved projects and submit reports to the FSAC; and

  3. To review the funding criteria of the Fund if necessary, and submit the recommendations to the FSAC for consideration.