For Information

Panel on Economic Services
Panel on Home Affairs
Panel on Planning, Lands and Works
Panel on Public Service

Joint Meeting on 14 April 1999

Follow-up Actions taken or to be taken
in respect of the Recommendations in the
Three Inquiry Reports on the Opening of the New Airport


Members have requested a comprehensive information paper detailing the follow-up actions taken or to be taken in respect of all the recommendations made in the reports of the Legislative Council Select Committee, the Commission of Inquiry and the Ombudsman.

2. The Administration and the Airport Authority (AA) share the hope of the Select Committee that Hong Kong would benefit from the lessons that can be learned from the opening of the new airport. With this objective in mind, the Administration and the AA have studied carefully the recommendations in the three inquiry reports and taken follow-up actions.

3. This paper reports on the follow-up actions. It has expanded and updated the information contained in the progress report which was sent to the Legislative Council on 20 March 1999.

Follow-up Actions by the Administration

Guidelines for the Development of Major Infrastructure Projects

4. We are finalising a set of guidelines for the development of major infrastructure projects based on the recommendations and observations in the three reports as well as experience gained from the Airport Core Programme. Once finalized, the guidelines will be circulated by the Works Bureau to all relevant Bureaux and Departments. It is expected that the guidelines would be circulated in April 1999.

5. The guidelines, by their very nature, are of general applicability and are meant to be taken with common sense and flexibility to suit the circumstances of individual projects. They are intended to cover all stages of a project from the selection of delivery agent to operations. In addition, they contain special features such as project auditing, risk assessment and contingency planning. Given the diverse nature and scale of different projects, it would not be appropriate to require every one of them to follow all the details in the guidelines. Due consideration should be given to factors such as the complexity of the project, the number of parties involved and the number of interfaces. A brief description of the key elements in the draft guidelines is at Annex.

Governing Bodies of Executive Authorities

6. There are recommendations that governing bodies must be given authority commensurate with their responsibility, including power to hire and fire, and that Government should deal directly with the governing bodies in order not to undermine their authority. So far as the Airport Authority is concerned, the Board has been given the necessary powers under the Airport Authority Ordinance, including the power of hiring or firing any staff except that the hiring or firing of the Chief Executive Officer (CEO) is subject to the prior approval of the Chief Executive. This exception is appropriate since the CEO is an ex officio member of the Board. On dealing with the AA, Government will deal directly with the Board rather than the management as far as practicable. In addition, the AA management no longer attend meetings of the Airport Development Steering Committee since the Committee has ceased to operate from February 1999. The Administration will further study these recommendations and consider what other actions need to be taken in respect of other executive authorities.

7. On appointments and reappointments to governing bodies of executive authorities, the Administration will assess carefully the suitability of prospective appointees, taking into account factors such as their personal abilities, expertise, experience, integrity and commitment to public service. The Administration will also monitor the performance of appointees, including their attendance records, to facilitate consideration of their suitability for reappointment. Bureaux and Departments will be reminded of the need to assess carefully the suitability of prospective appointees, to keep them fully informed of their areas of responsibility before their appointment and to evaluate their performance and commitment during their tenure for considering reappointment.

8. The same approach will be taken in considering appointments and reappointments to the Board of the Airport Authority, the Members of which are appointed by the Chief Executive.

Personal Responsibility of Individual Civil Servants

9. The Chief Executive has studied the comments in the three reports on the question of the personal responsibility of individual civil servants involved in the issue, having regard to the Government's established procedures to deal with misconduct, negligence or dereliction of duty. After careful consideration, the Chief Executive has concluded that there is no prima facie evidence to support disciplinary action on any of the officers concerned since there is clearly no question of misconduct. There are allegations of negligence or dereliction of duties. The Chief Executive is satisfied that the officers concerned have all acted in good faith and performed their duties with due diligence.

Delineation of power and responsibility
between Government and the Airport Authority

10. The Administration has addressed the question about the delineation of power and responsibility between Government and the Airport Authority (AA) over the development and operation of the airport. The AA is a statutory body set up under the Airport Authority Ordinance to provide, operate, develop and maintain the airport and conduct its business according to prudent commercial principles. On such matters which are within its responsibility, it should function independently, free from Government intervention.

11. Government Members on the AA Board will continue to work with the non-Government Members as a team in bringing about improvements to airport operations. On technical, operational and management matters of the airport that should be handled by the AA, Government Policy Bureaux and Departments are also ready to support and assist the AA in areas under their respective purview. On those matters over which the Government has responsibility (such as the policy aspects of civil aviation, air traffic control and the issue of the aerodrome licence), Government will continue to deal with them.

Aircraft Noise

12. The Civil Aviation Department (CAD) has been monitoring the noise levels at various districts. The measurements have confirmed that these districts are outside the noise exposure forecast (NEF) 25 contour and therefore the noise impact is within the acceptable standard. The only exception is Sha Lo Wan but the residents concerned have been offered noise mitigating measures.

13. The second runway is expected to be available for full operational use in August 1999. Drawing from the lessons learned at the opening of the new airport, CAD has been conducting briefings to the Provisional District Boards of the affected areas such as Shatin, Tsuen Wan, Kwai Tsing and Tuen Mun starting from March 1999 to discuss with them the possibility of noise generated by aircraft using the second runway.

Follow-up Actions by the Airport Authority

14. The AA fully agrees that it has to strengthen the working relationship with its franchisees, and in particular, Hong Kong Air Cargo Terminals Ltd. The AA has commenced discussions with the two cargo terminal operators with a view to introducing a process that goes beyond normal commercial contracts monitoring. Discussions of details are taking place. The enhanced monitoring scheme aims to help the AA to oversee the safe and efficient handling of air cargo by being kept notified of problems in advance and monitoring the resolution of these problems.

15. On top of the Airport Facilitation Committee that is already in place, the AA is also strengthening its liaison and co-ordination mechanism with its other operational partners through a number of specific working committees to address issues such as passenger handling, baggage handling, airfield operation and safety. The Airport Facilitation Committee and these committees provide a useful forum to discuss a wide range of technical and operational details of airport operations. The AA also agrees with the Ombudsman that it would be useful to have a liaison group representing the views of business partners and airport users. This would be next on the agenda when the various set ups involving operational partners mentioned above are up and running.

16. The AA is mindful of the pitfall of having too many committees with overlapping functions and responsibilities. Division heads have been tasked to review the number and the terms of reference of the committees under their individual purview with a view to delineating those that have been become defunct and rationalising the structures and the terms of reference of others that still serve a useful purpose.

17. Under the leadership of its Management and Operations Consultant, Mr Richard Siegel, the AA has already started a comprehensive review of its crisis management plans, including contingency arrangements. The comprehensive review is scheduled for completion by the end of June. The review on those arrangements and procedures related to aircraft incidents and accident have already been completed.

18. The AA is committed to improving the service standards at the airport. It is also conscious of the need for stringent budgetary controls in the present economic climate. To ensure that the AA will run as a highly efficient organisation, it is considering, with the help of a consultant, further streamlining of the management structure in the light of actual operating experience. The AA expects to reach a firm decision by June this year. In this connection, the AA is fully aware of the significance of a harmonious interaction of personalities in the working place.

19. On the basis of advice from independent legal experts, the AA had terminated with immediate effect the contract of Mr Kiron Chatterjee, its former Head of Information Technology and did not renew the contract of Mr Chern Heed, its former Airport Management Director. It had also notified Mr K C Tsui, Project Manager, Electrical and Mechanical Works, of the remarks made by the Select Committee and that his performance would be closely observed.

20. The AA will improve its records management to ensure that papers and documents are kept for easy and ready reference in a secure and efficient manner. The AA has specifically tasked its Management Services personnel to review the various records keeping strategies in different divisions with a view to improving and streamlining the arrangements.

21. Meanwhile, the AA has strengthened its IT support and resources, including external technical resources, to help to resolve the Y2K issue. The AA has also engaged a Y2K consultant to provide guidance and assistance to its programme, particularly in the areas of programme methodology, strategy and organisation, and contingency planning.

22. In its Y2K programme, the AA has put into actual application the strategy of getting the users closely involved. Various technical and operational staff are assigned the responsibility of managing individual Y2K projects under the programme on top of their day-to-day duties. Apart from being involved in the Y2K compliance tests and rectification work, they are also responsible for developing and refining contingency measures to ensure the continuity of airport operation in case of disruptions caused by Y2K exercises. The 9th of September this year will be the first significant occasion to test the planning and co-ordination efforts put in the exercise.

23. The AA also noted the importance of allowing ample time for testing and commissioning of new systems incorporating advanced technology and of ensuring a smooth flow of operational arrangements following the completion of a project. Detailed and meticulous planning and co-ordination would be accorded due priority. Where appropriate, it will also consider engaging an expert for an independent assessment. The AA would ensure that staff at various levels, its contractors and business partners also take up ownership of the facilities, systems and procedures, following the existing practice.

24. The AA intends to publicise performance pledges related to various services provided at the airport, whether by itself or other service providers, a year after actual operation of the airport. It is also in the process of preparing an information leaflet listing the principal service providers at the airport and the relevant telephone number.

25. The airport is in operation. Naturally, the emphasis is on its safe, secure and efficient operation as highlighted in the long title of the Airport Authority Ordinance. Publicity events, if any, will have to manage within the parameters that normal operations and passenger convenience would not be compromised.

26. The AA recognises the importance of smooth airport operations to the community at large. It will be frank and forthcoming in its messages to the public. Public suggestions and complaints are important tools in understanding the general perception of the facilities and services at the airport, in measuring the effectiveness of its improvement works, and not least, in helping the management to identify areas for improvements. The AA will continue to build up its complaints handling mechanism and induce a healthy attitude towards complaints among its staff.

27. The AA also noted the other comments and recommendations in the three reports, not least that of the capability of responding to the challenge of change. Apart from being sensitive to the need of change, the AA would also ensure that its staff have access to the latest knowledge and expertise through different training programmes.

Update on the Operations of the New Airport

28. The new airport has been operating at high service standards in the past few months and has received many favourable comments from passengers. 90% of the passengers can complete their immigration check-in within 15 minutes and collect their luggage within 10 minutes upon arrival of their aircraft. Over the Lunar New Year Holidays, a record number of passengers passed through the airport. The highest daily numbers handled are 117,000 passengers and 96,000 bags. Throughout this period, the services remained at high standards. This has demonstrated the ability of the new airport to operate smoothly even under heavy traffic pressure.

29. There are certain areas where further works and improvements still need to be carried out and closely monitored, e.g. the flight information display system. The AA is conscious of such needs and follow-up action is being taken.

Economic Services Bureau
Home Affairs Bureau
Works Bureau
Civil Service Bureau
Airport Authority

8 April 1999


Brief Description of the Key Elements in the Draft Guidelines

Selecting the Most Appropriate Institutional Entity of Delivery

- The choices of selecting a government department, a statutory body, a private enterprise or other form of agreement to undertake a large-scale project should be compared and evaluated at the outset.

 Clear Demarcation of Responsibility and Authority

- The responsibility and authority between Government and the selected works agent should be clearly demarcated and promulgated. There should also be clear and precise control procedures for tracking the works progress of the project.

 Good Governance as a General Requirement

- Proper governance by the Board of a statutory works agent is of paramount importance. The chairman and members of the Board should be knowledgeable about the main functional areas of project or have ready access to expert advice independent of the project management team. The Board must be given authority commensurate with its responsibilities.

 A Unifying Project Management Approach

- For large-scale and complex projects, a central point of monitoring and control in the form of a project management office should be set up within the government or the statutory body, as justified by circumstances. The office shall have sufficient authority over programme, scope, schedule and budgets. In addition, there should be a high-level Steering Committee overseeing progress of the project and keeping in touch with the Board of the works agent, although it is important that the role of the Steering Committee is clearly defined and that statutory bodies and/or works agents appreciate that responsibility for the implementation of the work rests with them.

Check and Balance

- This project management office, independent of the works agent, working direct to the Steering Committee should operate as check and balance by way of exercising overall programme management and control. This section also provides guidelines on contracting out certain functions and the need to involve the ultimate operator of the facilities early. It also emphasises the need for verification of the readiness of the project including training and testing, where appropriate by an independent experts audit.

 Transparency and Coordination

- Throughout the project management phase, all information relating to the project such as reports and information notes should be fully exchangeable amongst all relevant parties to facilitate effective monitoring of progress. This section also highlights the need to avoid too many committees with overlapping functions and responsibilities.

 Programme Management

- The works agent must provide the project management office with a comprehensive master programme, targets and critical milestones incorporated into a baseline implementation plan which is updated and statused on a regular basis for control and monitoring purpose. Critical items should also be identified and reported on with follow up actions.

 Managing the Transition from Construction to Operation

- An executive agent should be assigned to coordinate all transitional activities for the project such as testing, commissioning, training and trials on a comprehensive basis.

 An International Perspective

- Consideration should be given to the employment of international experts if local resources are not available.

Use of an Auditor

- A separate auditor can be drawn from within the organization or from outside to carry out additional independent auditing of the project.

 Risk Assessment and Contingency Plan

- At the final stage of the project, an overall risk assessment together with comprehensive contingency plans should be prepared to deal with risk areas and unexpected situations.

 Community Support

- Lastly, it is important to seek and maintain the support of the community for the project by promotional activities.