FINANCE COMMITTEE

Record of Meeting held on 5 January 1996 at 2:30 p.m.
in the Legislative Council Chamber

Present:

Dr Hon YEUNG Sum (Chairman)
Hon Mrs Elizabeth WONG CHIEN Chi-lien, CBE, ISO, JP (Deputy Chairman)
Hon Allen LEE Peng-fei, CBE, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, OBE, JP
Hon Martin LEE Chu-ming, QC, JP
Hon SZETO Wah
Hon LAU Wong-fat, OBE, JP
Hon Edward HO Sing-tin, OBE, JP
Hon Ronald ARCULLI, OBE, JP
Hon Mrs Miriam LAU Kin-yee, OBE, JP
Dr Hon Edward LEONG Che-hung, OBE, JP
Hon Albert CHAN Wai-yip
Hon CHEUNG Man-kwong
Hon Frederick FUNG Kin-kee
Hon Michael HO Mun-ka
Dr Hon HUANG Chen-ya, MBE
Hon Emily LAU Wai-hing
Hon LEE Wing-tat
Hon Eric LI Ka-cheung, JP
Hon Fred LI Wah-ming
Hon James TO Kun-sun
Dr Hon Samuel WONG Ping-wai, MBE, FEng, JP
Hon Howard YOUNG, JP
Hon Zachary WONG Wai-yin
Hon Christine LOH Kung-wai
Hon James TIEN Pei-chun, OBE, JP
Hon LEE Cheuk-yan
Hon CHAN Kam-lam
Hon CHAN Wing-chan
Hon CHAN Yuen-han
Hon Andrew CHENG Kar-foo
Hon Paul CHENG Ming-fun
Hon CHENG Yiu-tong
Hon Anthony CHEUNG Bing-leung
Hon CHEUNG Hon-chung
Hon David CHU Yu-lin
Hon Albert HO Chun-yan
Hon IP Kwok-him
Hon LAU Chin-shek
Hon Ambrose LAU Hon-chuen, JP
Dr Hon LAW Cheung-kwok
Hon LAW Chi-kwong
Hon LEE Kai-ming
Hon LEUNG Yiu-chung
Hon Bruce LIU Sing-lee
Hon LO Suk-ching
Hon Margaret NG
Hon NGAN Kam-chuen
Hon SIN Chung-kai
Hon TSANG Kin-shing
Dr Hon John TSE Wing-ling

Absent:

Dr Hon David LI Kwok-po, OBE, LLD, JP
Hon NGAI Shiu-kit, OBE, JP
Hon CHIM Pui-chung
Hon Henry TANG Ying-yen, JP
Dr Hon Philip WONG Yu-hong
Hon CHOY Kan-pui, JP
Hon MOK Ying-fan
Hon Lawrence YUM Sin-ling

In Attendance for specific items:

In Attendance:

---

Item No. 1 - FCR(95-96)98

RECOMMENDATIONS OF THE PUBLIC WORKS SUBCOMMITTEE ON NON-AIRPORT CORE PROGRAMME

The Committee approved this item.

Item No. 2 - FCR(95-96)99

CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Transport Department
New Subhead “Replacement of mobile radio communication system in the Lion Rock Tunnel”

2. Members noted that this proposal was submitted to the Committee for consideration on 17 November 1995 (vide FCR(95-96)72) but was withdrawn pending clarification on the charges imposed by the Electrical and Mechanical Services Department (EMSD). Members also noted that when the subject was studied by the Panel on Planning, Lands and Works on 19 November 1995, the Administration pointed out that the EMSD charges had in fact been erroneously included in this proposal as well as the proposal in relation to the procurement of electronic parking devices (to be dealt with under Item No. 3). The estimated project cost shown in the two papers had been revised to rectify this error.

3. In response to Members’ query on the Administration’s failure to detect the error during the internal processing of the proposal, the Deputy Secretary for the Treasury explained the circumstances leading to the error and apologised for the confusion it had caused. She explained that currently some services of EMSD were already subject to inter-departmental charging and the intention was to extend charging to all other services when EMSD moved to trading fund operation. The EMSD charges included in the two previous papers covered services which at present were not subject to charging. They were charges which the department would impose if trading fund arrangements were in place. As the proposed trading fund had yet to be set up, the charges should not have been included in the request for funds in the first instance. Unfortunately there was misunderstanding amongst the parties concerned, namely EMSD, Transport Department and Finance Branch, during communication over the preparation of the Finance Committee paper. The Secretary for the Treasury (S for Tsy) apologised to Members for having caused the confusion.

4. The Committee approved this proposal.

Item No. 3 - FCR(95-96)100

CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Transport Department
New Subhead “Procurement of electronic parking devices”

5. Members noted that the project cost of this item (submitted to the Committee on 17 November 1995 in FCR(95-96)73 and withdrawn) had been revised to rectify the error similar to that in the proposal discussed under Item No. 2.

6. As regards the difference between the proposed chip cards and other smart cards being developed in the market, the Assistant Commissioner for Transport explained that whilst both types of cards served similar functions, the new smart cards were still in the design stage. The proposed chip cards had better security features and could not be easily tempered with. They were therefore more suitable for outdoor use, particularly in the case of electronic parking meters.

7. The Committee approved the item.

Item No. 4 - FCR(95-96)101

HEAD 98 - MANAGEMENT SERVICES AGENCY
Subhead 700 General other non-recurrent

8. In response to Members’ questions on how far the Records Management Strategy had improved the efficiency in the tracking of records, hence facilitating public access to government information, the Deputy Director of Administration said that the objective of Phase I was to lay the foundation for the implementation of the Strategy. The Bar-coding Filing Management System to be implemented in 1,200 registries in Phase I could speed up the tracing and retrieval of government records. The Principal Management Services Officer (PMSO) added that so far the bar-coding of records had been completed in 800 registries. A survey had been carried out on a number of registries and the results indicated that tracking and retrieval of records had greatly improved. Phase I of the Strategy would be completed by mid 1996 and an overall review of the effectiveness of the system would be conducted. In the reduction of records stock and growth, PMSO said that proper guidelines had been laid down to minimise the unnecessary creation and duplication of records, to dispose of records with no retention values; and to use different media for records storage. These measures would also help to achieve manpower and space savings.

9. A Member questioned whether microfilming should still be used as it was becoming an obsolete technology. PMSO explained that both microfilming and electronic filing systems served different purposes and both could effectively be used to improve records retrieval and reduce demand for storage space. The continued use of microfilming was necessary for some documents as it would be difficult to present them electronically in court.

10. Regarding the criteria used to select departments for carrying out records management studies, the Assistant Director of Management Services (ADMS) said that those departments which were keen in modernising their records management systems and/or would soon be moving their offices were given priority. Although the degree of interface with the public was also a factor to be considered, emphasis would be given to the functional needs and the actual circumstances of the departments. ADMS added that in selecting the departments, the Administration had taken into account the views of the members of the LegCo Panel on Information Policy and would continue to do so.

11. The Committee approved the item.

Item No. 5 - FCR(95-96)102

HEAD 166 - GOVERNMENT FLYING SERVICE
Subhead 603 Plant, vehicles and equipment

12. In response to a Member’s questions on the training cost, the Controller, Government Flying Service (C/GFS) said that the provision of $4,660,000 mainly covered tailor-made training for pilots and maintenance staff as well as simulation training provided by the manufacturer. The acquisition of both the aircraft and the associated training services would be done through an open tender exercise according to standard government procedures to ensure best value for money.

13. In reply to Member’s questions, C/GFS confirmed that the new Forward Looking Infra-Red (FLIR) system could help the Police in carrying out anti-smuggling surveillance work, and the enhancement of the system would improve the conduct of rescue work. The Principal Assistant Secretary for Security added that the Police Force was a major user of the aircraft managed by the Government Flying Service (GFS) and their needs would no doubt be taken into consideration when planning any improvement to the systems.

14. Responding to a Member, C/GFS said that although the proposed new aircraft would not be delivered until 1998, the GFS would continue to maintain, and ensure the air-worthiness of, the existing aircraft. As regards the possibility of installing the new FLIR system in the existing aircraft, C/GFS commented that it would involve substantial modifications and would be too costly and uneconomical to do so.

15. Several Members noted the corrosive effects of gases from the Kai Tak Nullah on the aircraft and expressed serious concern about the effects on the staff. The Chairman suggested that the issue be further pursued by the Panel on Environmental Affairs.

16. The Committee approved the proposal.

Item No. 6 - FCR(95-96)103

HEAD 28 - CIVIL AVIATION DEPARTMENT
Subhead 700 General other non-recurrent

17. At the invitation of the Chairman, the Deputy Director of Civil Aviation (DD/CAD) briefed the Committee on the objectives and details of the proposed arrangements for staff in the Airport Management Division (AMD) upon the closure of the Kai Tak Airport. He also requested Members to note that the fifth sentence in paragraph 8 of the paper should be amended to read as “For the staff who have opted to join the Airport Authority (AA), they will cease to be civil servants upon the closure of the Kai Tak Airport”.

18. Members noted that although the Kai Tak Airport would be closed, all AMD staff would be given an offer of employment by the AA with a remuneration package which would, in overall terms, be broadly comparable to their existing civil service terms. They considered that these staff, with one year to exercise their option, in fact did not suffer any loss of job as a result of the closure of Kai Tak. Some Members therefore queried the need for granting the ex-gratia awards which would inevitably pose financial burden on public purse.

19. In response, the Principal Assistant Secretary for the Civil Service (PAS/CS) explained that it was normal practice to grant the ex-gratia awards to staff who were compulsorily retired upon the disestablishment of offices. He quoted the examples of the Government tunnels and Music Office, the staff of which were also given the same abolition-of-office terms. The Deputy Secretary for Economic Services added that important objectives of the integration arrangement were for the AA to have a core of local experienced staff for the new airport and to ensure the continued efficient operation of Kai Tak until its closure. The ex-gratia payment was standard for retirement on abolition of office terms. If only those staff who decided not to take up AA’s offer within the 12-month option period were given the abolition-of-office terms, it would be a disincentive for staff to join the AA early. This would make it difficult for the AA to plan its recruitment and deployment of staff. On Members’ questions regarding loss to staff, she explained that as the AA would be operating on prudent commercial principles, the change in organisational culture and management philosophy would create uncertainty for the staff. She also stressed that those who joined the AA would only get their pensions when their posts were abolished upon closure of Kai Tak.

20. A Member protested against the adoption of different treatments for staff in different disestablishment exercises. She quoted that the Civil Service Branch did not agree to offer to the ex-Hospital Services Department staff the same terms which they now offered to the AMD staff. She failed to see why the Government was prepared to accept that a mixed staffing situation within the AA organisational structure would not be conducive to the establishment of a strong management team for Chek Lap Kok (CLK), while it required the Hospital Authority to accept the mixed staffing situation. The Administration explained that the mixed staffing option had been carefully considered by the AA management and the Administration but rejected. A situation in which staff of the AA were employed on different terms and conditions, while undertaking similar duties, would be divisive and not conducive to the early establishment of a strong, fully integrated airport management team. On a practical level, the indefinite retention of a core of staff on civil service terms would create administrative and management complexities. It would also cut across the AA’s policies on pay and benefits which, in line with its overall mandate to operate on prudent commercial terms, aim at flexibility, responsiveness to market conditions and pay for performance.

21. Some Members also pointed out that the AMD situation was not identical to that of the Music Office, where further employment by the Municipal Councils was not guaranteed. In response to a Member’s query, the S for Tsy pointed out that the relevant posts in CAD would cease to be required on the closure of Kai Tak Airport and would have to be abolished. In this respect, it was no different from the Music Office exercise. This was therefore an abolition-of-office exercise in which the standard terms should apply. However, separate staffing arrangements involving the offer of employment by the AA were made in this exercise to ensure a smooth transition from Kai Tak and CLK and the continued efficient operation of Kai Tak up till its closure. These arrangements were proposed with the understanding of the AA management. Members considered that there were double standards in implementing the abolition-of-office policy, and the existing practice might no longer be applicable to today’s situation. Members were disappointed that the Administration continued to ignore the need for a more comprehensive review of the abolition-of-office policy and the terms. They requested that the matter be referred to the LegCo Panel on Public Service for examination of the policy before considering this proposal for approval.

22. In response, PAS/CS assured Members that they would undertake a review on the policy on the granting of abolition-of-office terms, and requested that this proposal be approved in view of the urgent need to finalise the staffing arrangements for the early establishment of the airport management team in the AA. Should there be any changes to the abolition-of-office terms arising from the review, the new terms should apply to future disestablishment exercises.

23. Members were not convinced that the present proposal was the only alternative to deal with the staffing situation in AMD. They considered that other options, such as secondment of AMD staff to the AA, should be explored before deciding whether the AMD should be disestablished.

24. In response to Members’ request, the Chairman asked the Administration if the proposal would be withdrawn until the matter could be further studied by the Panel on Public Service. S for Tsy replied that the item should be put to the vote.

25. Members voted on the proposal. The item was negatived: 14 Members voted for the proposal; 28 against and 1 abstained.

Ayes:

(14 Members)

Nos:

(28 Members)

Abstention:

(1 Member)

26. The Committee was adjourned at 5:00 p.m.

Legislative Council Secretariat
29 January 1996

---