LegCo Paper No. FC 89/96-97
(These minutes have been
seen by the Administration)
Ref : CB1/F/1/2

Legislative Council Finance Committee

Minutes of the proceedings of the meeting held on Friday, 28 February 1997, at 2:30 pm in the Legislative Council Chamber

Members present :

    Dr Hon YEUNG Sum (Chairman)
    Hon CHAN Kam-lam (Deputy Chairman)
    Hon Allen LEE, CBE, JP
    Hon Mrs Selina CHOW, OBE, JP
    Hon Martin LEE, QC, JP
    Hon NGAI Shiu-kit, OBE, JP
    Hon Edward S T HO, OBE, JP
    Hon Ronald ARCULLI, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon CHEUNG Man-kwong
    Hon Michael HO Mun-ka
    Dr Hon HUANG Chen-ya, MBE
    Hon Emily LAU Wai-hing
    Hon LEE Wing-tat
    Hon Fred LI Wah-ming
    Hon Henry TANG Ying-yen, JP
    Hon James TO Kun-sun
    Dr Hon Philip WONG Yu-hong
    Hon Zachary WONG Wai-yin
    Hon Christine LOH Kung-wai
    Hon James TIEN Pei-chun, OBE, JP
    Hon CHAN Wing-chan
    Hon CHAN Yuen-han
    Hon CHENG Yiu-tong
    Dr Hon Anthony CHEUNG Bing-leung
    Hon David CHU Yu-lin
    Hon IP Kwok-him
    Hon LAU Chin-shek
    Hon Ambrose LAU Hon-chuen, JP
    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
    Hon Mrs Elizabeth WONG, CBE, ISO, JP
    Hon Lawrence YUM Sin-ling
Members absent :
    Dr Hon David K P LI, OBE, LLD (Cantab), JP
    Hon SZETO Wah
    Hon LAU Wong-fat, OBE, JP
    Hon Mrs Miriam LAU Kin-yee, OBE, JP
    Dr Hon LEONG Che-hung, OBE, JP
    Hon CHIM Pui-chung
    Hon Frederick FUNG Kin-kee
    Hon Eric LI Ka-cheung, OBE, JP
    Dr Hon Samuel WONG Ping-wai, OBE, FEng, JP
    Hon Howard YOUNG, JP
    Hon LEE Cheuk-yan
    Hon Andrew CHENG Kar-foo
    Hon Paul CHENG Ming-fun
    Hon CHEUNG Hon-chung
    Hon CHOY Kan-pui, JP
    Hon Albert HO Chun-yan
    Dr Hon LAW Cheung-kwok
    Hon MOK Ying-fan
Public officers attending :
    Mr K C KWONG, JP
    Secretary for the Treasury
    Mr Kevin HO, JP
    Deputy Secretary for the Treasury
    Miss Angela LUK
    Principal Assistant Secretary for the Civil Service
    Mrs Marie POON
    Assistant Director of Accounting Services
    Ms Elizabeth TSE
    Principal Assistant Secretary for Trade and Industry
    Mr David H Y TONG
    Assistant Commissioner of Customs and Excise
    Mr William O T CHOW
    Senior Superintendent of Customs and Excise Department
    Mr Alan DIXEY
    Chief Systems Manager of Information Technology Services Department
    Mrs Maria YICK
    Senior Systems Manager of Information Technology Services Department
    Mr Richard YUEN
    Deputy Secretary for Economic Services
    Mr Raymond TANG
    Assistant Director of Marine
    Mr Jeffrey TO
    Chief Safety Officer of Civil Aviation Department

Clerk in attendance :

    Mrs Vivian KAM
    Assistant Secretary General 1

Staff in attendance :

    Mrs Constance LI
    Chief Assistant Secretary (Finance Committee)
    Miss Anita SIT
    Senior Assistant Secretary (Finance Committee)

Item No. 1 - FCR(96-97)111


• Subhead 015 Public and judicial service pension benefits and compensation

Responding to a member’s question on the over-estimate of $559 million in the commuted pension gratuities and annual pensions referred to in paragraph 5 of the discussion paper, the Assistant Director of Accounting Services (AD/AS) advised that the original estimate was based on the past pattern of civil servants retiring within the normal retirement age bracket of 55 to 60. Although the number of retirees in 1996-97 was slightly more than the original estimate, the actual commuted pension gratuities paid, which were based on the actual length of service and final salaries of the retirees, were lower since the average payment to each retiree was lower than previously estimated.

2. Responding to a member’s question on the average length of service of retirees used in the estimates, AD/AS explained that no overall average length of service was calculated as the estimate was prepared by assuming a certain percentage of civil servants at each age group within the retirement age bracket, and the average length of service for each age group was different.

3. The Committee approved the proposal.

Item No. 2 - FCR(96-97)112



Customs and Excise Department

• New Subhead "Air Cargo Clearance System"

4. In reply to members, the Assistant Commissioner of Customs and Excise (AC/C&E) briefed members on the present operation of the air cargo clearance system at Kai Tak Airport. At present, Customs officers manually scrutinised cargo manifests supplied by carriers and verified the information from the department’s central Customs Control System (CCS) computer network. In selecting consignments for inspection, Customs officers input instructions to the computerised cargo inventory system of the Hong Kong Air Cargo Terminal Limited (HACTL) which was currently the sole operator at Kai Tak Airport. Although the present arrangements were operating smoothly, there were limitations as Customs had no control over the access and management of the HACTL system and the latter could not link with CCS due to security considerations. With the opening of the new airport at Chek Lap Kok, there would be six cargo operators operating in three terminals. It would then be impractical and undesirable to rely on the computer system of any single operator for consignment checks. Customs therefore proposed to develop a computerised air cargo clearance system of its own to meet operational requirements and to provide electronic link with CCS and individual air cargo operators for greater effectiveness. The cargo operators also welcomed the proposal as it would enable speedy selection of cargo for inspection at the new airport.

5. Some members were concerned that the proposed system would only become fully functional by October 1999 and enquired about the interim arrangements. In response, AC/C&E advised that given the size and complexity of the system, delivery of the various functions of the system would have to be phased over a period of two and a half years. As there would be six air cargo operators at the Chek Lap Kok airport, it would take time to conduct extensive testing with the cargo operators. In the meantime, Customs would continue with the existing manual functions in cargo selection and intelligence research activities.

6. While members were generally in support of the proposal, they expressed concern about the cost-effectiveness of the system in view of its high costs. In response, AC/C&E advised that, in addition to enhancing Customs data security and smuggling trend analysis, the proposed system would facilitate air cargo clearance at the new airport and improve Customs productivity. The estimated costs of the proposed system were considered reasonable having regard to the scope and complexity of the system. While only notional staff savings would result from dispensing with the manual cargo selection and intelligence research processes, Customs would review whether further system streamlining would be possible after the new system was put into operation. The Administration would report to members the savings and benefits that could be achieved when the project was fully implemented.Admin
7. With regard to the selection of the computer system, the Chief Systems Manager of Information Technology Services Department (CSM/ITSD) advised that ITSD had conducted a feasibility study and evaluated various technical options before recommending the system. In this connection, a member remarked that the Administration could also make reference to similar systems in overseas countries. Replying to a member, CSM/ITSD further advised that standard computer equipment would be procured under the Government Bulk Purchase Contract, and that the normal serviceable life span of computer hardware was about seven years. While the design system capacity was to cater for the projected workload by 2002-2003, system upgrading would be possible to meet future operational requirements. At the request of a member, the Administration undertook to provide further information on the design capacity.Admin

8. On the security aspects of the proposed system, the Senior Systems Manager of ITSD advised that there would be security measures to prevent unauthorized access to sensitive information of Customs and that of carriers. Back-up facilities and disaster recovery measures would also be put in place to ensure smooth operation of the system on a 24-hour basis in case of emergency.

9. Responding to a member’s question about the impact on fees and charges, AC/C&E advised that it was Government policy not to recover costs for law enforcement actions of this nature, and the carriers and operators would not be required to pay additional fees for this purpose. AC/C&E also confirmed that the recurrent costs covered staff training expenses.

10. A member expressed dissatisfaction that the Administration had failed to make provisions for the system within the Airport Core Programme (ACP) estimates. In response, the Principal Assistant Secretary for Trade and Industry clarified that the ACP estimates were first prepared in the early 1990s when the need for the Government to develop an independent system, rather than relying on the existing support from HACTL, was not readily identified. The ACP estimates were meant to cover only those works and projects essential to the construction or operation of the new airport. The Government had not included the proposed system within the scope of the ACP because the Kai Tak Airport was not equipped with such a system, and the decision to introduce competition to air cargo handling business at the new airport was made after the ACP estimates had been agreed. The Secretary for the Treasury also advised in response to a member that he was not aware of other similar major airport-related projects in the pipeline.

11. After discussion, the Chairman put the proposal to vote. The proposal was approved.

Item No. 3 - FCR(96-97)113


• Subhead 603 Plant, vehicles and equipment

12. While acknowledging the importance for maintaining a high safety standard for the operation of the new airport, some members expressed reservations on the need for the Marine Department to procure two patrol launches to control access to the restricted water areas around the new airport at Chek Lap Kok. A member considered that, with adequate signs and clear specification of the restricted areas, it was unlikely that vessels would enter the prohibited areas. Another member was of the view that the existing marine traffic control station at Ma Wan could extend its surveillance function to cover water areas around the Chek Lap Kok airport, and the Marine Police could also be called to assist in case of emergency. They doubted whether the two launches would be gainfully employed.

13. In response, the Deputy Secretary for Economic Services (DS/ES) and the Assistant Director of Marine (AD/M) clarified that it would be important to ensure that flight paths were clear of obstacles and that radio communications were free from interference. The Marine Department had pledged to arrive on the scene within 20 minutes to clear any vessels which had inadvertently entered the restricted areas. Since some small vessels were not equipped with radio communication device, they could not receive warning signals from the Ma Wan control station. In view of the wide coverage of the restricted water areas and the need for prompt action, it would be necessary to station two patrol launches in the area to ensure effective deterrence and efficient clearance actions where necessary. In response to a member, DS/ES further advised that the Administration would review the operational and manpower requirements, and consider the feasibility of expanding the scope of functions of the two patrol launches after these had operated for six months. He undertook to provide members with a report of the review findings.Admin

14. As regards whether priority should be accorded to local shipbuilders or whether fair competition should be the prime consideration in the tendering process, AD/M advised that procurement of the two launches would be by open tender, and the lowest bid would normally be selected subject to it being able to meet the necessary specifications.

15. The Committee approved the proposal.

16. The Committee was adjourned at 3:40 pm.

Legislative Council Secretariat
19 March 1997

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