PLC Paper No. FC 65
(These minutes have been
seen by the Administration)

Ref : CB1/F/1/2

Finance Committee of the Provisional Legislative Council

Minutes of the meeting
held at the Legislative Council Chamber
on Friday, 7 November 1997, at 2:30 pm

Members present:

Hon Ronald ARCULLI, JP (Chairman)
Hon Henry WU (Deputy Chairman)
Hon WONG Siu-yee
Hon James TIEN Pei-chun, JP
Hon David CHU Yu-lin
Hon HO Sai-chu, JP
Hon Edward HO Sing-tin, JP
Dr Hon Raymond HO Chung-tai, JP
Hon NG Leung-sing
Hon LEE Kai-ming
Hon Mrs Elsie TU, GBM
Hon Mrs Selina CHOW, JP
Hon Mrs Peggy LAM, JP
Hon NGAI Shiu-kit, JP
Hon Henry TANG Ying-yen, JP
Hon MA Fung-kwok
Dr Hon Mrs TSO WONG Man-yin
Hon LEUNG Chun-ying, JP
Dr Hon LEONG Che-hung, JP
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon CHAN Choi-hi
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon CHENG Kai-nam
Hon Andrew WONG Wang-fat, JP
Dr Hon Philip WONG Yu-hong
Hon Kennedy WONG Ying-ho
Hon Howard YOUNG, JP
Dr Hon Charles YEUNG Chun-kam
Hon YEUNG Yiu-chung
Hon IP Kwok-him
Hon LAU Kong-wah
Hon LAU Wong-fat, JP
Hon Mrs Miriam LAU Kin-yee, JP
Hon Ambrose LAU Hon-chuen, JP
Hon CHOY Kan-pui, JP
Hon Paul CHENG Ming-fun, JP
Hon CHENG Yiu-tong
Dr Hon TANG Siu-tong, JP
Hon Timothy FOK Tsun-ting
Hon KAN Fook-yee
Hon NGAN Kam-chuen
Hon LO Suk-ching
Dr Hon LAW Cheung-kwok
Hon TAM Yiu-chung, JP
Hon CHOY So-yuk

Members absent :

Prof Hon NG Ching-fai
Hon Eric LI Ka-cheung, JP
Dr Hon David LI Kwok-po, JP
Hon Allen LEE, JP
Hon CHEUNG Hon-chung
Hon MOK Ying-fan
Hon HUI Yin-fat, JP
Hon CHAN Yuen-han
Hon TSANG Yok-sing
Hon Frederick FUNG Kin-kee
Hon CHIM Pui-chung
Hon Bruce LIU Sing-lee

Public officers attending :

Mrs Carrie LAM, JP
Deputy Secretary for the Treasury

Principal Executive Officer (General), Finance Bureau

Principal Assistant Secretary for Works

Mr Tony TOY
Assistant Director of Architectural Services

Mr Philip CHAN
Principal Assistant Secretary for Security

Assistant Commissioner of Police

Mr NG Chee-kin
Chief Superintendent of Hong Kong Police Force

Mr Raphael CHIU
Chief Telecommunications Engineer of Hong Kong Police Force

Mr AU Wai-lam
Superintendent of Hong Kong Police Force

Ms Bernadette LINN
Principal Assistant Secretary for the Civil Service

Mrs Lena CHAN
Secretary, Public Service Commission

Principal Assistant Secretary for Economic Services

Assistant Director of Agriculture and Fisheries

Clerk in attendance :

Ms Pauline NG
Assistant Secretary General 1

Staff in attendance :

Mrs Vivian KAM
Chief Assistant Secretary (1)5

Mr Matthew LOO
Senior Assistant Secretary (1)7

Item No. 1 - FCR(97-98)49

Architectural Services Department
" New Subhead " Expansion of computer-aided drafting system "

The Committee approved the proposal.

Item No. 2 - FCR(97-98)50

Hong Kong Police Force
New Subhead " New Radio System for Marine Region "

2.Members were concerned with radio frequency interference to the existing radio system of the Marine Police, and sought elaboration on the seriousness of the problem and on whether the proposed system would be insulated from interferences. In reply, the Assistant Commissioner of Police (AC/P) advised that the problem was mainly with interference from the Mainland as a result of shortage of frequencies. The Force would liaise with its counterpart in the Mainland on the allocation of frequencies. He assured members that a new digitised technology, which was on the leading edge of the discipline would be used on the new system and interference would be reduced as a result. The system would provide a highly acceptable level of communication for the next decade or so, and could be extended to all new Marine Police launches.

3.AC/P confirmed that notwithstanding the decommissioning of one of the two existing networks in April 1996, the remaining network was perfectly serviceable and would serve Marine Police to an acceptable standard until the network rolled out.

4.The Committee approved the proposal.

Item No. 3 - FCR(97-98)51

" Subhead 110 Honoraria for members of committees

5.The Principal Assistant Secretary for the Civil Service advised in reply to a member that the proposal for adjusting the rate of honorarium for members of the Public Service Commission from once every two years to annually was made to bring the practice in line with that of other boards and committees receiving honoraria. As regards the workload of Commission members, the Secretary, Public Service Commission, advised that an annual average of 2 250 cases were scrutinised during the past three years and estimated that a member would need to spend between 10 to 30 minutes on each case depending on the complexity involved. She added that individual cases were considered by members mainly through circulation and that meetings were only called to deliberate on issues involving new policies and principles.

6.Some members pointed out that different policies were adopted in the granting of honoraria to unofficial members of advisory committees. While members of some committees did not receive any honoraria at all, the rates of honorarium for different boards and committees were different and did not necessarily correspond with the workload generated. In response, the Deputy Secretary for the Treasury (DS/Tsy) said that some broad principles had been approved in this respect by the Finance Committee in 1993. In essence, services on boards and committees should normally be regarded as voluntary service. Remuneration would only be considered to cover necessary expenses such as travelling and related incidental expenses, or where the time involved in the work of the committees was substantial. The maximum rate of remuneration was set at $570 per member per attendance in 1993. It was for the respective policy bureaux to consider whether remuneration should be granted according to the circumstances of individual boards and committees. She undertook to circulate the relevant paper for members' information.Admin

7.The Committee approved the proposal.

Item No. 4 - FCR(97-98)52

Subhead 101 Fisheries loans

8.Before the Committee considered the proposal, DS/Tsy advised that apart from the proposal for increasing the commitment of the loan capital of the Fisheries Development Loan Fund from $7 million to $100 million, the Committee's approval was also being sought on the parameters for the grant of loans as set out in the Enclosure to FCR(97-98)52. The Chairman also drew members' attention to the revised version of FCR(97-98)52 tabled at the meeting.

9.Members were supportive of the provision of financial assistance to help the fishing industry. However, they raised questions on the reasons for the proposed increase in the loan capital which was about 14 times over that in 1984. In response, the Assistant Director of Agriculture and Fisheries (AD/A&F) provided the following information -

  1. The amount of the loan capital proposed was to correspond with the needs of the fishing industry. In the 1980's, traditional fishing vessels were used and loans applied for were relatively small. As a result of a decline in fishery resources in traditional fishing grounds in recent years, fishermen had to operate in deeper waters and thus there was a growing demand for modern steel-hulled fishing vessels. To facilitate the fishermen in acquiring such vessels, which cost about $5 million each, funds in the Loan Fund would have to be increased to cater for the increasing applications.

  2. The Fisheries Development Loan Fund Advisory Committee estimated that there would be 25 applications in the next three years, to be followed by about five applications a year thereafter. On that basis and depending on developments in the industry, the loan capital should be sufficient for the next ten years.

  3. Each successful applicant would be required to contribute no less than 10% of the total cost of the vessel. The enhanced loan capital should be sufficient to cope with the expected number of applications as the normal loan application was for a sum of about $3 million.

10.As to whether the applicants' contribution should be increased to provide better security to the loan and prevent bad debt, AD/A&F explained that the amount of contributions from applicants and the loans approved would have regard to many considerations including the applicants' repayment ability and security. On the subject of bad debts, AD/A&F said that of the 98 applications approved so far since the establishment of the Fund in 1960, there were 11 write-off cases. In order to ensure repayment of loan and minimise chances of bad debt, a number of new arrangements with regard to the various aspects of qualifications of applicants, repayment and security, had been included in the revised terms and conditions of the loan. These new arrangements should be sufficient to tackle the problem.

11.Members expressed concern on whether the loan would actually go to fishermen in the industry or if loans would be provided also to fishing companies including those from overseas. The Principal Assistant Secretary for Economic Services (PAS/ES) assured members that the Administration was committed to supporting the local fishing industry and one of such means was through the provision of loans for major capital investments by the industry locally. All applications were studied carefully by the Advisory Committee and these would have to satisfy the parameters laid down before approval could be given. AD/A&F supplemented that the fishing industry was by tradition mainly inherited and there should not be many new entrants to the industry. If fishing companies registered overseas were to apply for the loan, the requirement for at least one shareholder of the company to be a local resident would have to be satisfied. He advised nevertheless that no loan had so far been approved for fishing companies.

12.On a member's concern on the transparency of the terms of the loan and an appeal mechanism for persons whose applications were rejected, AD/A&F confirmed that fishermen were well aware of the terms of the loan and that applicants who were dissatisfied with the outcome of their applications could meet with the Advisory Committee to explain the positions of both sides fully.

13.In response to a member on the availability of labour to tie in with the provision of financial assistance, PAS/ES informed members of a Mainland Fisherman Deckhands Scheme which allowed up to 3 500 Mainland deckhands to be employed on local fishing vessels; a review of the Scheme was being undertaken.

14.The Committee approved the proposal, including the revised parameters for the grant of loans as set out in the Enclosure to FCR(97-98)52.

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

Provisional Legislative Council Secretariat
25 November 1997