PLC Paper No. CB(1) 905
(These minutes have been
seen by the Administration)

Ref : CB1/PL/TP/1

Panel on Transport

Minutes of meeting held on Friday, 12 December 1997, at 8:30 am in Conference Room A of the Legislative Council Building

Members present :

Hon Mrs Miriam LAU Kin-yee, JP (Chairman)
Hon Edward HO Sing-tin, JP
Hon LEE Kai-ming
Hon Mrs Selina CHOW, JP
Hon Henry WU
Hon CHAN Choi-hi
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon Andrew WONG Wang-fat, JP
Hon LAU Kong-wah
Hon CHOY Kan-pui, JP
Hon NGAN Kam-chuen
Dr Hon LAW Cheung-kwok

Members absent :

Hon CHEUNG Hon-chung (Deputy Chairman)
Hon WONG Siu-yee
Dr Hon Raymond HO Chung-tai, JP
Hon CHENG Kai-nam
Dr Hon TANG Siu-tong, JP

Public officers attending :

Mr Nicholas NG, JP
Secretary for Transport

Mrs Fanny LAW, JP
Commissioner for Transport

Mr Isaac Y N CHOW, JP
Deputy Secretary for Transport

Item IV

Miss Maureen WONG
Principal Assistant Secretary for Transport

Mr Peter LUK
Acting Assistant Commissioner for Transport/Management and Licensing

Items V and VII

Mr Davey CHUNG
Principal Assistant Secretary for Transport

Items V and VI

Mrs Judy LI
Assistant Commissioner for Transport/Ferry & Paratransit

Item VI

Mr Brian LO
Principal Assistant Secretary for Transport

Attendance by invitation :

Item VII

Creative Star Ltd.


Clerk in attendance :

Ms Estella CHAN
Chief Assistant Secretary (1)4

Staff in attendance :

Mr Andy LAU
Senior Assistant Secretary (1)6

I Confirmation of minutes of meeting
(PLC Papers No. CB(1)546 and 624 - Minutes of the meetings on 17 and 22 October 1997)

The minutes of the meetings held on 17 and 22 October 1997 were confirmed.

II Information papers issued since last meeting

2. Members noted that the Mass Transit Railway Corporation had issued the Airport Railway Project Progress Report (Quarter ended 30 September 1997) to all Members of the Council.

III Items for discussion at the next meeting scheduled for 9 January 1998
(PLC Paper No. CB(1)626 - List of outstanding items for discussion)

3. Members agreed to discuss the following subjects at the next meeting to be held on 9 January 1998:

  1. Review of drink driving legislation;

  2. Permitted areas for New Territories taxis;

  3. Hong Kong Tramways' fare increase application; and

  4. Ma On Shan Rail and extension of East Rail to Tsim Sha Tsui.

4. Members noted that subject to the confirmation of the Administration, an additional item on urban taxi fare increase application might be put on the agenda for the next meeting. In view of the heavy agenda and in order to allow sufficient time for members' deliberation, the Panel agreed to extend the scheduled duration of the meeting.

(Post meeting note : At the request of the Administration and with the concurrence of the Chairman, the item on urban taxi fare increase application had been put on the agenda for the meeting to be held on 9 January 1998. In view of the numerous items on the agenda, the scheduled duration of the meeting had been extended to last from 8:30 am to 11:40 am.

5. Members agreed that the Ombudsman's recent report on the existing taxi licensing system be put on the list of outstanding item for discussion and a copy of the report be sought for reference.

(Post meeting note : While the full report was not yet available, the Executive Summary had been circulated vide PLC Paper No. CB(1) 681 dated 17 December 1997.)

IV Proposed Revision of Miscellaneous Fees & Charges under Road Traffic Ordinance (Subsidiary legislation), Fixed Penalty (Traffic Contravention) Ordinance and Fixed Penalty (Criminal Proceedings) Ordinance
(PLC Paper No. CB(1)625(01) - Information paper provided by the Administration)

6. At the invitation of the Chairman, the Principal Assistant Secretary for Transport (PAS for T) briefed members on the salient points of the information paper.

7. Referring to the higher rate of increase for fees on "any duplicate passenger service licence certificate" issued under the Road Traffic (Public Services Vehicles) Regulations (Cap. 374), PAS for T advised that a costing exercise on this item had showed that for full cost recovery, the fee level should be $126. In order to mitigate the impact of a full cost increase, the increase was being introduced in phases. It was envisaged that after next year's adjustment, the target of full cost recovery would be achieved.

8. In response to a member's question on how often a costing exercise would be conducted for individual items, the Secretary for Transport (S for T) said that the timing depend on whether there were any new inclusion of expenditure items. In the interim period before the next costing exercise, the fee levels would be updated annually according to the Government Consumption Expenditure Deflator so as to minimize the magnitude of increase at one go upon the completion of a costing exercise.

9. Some members expressed grave concern about the sharp increase in fees on impounding, removing and storage of vehicles parked illegally on private roads. A member pointed out that since the concerned fees would be charged serially, the combined increase in impounding, removing and storage fees from $390 to $990 was significantly higher than the fixed penalty of $320 for illegal parking on public roads. Furthermore, in view of the variation in costing amongst different management companies, the member queried the argument of setting the fees at the proposed levels in order to achieve full cost recovery for these companies.

10. S for T replied that under the existing provision, management companies of private roads were not empowered to issue fixed penalty tickets. Considering that existing fees for illegal parking on private roads had not been revised since July 1989 and taking into account the cumulative inflation over the years, the proposed fee increases were considered appropriate. Furthermore, illegal parking was serious in many private housing estates, particularly, those located near the race courses, as some vehicle drivers might consider the relevant fees for parking illegally on private roads cheaper than a $320 fixed penalty ticket. This in fact encouraged illegal parking on private roads and generated inconvenience to residents in the area. As such, the fees were proposed to meet the increase in costs of management companies and to combat illegal parking.

11. As regards the basis of the proposed fees, PAS for T advised that the fees were worked out on a cost recovery basis according to the Transport Department's assessment of detailed costings submitted by the Hong Kong Association of Property Management Companies. Regarding the reliability of information provided by the Hong Kong Association of Property Management Companies, S for T said that whilst the Government could collect data directly from individual management companies, it was considered not cost effective to do so. Given that the level of fees was comparable with that of fixed penalty tickets and taking into account the problems encountered by management companies in dealing with illegal parking on private roads, the Administration considered the proposed increase acceptable. Furthermore, the Government also imposed comparable charges on motorists for removal and storage of vehicles parked illegally on public roads and Government car parks.

12. In response to the Chairman's question, the Assistant Commissioner for Transport/Management and Licensing (Acting) (AC/ML (Acting)) said that the owner of a private road was empowered to charge the fees specified in the Schedule to the Road Traffic (Parking on Private Roads) Regulations (Cap. 374). Under normal circumstances, management companies would take up the necessary enforcement work themselves.

13. A member said that some management companies were charging fees higher than those set out in the Schedule and enquired about the remedy to such malpractice. AC/ML (Acting) responded that the vehicle owners were not obliged to pay any amount above the scheduled fee. The Administration would remind the Hong Kong Association of Property Management Companies to adhere to the fees set out in the schedule. PAS for T undertook to provide further information on penalty for such malpractice after the meeting.Admin

(Post meeting note : The requisite information was circulated to members vide PLC Paper No. CB(1) 749)

14. Responding to a member's further query on whether guidelines had been drawn up on the circumstances under which an illegally parked vehicle could be removed or impounded by a management company, (for example, having been illegally parked for x hours), and whether the public would be informed of the details, PAS for T said that there was no such detailed guideline. In general, if the vehicle caused obstruction to other road users, it would be removed at the discretion of the management company. On the disclosure of information on fees, AC/ML (Acting) said that relevant notices should be posted by the management companies to inform the public accordingly.

15. A member opined that the daily charge of $320 for the storage of vehicles parked illegally on private roads might not be sufficient to deter prolonged parking, particularly when it was cheaper than a day's parking fee in a carpark. PAS for T responded that in accordance with the legal advice of the Government Counsel, the fees concerned should not include any elements of penalty as this would be a matter for the court to decide. Against this background, the proposed fees were simply worked out on the basis of cost recovery.

16. Members enquired whether the proposed fees for illegal parking on private roads were comparable with those charges imposed by the Government on public roads. The Administration replied that they were basically in line with each other. At the request of members, the Administration undertook to provide further information on fees on impounding, removing and storage of vehicles illegally parked on public roads. Admin

(Post meeting note : The requisite information was circulated to members vide PLC Paper No. CB(1) 749)

17. After discussion, a member maintained the view that the proposed fees for illegal parking on private roads were too high. The Chairman advised that the legislative proposal would be subject to the negative vetting procedures and members could decide at a later stage as to whether a subcommittee should be formed to study the proposal in detail. In this regard, members noted that the proposal would be submitted to the Council in January 1998.

V Lantau Taxi Fare Increase
(PLC Paper No. CB(1)625(02) - Information paper provided by the Administration)

18. At the invitation of the Chairman, the Assistant Commissioner for Transport/Ferry and Paratransit (AC/FP) briefed members that the Transport Advisory Committee had recommended an average increase of 9.1% in fares for Lantau taxis with effect from March 1998. In considering the fare increase application, the Administration had taken into account a number of factors including the operating cost and revenue of taxi operation, public acceptability, and the need to maintain a reasonable differential between taxi fares and those of other public transport modes.

19. AC/FP explained the changes in the operating environment since the last fare increase which had resulted in a decrease in net income for Lantau taxis and hence, the need for the fare increase proposal. She said that the opening of the Lantau Link and the associated introduction of new bus services had affected the number of Lantau taxi passengers and hence, revenue. Likewise, the reduction in the number of tourists visiting Lantau Island due to adverse weather and the additional taxi licences issued in mid 1997 also affected the revenue for Lantau taxis. She said that the proposed fare increase would improve the financial position of Lantau taxi operators to a level comparable to their previous income in real terms. Presently, most of the passengers were tourists and the daily patronage was around 2,500 on a public holiday and 900 on a weekday.

20. In response to a member's question on the future demand for Lantau taxis, AC/FP said that with the opening of the new airport at Chek Lap Kok and further development in the Tung Chung new town, the demand for taxi service would gradually increase. It was anticipated that taxi drivers would benefit from such improvements. The increase in demand would also enable taxis owners to rent out their taxis for two shifts, hence improving the rental income.

VI Rationalization of HYF's Inner-harbour Routes
(PLC Paper No. CB(1)625(03) - Information paper provided by the Administration)

21. Responding to a member's question on whether suitable replacement public piers/landing steps would be provided upon the demolition of the existing ones in Jordan Road and Kowloon City, the Commissioner for Transport (C for T) said that the Administration would normally undertake to provide suitable replacements for all indispensable items. However, she would provide further information after the meeting. Admin

22. A member pointed out that when Hongkong and Yaumati Ferry Company Limited (HYF)'s pier development package was proposed, consideration was given to the principle that HYF's franchised operations would be cross-subsidized by profits generated from the property development on the piers. As such, the deferral of HYF's pier development package would have an implication on its service improvement plan. He also enquired whether the proposed cancellation of loss-making routes entailed a change to the above principle.

23. The Deputy Secretary for Transport (DS for T) responded that the Administration had all along supported rationalization of ferry routes, and that non-essential ferry routes, which were making heavy losses, should be excised from existing franchised networks. As such, the proposed cancellation was in line with Government's policy and did not conflict with the agreed principle of HYF's pier development package.

24. As to the reasons for the deferral, DS for T advised that the Administration was negotiating with HYF about the land premium to be paid to the Government; the terms of the new franchise and the tripartite agreement on the detailed terms of the pier development package. Whilst there had been progress on the related work and draft legal documents were being circulated amongst parties concerned, it took a long time for the Government to reach an agreement with HYF over the land premium for the project. It was however envisaged that the pier development package would be finalised prior to the expiry of HYF's franchise.

25. On whether any staff would be affected by the proposed cancellation of ferry services, AC/FP advised that of the 120 staff concerned, some of them would retire naturally and the rest would be redeployed to other vacant posts within the company.

26. A member opined that unlike franchised bus and railway operators, ferry operators did not receive the same degree of support from the Government. In order to sustain ferry operations and to make ferry services more competitive, he said that the Government should take the lead to explore means to improve the viability of ferry services. In this regard, he suggested that the Government should consider integrating residential and commercial land use with pier development, and allow franchised operators to cross subsidize their ferry operations by means of property development on the piers.

27. In reply, S for T said that the Government's waterborne transport policy was to maintain the essential link to serve the transport needs of commuters. For non-essential and supplementary services, the Administration considered it more appropriate to let market forces determine the future of such routes, so as to maintain a favourable operating environment conducive to competition. He further said that the Administration had accepted in principle the pier development package proposed by HYF in consideration that such a proposal was not inconsistent with the Government policy and that it would help maintain necessary ferry services to out-lying islands. Regarding the assistance rendered by the Government to HYF, C for T said that the Government had made an effort to relieve the financial burden of HYF by taking over the responsibility for the maintenance of the structure of piers from 1997 onwards.

28. A member expressed concern about the proposed cancellation of loss-making routes, which might lead to illegal ferry operation to meet the demand. DS for T clarified that it was not the Government's intention to cancel all loss-making routes. The proposed cancellation was made having regard to the declining patronage and the availability of convenient land transport alternatives. Apart from considering the actual needs of the travelling public, the Administration would also examine carefully whether it was commercially viable to tender out some of the routes as licensed services and let market forces determine the future of such routes. In the present case, the Administration proposed to tender out the Central-Tsuen Wan via Tsing Yi ferry service.

29. In response to a member, AC/FP said that movement of dangerous goods by ferries was currently provided for under a separate licence and would not be affected by the proposed cancellation of ferry services.

30. To promote greater use of ferry services, a member urged the Administration to review the current speed limit for vessels in the harbour. He said that because of the statutory requirement, ferry companies could not deploy faster vessels to speed up the operation. The Chairman also said that the speed limit would be an important factor in determining the attractiveness of ferry services, hence impacting the policy on waterborne transport. She therefore requested the Administration to address the issue in preparing the paper on waterborne transport policy for the Panel.

31. In reply, C for T said that there had been concerns about excessive waves generated by high speed vessels in the inner harbour. In order to minimize the wave problem, the Marine Department was considering whether it was necessary to extend the speed restriction zone within the inner harbour. The Civil Engineering Department was reviewing the design of the seawall to minimize the effect of wave generation. Given the time required for the study, it would not be possible to wait until the completion of the study before deciding on the future development of waterborne transport. Indeed, the call for speed control was simply confined to the inner harbour and ferry companies could still engage high speed vessels to operate at high speed only in the outer harbour and shorten the overall journey time.

32. After discussion, the Chairman suggested that the Panel follow up the subject once a paper on the overall policy on waterborne transport was available from the Administration.

Illegal ferry operation by Polly Ferry Company Ltd.

33. In response to a member's request, the Panel agreed to discuss the illegal ferry operation by Polly Ferry Company Ltd. between Yung Shue Wan and Pak Kok Tsuen on Lamma Island and Central.

34. Members expressed grave concern about the illegal operation of ferry service, which had not only infringed upon the rights of the franchised operator but also reflected a loophole in the monitoring and control of ferry service. They enquired about the actions taken by the Administration to rectify the problem, including the alleged overloading and speeding of vessels which would affect passenger safety.

35. In response, C for T explained that a licence had been granted to Polly Ferry Company Ltd. to operate a ferry service between Pak Kok Tsuen and Central but it was noticed that there had been an illegal service operating between Central, Pak Kok Tsuen and Yung Shue Wan. The Administration had already issued warning letters to the concerned company, asking them to stop the illegal service and to adhere strictly to the Schedule of Service. Meanwhile, the Marine Department was taking appropriate enforcement actions against overloading of vessels. According to the Marine Department, the problem was no longer observed in recent inspections.

36. Responding to members' further query on whether the illegal service between Yung Shue Wan and Pak Kok Tsuen had ceased completely, C for T said that a free shuttle service was being operated by the company between these two points. Since the vessel concerned had a proper licence issued by the Marine Department for sailing in Hong Kong waters, such an operation was not construed as a breach of the related Ordinance if the statutory safety requirements were met.

37. Noting the Administration's reply, members expressed grave concern about the loophole in the existing legislation and asked if passengers were fully covered by insurance. They also enquired about whether the operator was in breach of the Schedule of Service as stipulated in the licence, and the circumstances under which the licence could be revoked. C for T said that under existing provisions, the Administration could take actions against the operation of an illegal ferry service, but in order to do so, it was necessary to ascertain that payment was involved in using the service. On the other hand, the Marine Department could also take enforcement actions against overloading and speeding of vessels. She assured members that the Administration was actively pursuing the case. However in view of the possible legal action against the company, it would not be appropriate to discuss the details of the case in a public forum.

38. Regarding the control and monitoring of licensed ferry services, AC/FP said that the licensee was required to operate the service in accordance with the Schedule of Service. In this regard, C for T was empowered to control the fare, frequency, vessel type and the piers to be used in the same manner as for the green minibuses. If it could be established that the licensee was in breach of the Schedule of Service, for example, by overcharging, and that there was no improvement after warnings were issued, its licence could be revoked upon the completion of a series of procedural requirements.

39. On the selection criteria for licenced ferry operators, AC/FP said that the Administration would not simply focus on the proposed fare level, they would also consider the financial position of tenderers, the proposed level of services including vessel type, frequency of service and previous experience in the trade, and past performance, if applicable.

40. A member observed that the operation of the illegal ferry services by Polly Ferry Company Ltd. had prompted HYF to deploy high speed ferries to serve the route between Yung Shue Wan and Central and queried whether the Administration had ever considered the need for such high quality ferry services. AC/FP advised that the hover ferry service was introduced in response to requests made by HYF's passenger liaison group and not solely in response to the illegal operation of Polly Ferry Company Ltd. In response to the Chairman, C for T said that both Transport Department and HYF would regularly monitor the demand for ferry services. They would conduct passenger surveys to keep track of changes in demand and passenger expectations. In terms of capacity, HYF had all along been able to meet the passengers demand during peak periods. In response to rising demand for speed and comfort, the company would also consider deploying more high speed vessels to serve the Lamma Island.

41. Members generally considered the operation of illegal ferry services during peak periods unfair to HYF and urged the Administration to rectify the loophole as soon as possible.

VII Any other Business

(PLC Paper No. CB(1) 643 - Implementation of the Octopus prepared by Creative Star; and Information paper prepared by the Administration on Kowloon-Canton Railway Corporation (Amendment) Bylaw 1997; North-west Railway (Amendment) Bylaw 1997; and Mass Transit Railway (Amendment) Bylaw 1997)

Implementation of the Octopus and the associated legislative proposals

42. At the meeting on 22 October 1997, members asked to be kept informed of further progress on the implementation of the Octopus. In response to members' request, Creative Star Ltd. had provided an information paper on the subject. The Administration had also prepared information papers on legislative proposals associated with the implementation of the Octopus.

43. A member urged Kowloon Motor Bus Co. Ltd. to extend the use of the Octopus to other bus routes as early as possible, in particular, the routes to MTR or KCR stations.

44. Even though the reasons for requiring a $50 deposit for an Octopus card had been discussed at the meeting on 22 October 1997, some members still considered the amount of deposit too high. Noting that one of the reasons for requiring a deposit was that the maximum negative value that could be incurred in an Octopus card was $35, a member pointed out that in most cases, the negative value incurred by the last journey would be much less than $35. Even with the Tung Chung line in place, the proportion of passengers using this service would only be minimal as compared to the proportion of other Octopus users. Instead of pitching the deposit at such a high level, he suggested that the company should alert passengers to recharge their cards if it was detected that the remaining value of a card was not sufficient to cover the full fare of the trip.

Error! Bookmark not defined. The Chairman, Creative Star Ltd. said that as he had explained at the meeting held on 22 October 1997, since the use of Octopus cards was not subject to any annual fee and the interest accrued from the deposits would be used to cover part of the transaction costs, it was considered appropriate for the company to require a $50 deposit. It was intended that the deposit would be maintained at the current level for several years. As to the suggestion to stop passengers at entry gates if they did not have sufficient value on their cards, he said that the proposed system would cause inconvenience to passengers. Furthermore, it would be difficult to generate a clear message to inform passengers whether they would be able to make another journey, as the intended length of the journey could not be determined at the point of entry.

45. After discussion, the Chairman requested the company to take note of members' view and re-consider the feasibility of lowering the deposit of $50.

46. Regarding the legislative amendments in connection with the implementation of the Octopus, members noted that at its meeting on 5 December 1997, the House Committee agreed that the Administration should be asked to defer moving the motion to amend the Kowloon-Canton Railway Corporation Bylaws, the North-west Railway Bylaws and the Mass Transit Railway Bylaws at the Council meeting on 17 December 1997. S for T would give notice of his intention to move the motions to amend these bylaws at the Council meeting on 7 January 1998, after sorting out the outstanding drafting points with the Provisional Legislative Council Legal Adviser.

47. Noting that the two railway corporations had taken a lenient approach in the first few months of the Octopus operation towards passengers breaching their bylaws, a member reminded the Administration to carry out sufficient publicity to alert passengers of the amendments to the bylaws. In response, DS for T said that apart from educating passengers on the use of the new smart card system, the company would launch suitable advertising campaigns when the bylaws were passed. The companies would also exercise discretion in enforcing the relevant provisions. In 1996, there were around 2,000 prosecution cases against passengers who had breached the Kowloon-Canton Railway Corporation Bylaws, of which, a few hundred cases were related to fare tickets.

48. There being no other business, the meeting ended at 10:35 am.

Provisional Legislative Council Secretariat
11 February 1998