LC Paper No. CB(1)1165/98-99
(These minutes have been
seen by the Administration)

Ref: CB1/PL/ES

LegCo Panel on Economic Services

Minutes of meeting held on Tuesday, 2 March 1999, at 2:30 pm in the Chamber of the Legislative Council Building

Members present :

Hon James TIEN Pei-chun, JP (Chairman)
Hon Fred LI Wah-ming (Deputy Chairman)
Hon Kenneth TING Woo-shou, JP
Hon David CHU Yu-lin
Hon LEE Wing-tat
Hon Martin LEE Chu-ming, SC, JP
Dr Hon David LI Kwok-po, JP
Hon MA Fung-kwok
Hon CHEUNG Man-kwong
Hon Ambrose CHEUNG Wing-sum, JP
Hon HUI Cheung-ching
Hon CHAN Yuen-han
Hon Bernard CHAN
Hon CHAN Kam-lam
Hon SIN Chung-kai
Dr Hon Philip WONG Yu-hong
Hon WONG Yung-kan
Hon Howard YOUNG, JP
Hon LAU Chin-shek, JP
Hon Mrs Miriam LAU Kin-yee, JP
Hon Andrew CHENG Kar-foo
Hon FUNG Chi-kin

Member attending :

Hon NG Leung-sing

Members absent :

Hon Eric LI Ka-cheung, JP
Hon Christine LOH

Public officers attending:

Item IV

Mr Stephen IP
Secretary for Economic Services

Mr Arthur HO
Deputy Secretary for Economic Services

Mr Howard LEE
Principal Assistant Secretary for Economic Services
(New Airport)

Mr Albert K Y LAM
Director of Civil Aviation

Assistant Director (Technical & Planning)
Civil Aviation Department

Item V

Mr Stephen IP
Secretary for Economic Services

Mr Richard YUEN
Deputy Secretary for Economic Services

Assistant Director/Port Control
Marine Department

Item VI

Mr Stephen IP
Secretary for Economic Services

Ms Maria KWAN
Deputy Secretary for Economic Services

Miss Dora FU
Principal Assistant Secretary for Economic Services

Assistant Director (Agriculture and Regulation)
Agriculture and Fisheries Department

Dr Gloria TAM
Assistant Director (Hygiene)
Department of Health

Miss Pamela LAM
Senior Administrative Officer (Hygiene)
Department of Health

Assistant Commissioner
(Control and Intellectual Property)
Customs & Excise Department

Mr LAI Kwok-tung
Assistant Director (Environmental Health Policy)
Regional Services Department

Mr KWAN Ka-lun
Senior Staff Officer (Health Services)
Regional Services Department

Mr PO Pui-leong
Assistant Director (Environmental Health) 1
Urban Services Department

Mr NG King-sun
Senior Staff Officer (Public Health) 2
Urban Services Department

Item VII

Mr Stephen IP
Secretary for Economic Services

Ms Maria KWAN
Deputy Secretary for Economic Services

Miss Dora FU
Principal Assistant Secretary for Economic Services

Assistant Director (Agriculture and Regulation)
Agriculture and Fisheries Department

Deputy Director of Architectural Services
Architectural Services Department

Chief Project Manager
Architectural Services Department

Assistant Director (Environmental Health)
Urban Services Department

Staff Officer (Abattoirs & Privatisation)
Urban Services Department

Director of Regional Services

Deputy Director (Administration)
Regional Services Department

Assistant Director (Environmental Health Policy)
Regional Services Department

Mr Gilbert CHU
Senior Staff Officer (Special Project)
Regional Services Department
Clerk in attendance :
Ms Estella CHAN,
Chief Assistant Secretary (1)4
Staff in attendance :
Mr Daniel HUI,
Senior Assistant Secretary (1) 5
I Confirmation of minutes and matters arising
(LC Paper No. CB(1)884/98-99 - Minutes of the meeting held on 23 November 1998
LC Paper No. CB(1)912/98-99 - Minutes of the meeting held on 11 December 1998)

Confirmation of minutes

The minutes of the meetings held on 23 November 1998 and 11 December 1998 were confirmed.

Matters arising

2. In reply to Mr Fred LI Wah-ming's question on the timing for follow-up discussion on the interconnection system of the two power companies and retail prices of major fuels, the Secretary for Economic Services (SES) advised that the consultant appointed by Government to study the interconnection system of the two power companies expected to complete its report in April 1999. The Administration would like to brief members on the subject at a Panel meeting afterwards.

3. As regards retail prices of major fuels, SES said that the Economic Services Bureau and the Consumer Council were jointly examining the data collected from oil companies. The Administration was ready to discuss this subject as well as the safety of flueless gas water heaters at the next regular meeting of the Panel on 22 March 1999. However, as members might agree that the issue of safety of flueless gas water heaters was more urgent, the subject of retail prices of major fuels may be discussed at a later stage.

II Information papers issued since last meeting

(LC Paper No. CB(1)829/98-99-Import and retail prices of major fuels from ecember 1996 to November 1998
LC Paper No. CB(1)848 and 858/98-99-Retention of a supernumerary post in the Economic Services Bureau
LC Paper No. CB(1)853 and 865/98-99-Retention of a supernumerary post of Assistant Director of the Hong Kong Observatory
LC Paper No. CB(1)908/98-99-Import and retail prices of major fules from January 1997 to December 1998)

4. Members noted the information papers issued since last meeting.

III Items for discussion at the next meeting
(LC Paper No. CB(1)913/98-99(01) - List of outstanding items for discussion)

5. Noting the comments made by SES under agenda item I and the House Committee's decision made on 26 February 1999 to request relevant Panels to follow up the recommendations of the three inquiry reports on the new airport, members agreed to discuss the following subjects at the next regular meeting scheduled for 22 March 1999, at 10:45 am:

  1. Safety of flueless gas water heaters; and

  2. Follow-up on the recommendations of the three inquiry reports on the new airport.
IV Satellite Based CNS/ATM System
(LC Paper No. CB(1)913/98-99(02) - Information paper provided by the Administration)

6. The Director of Civil Aviation (DCA) briefed members on the Administration's proposal regarding the study, trial and implementation of the satellite-based Communications, Navigation, Surveillance / Air Traffic Management (CNS/ATM) Systems for air traffic control operation as set out in the information paper provided by the Administration.

7. In reply to the Chairman's question on whether some of the equipment of the CNS/ATM Systems could be made available for shared use amongst the airports of Hong Kong and neighbouring cities, DCA advised that the system study on the CNS/ATM Systems would try to identify whether some of the elements of the systems could be shared with neighbouring airports, and that if so, the possibility of sharing equipment costs could be further pursued.

8. Mr Howard YOUNG opined that airlines would support satellite-based CNS/ATM Systems because most of the aircraft had been installed with equipment which were compatible with these systems. Noting that there were a number of research findings which suggested that the use of some electronic equipment by passengers in a flying aircraft could affect the normal operation of the navigation system of the aircraft, he enquired whether the satellite-based CNS/ATM systems could avoid interference caused by use of electronic equipment by passengers and whether the Administration had any plan to ban the use of some electronic equipment, such as mobile phones, by passengers on board of an aircraft. DCA advised that there was yet no conclusive evidence confirming that the use of electronic equipment such as mobile phones and computers by aircraft passengers would interfere with the normal operation of electronic equipment of the aircraft. However, in order to ensure safety, the Civil Aviation Department (CAD) had suggested airlines to advise their passengers to switch off mobile phones, computers etc. during the critical phases of flight when the aircraft was landing or taking off. He supplemented that under existing legislation, the captain of an aircraft had the authority to order his passenger to switch off certain equipment to ensure the safety of the aircraft. He further advised that CAD had found that most of the radio frequency interference in Hong Kong was caused by radio emissions from paging stations in Guangdong Province. CAD had been working with the relevant authorities in the Mainland with a view to reducing the radio frequency interference.

9. As regards whether the normal operation of the satellite-based CNS/ATM Systems could be affected by radio frequency interference arising from use of electronic equipment by aircraft passengers, DCA said that he could not provide an answer at the moment because the technical specifications and operating details of the proposed systems were yet to be defined.

10. Mr LEE Wing-tat recalled that the Administration had requested funding in 1996 for the new airport in Chek Lap Kok. He wondered whether the Administration had considered purchasing satellite-based systems in 1996 since the International Civil Aviation Organization (ICAO) had already worked out the Global Implementation Plan for the satellite-based CNS/ATM systems in 1993. The Principal Assistant Secretary for Economic Services (New Airport) (PAS/ES(NA)) replied that the funding request made in 1996 was related to the air traffic control equipment for the Second Runway and the anciliary air traffic control equipment. Funding approval for the main air traffic control systems for the new airport was sought as early as 1992/93. At that time technical details of satellite-based CNS/ATM systems were not yet finalised and the relevant equipment was not available in the market. DCA further advised that the current proposal was to procure equipment of the satellite-based systems in stages over many years extending beyond year 2010. By that time most of the equipment of the existing air traffic control systems of the new airport would be due for replacement.

11. Noting that the implementation of the proposed systems would be phased over 18 years between 1999-2000 and 2016-2017, the Chairman was concerned whether equipment purchased in the middle of the implementation period would become obsolete by the end of the period, causing a waste of public funds. DCA advised that the proposed satellite-based CNS/ATM systems were a new generation of technology. Even though there might be new models of equipment manufactured from time to time, the technology base of different models would be similar and therefore the older models could continue to be used throughout their life-spans before being replaced by new models.

12. Mr HUI Cheung-ching remarked that many airlines had complained about the high airport charges. He expressed concern that the project cost of the proposed CNS/ATM systems which would be recovered via the Air Traffic Control and En-route Navigation Services Charges (ATC and ENS Charges) would further increase the charges on airlines for using the new airport, thus leading to airlines using other airports in neighbouring cities. DCA replied that the ATC and ENS Charges were not new charges. The project cost of the existing CNS/ATM systems was being recovered through the ATC and ENS Charges and even if there was no such satellite-based systems, there would also be capital expenditure when the existing systems were due to be replaced.

13. Mr SIN Chung-kai agreed that the CNS/ATM systems used in Hong Kong should be at par with international standard. He was of the view that more detailed data on the proposed systems should be provided in order to justify the funding request. He also sought clarification on the amount of funds to be sought to cover the project. PAS/ES(NA) advised that the project cost included non-recurrent and recurrent costs. The non-recurrent cost was estimated to be $1.04 billion to be expended between 1999-2000 and 2016-2017, and the Administration intended to seek funds from the Finance Committee in stages. The recurrent cost was about $6 million in 1999-2000. The necessary resources had been included in CAD's 1999-2000 draft Estimates. SES emphasised that the proposed system would enhance safety in air traffic and was necessary for Hong Kong's development into an international aviation centre. Moreover, the Mainland and Singapore had also decided to use satellite-based CNS/ATM systems. He further advised that the information paper provided by the Administration intended to provide members with a general picture of the proposed systems and the estimated amount of funds required.

14. Members generally supported the need for satellite-based CNS/ATM systems for Hong Kong. As requested by the Chairman, SES agreed that more detailed information would be provided when the proposal was submitted to the Finance Committee.Admin.

V Review of Speed Limits for Vessels in Hong Kong Waters
(LC Paper No. CB(1)913/98-99 (03) - Information paper provided by the Administration)

15. A submission from Merchant Navy Officers' Guild - Hong Kong (MNOG) was tabled at the meeting.

(Post-meeting note: The submission has been subsequently circulated to members vide LC Paper No. CB(1) 967/98-99(01))

16. The Assistant Director/Port Control (AD/PC) briefed members on the Administration's proposal to revise the speed limits for vessels navigating within Hong Kong waters as set out in the information paper.

17. Mrs Miriam LAU Kin-yee enquired about the basis for enlarging the existing Speed Restriction Area (SRA). Referring to the submission from MNOG, she pointed out that the trade was concerned whether high speed craft providing scheduled services between Hong Kong and Macau would be subject to any speed limit when navigating south of Peng Chau and Kau Yi Chau. She said that the MNOG had in fact proposed that high speed craft should be allowed to operate at the normal cruising speed of 40 knots between the western harbour limit to Sunshine Island. In response, AD/PC advised that the main purpose of the Administration's proposal was to ensure navigational safety and port efficiency. He further advised that under the proposal, high speed craft would continue to be exempted from speed limits, except in the proposed Speed Restriction Sub-Zone (SRSZ) where high speed craft would be subject to a speed limit of 35 knots. The sea area between the western harbour limit and Sunshine Island was proposed to be designated as a SRA, because the waters at the north of Lamma Island would be designated as a quarantine anchorage and waters at the south of Kau Yi Chau was currently an anchorage for vessels carrying dangerous goods, giving rise to an expected substantial increase in the number of vessels anchored in the area.

18. The Chairman doubted whether the proposed speed limits in the SRSZ would be effective in enhancing port safety if the revised speed limits were only marginally less than the existing speed limits. Mr LEE Wing-tat noted that the waves in the Victoria Harbour had become rougher and enquired whether the Administration's proposals could prevent the situation from deteriorating in the next 10 years. The Deputy Secretary for Economic Services (DS/ES) and AD/PC advised that the consultancy study on Marine Activities, Associated Risk Assessment and Development of a Future Strategy for the Optimum Usage of Hong Kong Waters (MARAD study) commissioned by the Administration had found that there was increasing waves in the Victoria Harbour because of the large number of vessels navigating in the harbour, particularly the hovercraft which would create a lot of waves while navigating. The consultant undertaking the MARAD study had recommended that the speed limits in the harbour area be reduced by 10% in order to reduce waves in the harbour and enhance safety in navigation. On the other hand, the Administration was aware that an across-the-board 10% reduction in speed limits would have impact on the operational efficiency of scheduled ferry services operators. The present proposal therefore represented a suitable balance between navigational safety on the one hand and port efficiency on the other.

19. In reply to Mr Fred LI Wah-ming's question on whether there would be difficulties in enforcing the proposed speed limits in Hong Kong waters, AD/PC confirmed that it would be more difficult to use a laser equipment in detecting the speed limit of a vessel than that of a car but Marine Department (MD) had successfully prosecuted 11 cases, out of a total 17 prosecutions, involving vessels speeding in the restricted areas in 1998.

20. Mr WONG Yun-kun opined that one of the contributing factor of increasing waves in the Victoria Harbour was that the waterfront design of the piers and reclaimed land was not wave absorbing. DS/ES agreed and said that since existing waterfronts were constructed many years ago, it would be very costly to reconstruct them. However waterfronts to be constructed in future would have a wave-absorbing design. The Chairman opined that the Administration should also be careful about the consequential effect of increased reclamation in the Victoria Harbour which would lead to reduced sea area and hence increasing waves in the Harbour. DS/ES noted the Chairman's comments.

21. In reply to Mr Wong's question on revised speed limit within typhoon shelters, AD/PC confirmed that the speed limit within typhoon shelters would be revised from 3 knots to 5 knots. As regards the proposal to extend the speed limit in the pleasure vessels speed restriction zones to all vessels, he advised that the proposal aimed to provide better protection to swimmers and persons doing water sports in those popular boating areas.

22. Mrs Miriam LAU said that the trade had indicated to her that the western boundaries of the proposed SRA was more difficult to recognize as compared with the boundaries of the existing restricted area. She enquired whether MD would establish some structure such as floating markers, to assist captains of vessels to recognize the new boundaries. The Chairman was of view that amateur navigators of pleasure boats would be particularly in need of assistance to help them to recognize the new boundaries. AD/PC advised that the new boundaries should not be difficult to recognize in the navigational maps used by captains. He supplemented that in enforcing speed limits, MD officers would not focus on whether a vessel had exceeded the specified speed limit right after crossing into the SRA. MD officers would be more concerned about observing the speed limits in the central areas of SRA and SRSZ where marine traffic was the busiest. He agreed however that MD would try to establish floating markers to assist vessel captains to recognize the boundaries of SRA where necessary.

23. In response to Mrs Miriam LAU kin-yee's question on the rationale for using a ship length of 60m as the criterion for classifying the two classes of vessels subject to different speed limits, AD/PC advised that one of the objectives of the Administration's proposal was to simplify the classification of vessels from three classes to two classes, i.e. vessels with length over 60m and vessels with length at 60m or below. The 60m criterion was used because most of the ships licensed in Hong Kong were of the length of 60m or below and those with length over 60m were usually ocean-going liners.

24. Mr SIN Chung-kai opined that one of the long term strategies to enhance navigation safety and port efficiency of the Victoria Harbour was to divert some marine traffic from the Harbour. In this regard, he enquired whether the Administration had considered the option of relocating the China - Hong Kong Terminal from Tsim Sha Tsui to Tsuen Wan near the future West Rail Tsuen Wan station. This would also help to provide an improved land transportation link for passengers travelling between Hong Kong and China by means of ferries. He further said that the Administration should also consider relocating the piers for outlying islands ferry services from Central to the west of the Harbour. In response, DS/ES advised that the marine traffic in Victoria Harbour was bound to increase as a result of economic development and increased ferry services to meet the growing passenger demand. The MARAD study also recognized the need to de-centralize port activities westward thus to enhance port efficiency and to reduce conflict of traffic. The consultants for the "Inner Harbour Wave Study" also recommended, inter alia, revised speed limits in Harbour areas. He said that he would forward Members' suggestion to the Transport Bureau for consideration.

25. Summing up the discussion, the Chairman said that members were generally supportive of the proposed revision to speed limits in SRA and SRSZ.

VI Sustainable development of the pig raising industry
(LC Paper No. CB(1)913/98-99(04) - Information paper provided by the Administration)

(Note: The Chairman left the meeting at this point and the Deputy Chairman was in the Chair for the rest of the meeting)

26. A joint submission from Hong Kong Pigfarm Association, the Hong Kong Livestock Industry Association, Hong Kong Graziers Union and The Federation of Pig Raising Co-operative Societies of Hong Kong, Kowloon and New Territories, Limited, on development of the pig raising industry in Hong Kong was tabled at the meeting.

(Post-meeting note: The joint submission has subsequently been circulated to members vide LC Paper No. CB(1)967/98-99(02))

27. Mr WONG Yun-kan opined that whilst the information paper provided by the Administration had set out measures taken by the Administration in addressing some of the problems faced by the pig raising sector, there was no mention of a comprehensive policy to assist the pig raising industry to achieve sustainable development. Referring to the joint submission from the pig raising sector tabled at the meeting, he hoped that the Administration would consider the recommendations in the submission and develop a comprehensive policy to assist the industry. The Assistant Director of Agriculture and Fisheries (AD/AF) advised that the measures set out in the Administration's information paper were a response to some specific concerns of the pig raising sector mentioned in its earlier submissions. Apart from those measures, the Administration had been collaborating with the tertiary education institutes on researches on improvement of pig species and vaccines for certain livestock diseases. On the subject of vaccines for certain livestock, the Agriculture and Fisheries Department had invited overseas experts and manufacturers of vaccines for livestock diseases to participate in a seminar to be held on 29 March 1999. Representatives from the local pig raising industry had also been invited to attend. In addressing the industry's request for more land for pig raising, AFD would further consider in conjunction with other Government Departments the proposal of multi-storey farm houses.

28. Mr WONG observed that multi-storey farm houses were not permitted under existing legislation and enquired whether the Administration would initiate legislative amendment as soon as possible so that the local pig raising sector could construct multi-storey farm houses to improve on productivity. AD/AF replied that the Planning, Environment and Lands Bureau and the Buildings Department were jointly examining the subject and the result of the review would be available soon. In reply to the Deputy Chairman's question, AD/AF advised that the local pig raising sector supplied about 15% of the total local demand for live pigs.

29. Mr CHEUNG Man-kwong said that he had received complaints from some meat traders in Tuen Mun that they were threatened and forced by triad members to purchase chilled pork from Thailand. He considered this an act of blackmailing and the Police should actively investigate into the matter. The Principal Assistant Secretary for Economic Services advised that according to the Police, no report about manipulation by triads of marketing of chilled pork from Thailand was received so far. However as requested by Mr CHEUNG, SES agreed to request the Police to investigate into the case.Admin.

30. The Deputy Chairman enquired whether retailers of fresh meat and chilled meat required different licences and whether there was any monitoring system to ensure compliance. He also enquired whether it was difficult to differentiate chilled port from fresh pork. The Assistant Director (Environmental Health Policy) of the Regional Services Department (AD(EHP)/RSD) advised that the sale of fresh or frozen meat, including pork, in Hong Kong required a licence issued by the authorities concerned. The commodities e.g. fresh and/or chilled pork, allowed to be sold were stipulated in the licence. Staff of the Regional Services Department and Urban Services Department would carry out regular inspections to ensure compliance with the hygiene requirements. Wet market stalls were not however allowed to sell both fresh and frozen meat from the same stall. Prosecution action would be taken against offenders where appropriate. As regards differentiating fresh pork from chilled pork, he advised that after defrosting, chilled pork looked the same as fresh pork and it would be very difficult to differentiate one from the other. In order to check on suspected cases, RSD/USD officers had to look for evidence such as carton boxes for containing chilled meat and to check records of the relevant slaughterhouse to tally with the amount of pork displayed for sale at the stall.

31. Referring to the joint submission from the pig raising sector, Mr SIN chung-kai enquired whether the Administration would consider designating certain areas in the New Territories for development of the pig raising industry. Ms CHAN Yuen-han enquired about the priority accorded by the Administration in development of pig raising industry in Hong Kong. SES advised that the Administration recognized the importance of pig raising industry as a sector of the agriculture industry. In this respect, the Administration had a number of measures, including support for research and development work, for further development of the agriculture industry. He further advised that a consultancy study on Arrangements for Supporting the Development of Agriculture in Hong Kong had just been completed and the Administration would consult interested parties.

(Post-meeting note: An Executive Summary of the Report of the Consultancy Study has been circulated to member vide LC Paper No. CB(1)1018/98-99 dated 16 March 1999.)

32. As regards the designation of certain areas for the pig raising industry, AD/AF said that land was a scarce resources in Hong Kong and the long term planning on land use was a responsibility of the Planning Department. He further advised that much of the unused land in the New Territories was designated for agriculture use and such land could be used for pig raising. As requested by members, SES agreed to examine the joint submission from the pig raising sector.Admin.

33. Mr NG Leung-sing said that representatives from the pig raising sector had reflected to him about the increasing problem of smuggling of live pigs into Hong Kong and enquired about measures taken to address the problem. In response, the Assistant Commissioner of Customs and Excise advised that the Customs and Excise Department had regular enforcement teams to patrol both land and sea for anti-smuggling purposes. These teams maintained contacts with the industry for any smuggling information and they had successfully cracked down on a number of cases involving smuggling of live pigs. He said that his Department would closely monitor development of the matter.

34. Mr CHEUNG Wing-sum enquired about roles played by different Bureaux and Government Departments in the existing system on control of import of live pigs and pork into Hong Kong and whether the co-ordination amongst the Departments concerned were efficient. AD/AF advised that the current system on tattoo numbering of pigs and sample testing of pig urine before slaughtering was an effective means in identifying pigs with problems and tracing the farm of origin of the pigs concerned. This system had proved effective in safeguarding public health. As regards the control on import of pork into Hong Kong, the Assistant Director (Hygiene) of the Department of Health advised that the existing control system in respect of food safety was as set out in paragraph 12 of the information paper.

35. On the subject of efficiency of co-ordination amongst Bureaux and Government Departments in relation to control on import of live pigs and pork, SES advised that the co-ordination had improved but the Administration would continue to achieve better efficiency.

VII Transitional arrangement for the Opening of Sheung Shui Slaughterhouse
(LC Paper No. CB(1)913/98-99(05) - information paper provided by the Administration)

36. The Chief Project Manager of Architectural Services Department (CPM/ASD) responsible for the Sheung Shui Slaughterhouse (SSSH) project briefed members on the architectural design and phased commissioning of SSSH as set out in the information paper provided by the Administration.

37. Noting the estimated risk of malfunctioning of the waste water treatment facilities in SSSH during phase I of the commissioning programe, Mr Andrew CHENG Kar-foo enquired whether it was possible to extend the duration of phase I commissioning in order to reduce the risk of malfunctioning of the waste water treatment facilities. He also enquired about measures taken by the Administration with a view to reducing nuisance arising from the odour released from the SSSH. CPM/ASD advised that in determining the duration required for phase 1 commissioning, the Administration had conducted pilot plant test for treatment of wastewater in the Cheung Sha Wan Abattoir (CSWA) which showed that the response of the micro-organisms which helped treating the waste water could be extremely unstable in the first 28 days after transplanted from other sewage treatment works. Moreover, the micro-organisms became more stable after the transplanted micro-organism aged during the subsequent 14 days. If the waste water treatment facilities could stand through the first 42 days of its operation, the risk of malfunctioning would be reduced substantially. As regards odour from SSSH, he advised that during the environmental impact assessment study on the SSSH conducted in 1995, samples of air were collected in the vicinity of currently operating slaughter houses in order to estimate the degree of bad odour that could come out from SSSH. Based on these research findings, SSSH had been designed with a view to ensuring that the odour from SSSH would be reduced to a standard acceptable by the Environmental Protection Department.

38. In reply to Mr CHENG's concern about whether transporting of livestock to SSSH by railway tracks would have any impact on the normal operation of the Kowloon-Canton Railway Corporation (KCRC), CPM/ASD advised that KCRC had carefully considered the arrangement for transporting livestock to SSSH by railway tracks. The current idea was to provide two specialized service to SSSH per day at about 11:00 am and 3:00 pm and this would not have any impact on the normal service of KCRC. As to Mr Howard YOUNG's enquiry on whether the road transport system in the vicinity of SSSH would be adequate to meet the increased traffic volume after SSSH was in full operation, the Deputy Director (Administration) of the Regional Services Department (DDA/RSD) advised that a transport impact assessment study on the SSSH project had been conducted in the planning stage. The transport aspects of the project, which had been worked out in consultation with relevant Government Departments and the North Provisional District Board, should be able to handle additional traffic flow arising from operation of SSSH.

39. Referring to the phased commissioning programme of SSSH and phased decommissioning of existing abattoir/slaughterhouses, Mr CHEUNG Wing-sum said that the arrangement of maintaining CSWA as standby during phase I commissioning of SSSH would burden the Provisional Urban Council (PUC) with an anticipated loss of around $14 million to $16 million. Moreover, PUC had worked on a schedule of closing CSWA upon phase II commissioning of SSSH in October 1999 and had therefore given the required one-year prior notification on termination of employment to the relevant staff in September 1998. In the event that CSWA had to operate after September 1999, there would not be any guarantee that the staff of CSWA would be available. In this regard, he urged that the Administration should notify PUC as early as possible if the closing of CSWA were to be deferred. He also opined that additional expenditure incurred by PUC because of any further delay in decommissioning CSWA should be borne by the Administration. SES agreed with Mr CHEUNG that early notification should be given to staff concerned of the possibility that CSWA might have to operate after September. He agreed that the Urban Services Department should consult staff early in this regard.Admin.

40. In reply to the Deputy Chairman's question on the composition of the Task Force set up to co-ordinate and monitor the work required for the smooth commissioning of SSSH, the Director of Regional Services Department (DRS) advised that the Task Force comprised representatives from all bodies concerned: relevant Government Departments including the Architectural Services Department, Electrical and Mechanical Services Department, Urban Services Department, Regional Services Department, Agriculture and Fisheries Department, etc; KCRC and Ng Fung Hong Limited (NFH).

41. Noting that the management and operation of SSSH would be undertaken by NFH, Mr WONG Yung-kan enquired whether there would be a special counter/area to be designated in SSSH for sale of local live pigs. In response, AD(EHP)/RSD advised that the existing arrangement of keeping certain counters for sale of local live pigs in CSWA and Kennedy Town Abattoir (KTA) would be maintained in SSSH. Moreover, NFH being the authorized operator of SSSH could not refuse to provide slaughtering service for livestock legally sent to it for slaughtering irrespective of the origins of the livestock.

42. Mr SIN Chung-kai said that since SSSH's capacity would be equivalent to the combined capacities of the three existing slaughterhouses to be closed, NFH should be able to achieve economy of scale in terms of operational costs. Moreover, the construction costs of $1,925 million for SSSH was paid from public funds. He was of the view that the fees to be charged for slaughtering livestock in SSSH should be lower than comparable fees currently levied by the CSWA and KTA. DD(A)/RSD replied that the Administration had discussed with NFH which indicated that its fees for slaughtering service to be provided in SSSH would not be higher than existing fees, subject to adjustment for inflation. The Finance Bureau had also examined NFH's proposals on fees to be levied and considered them reasonable. He opined that NFH being a commercial organization would be willing to manage and operate the SSSH only if there would be a reasonable level of profits. The Deputy Director of the Architectural Services Department supplemented that the operational costs in SSSH would be higher than similar costs in running existing slaughterhouses because of the more stringent environmental protection requirements applicable to SSSH. Dissatisfied with the Administration's response, Mr SIN requested that more data on cost structure in operating SSSH should be provided. SES agreed to see what further information could be provided in this respect.Admin.

43. Noting that NFH would be in a quasi-monopolistic position in the provision of slaughtering service in Hong Kong after the operation of SSSH, Mr CHEUNG Man-kwong enquired whether there would be a profit control scheme for NFH. DD(A)/RSD explained that this could not be regarded as a case of monopoly as the contract for management and operation of SSSH was awarded through a public tender exercise on the basis of specific criteria open to all. In the event, NFH's was the only tender received. SES and DRS supplemented that the Tsuen Wan Slaughterhouse (TWSH) would continue to operate as a competitor to NFH after the opening of SSSH, and the designed capacity of TWSH had not been fully utilized. As regards the current slaughtering fees paid by meat traders to abattoir/slaughterhouses, AD(EHP)/RSD advised that meat traders had to pay different fees, including a fee to RSD and USD for meat inspection which was designed on a cost recovery basis. In addition, meat traders had to pay a fee to the operator of the slaughterhouse for slaughtering services rendered. The Administration had no control on the fee levied by operator of a slaughterhouse as it was purely a commercial matter for a private business.

44. Mr SIN Chung-kai doubted whether NFH and operator of TWSH would be competing on equal grounds since the construction costs of TWSH were borne by the private sector whereas the construction costs of SSSH was paid by public funds. Mr CHEUNG Man-kwong reiterated the need for a mechanism to monitor the level of fees to be charged by NFH. He also requested further information on the basis for according priority to NFH to renew its contract for management and operation of SSSH for two more terms of three years each, and the proposed terms of the renewal contract. In response, SES said that he understood members' concerns about the level of fees to be charged by NFH. He agreed to provide further information on the subject as requested by members.Admin.

VIII Any other business

45. There being no other business, the meeting ended at 5:00 pm.

Legislative Council Secretariat
23 April 1999