LC Paper No. CB(1) 340/98-99
(These minutes have been
seen by the Administration)

Ref : CB1/PL/TP

Panel on Transport

Minutes of meeting
held on Friday, 25 September 1998, at 10:45 am
in Conference Room A of the Legislative Council Building

Members present :

Hon Mrs Miriam LAU Kin-yee, JP (Chairman)
Hon LAU Kong-wah (Deputy Chairman)
Hon Edward HO Sing-tin, JP
Hon Albert HO Chun-yan
Dr Hon Raymond HO Chung-tai, JP
Hon LEE Wing-tat
Hon LEE Kai-ming, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon LAU Chin-shek, JP
Hon Andrew CHENG Kar-foo
Hon TAM Yiu-chung, JP

Member absent :

Hon Andrew WONG Wang-fat, JP

Public officers attending :

Item IV

Mr Nicholas NG
Secretary for Transport

Mrs Fanny LAW
Commissioner for Transport

Ms Linda LAI
Deputy Secretary for Transport
(Transport Services)

Mrs Dorothy CHAN
Deputy Commissioner for Transport

Mr Brian LO
Principal Assistant Secretary for Transport

Item V

Mr Nicholas NG
Secretary for Transport

Mrs Fanny LAW
Commissioner for Transport

Ms Linda LAI
Deputy Secretary for Transport
(Transport Services)

Mr Alex FONG
Deputy Secretary for Transport

Item VI

Mrs Fanny LAW
Commissioner for Transport

Mr Alex FONG
Deputy Secretary for Transport

Principal Assistant Secretary for Transport

District Planning Officer / Hong Kong

Mr Lawrence KWAN
Chief Traffic Engineer / Hong Kong

Clerk in attendance :

Mr Andy LAU,
Chief Assistant Secretary (1)6

Staff in attendance :

Mr Daniel HUI,
Senior Assistant Secretary (1) 5

I Confirmation of minutes and matters arising
(LC Paper No. CB(1)157/98-99 - Minutes of meeting held on 31 July 1998)

The minutes of the meeting held on 31 July 1998 were confirmed.

II Information papers issued since last meeting

(LC Paper No. CB(1)154/98-99 Review of Taxi Licensing System
LC Paper No. CB(1)205/98-99 Plans of the West Rail (Phase 1) Project
LC Paper No. CB(1)207/98-99 Initial Operations of New World First Bus Services Limited
LC Paper No. CB(1)232/98-99 Compatibility of Autotoll System
LC Paper No. CB(1)238/98-99 Road Traffic (Amendment) Bill 1998)

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

III Items for discussion at the next meeting scheduled for 23 October 1998
(LC Paper No. CB(1)223/98-99(01) - List of outstanding items for discussion)

3. Members agreed to discuss the following items at the meeting to be held on 23 October 1998:

  1. Kowloon - Canton Railway (KCR) Corporation's proposal for the implementation of the Ma On Shan to Tai Wai Rail Link and KCR Extension from Hung Hom to Tsim Sha Tsui; and

  2. Progress report on follow-up actions on Parking Demand and Freight Transport Studies.

4. As requested by members, the clerk would check with the Administration on whether it would be ready to brief members at the Panel meeting to be held on 23 October 1998 on progress on the Third Comprehensive Transport Study including comments received during the consultation exercise.

IV The Hongkong and Yaumati Ferry Co Ltd's franchise and Pier Development Package
(LegCo Brief Ref.: TB CR2/3151/95(98)pt23 dated 15 September 1998)

5. Responding to members' concern about the arrangements for re-employing the redundant staff of Hongkong and Yaumati Ferry Co Ltd. (HYF) upon expiry of HYF's current franchise on 31 March 1999, the Commissioner for Transport (C for T) advised that the Administration had made it a condition in the tender that should new crew members and pier staff be required, priority should be given to the relevant employees of HYF on terms no less favourable than those prevailing in the ferry industry of Hong Kong. She further explained that in order to enhance the competitiveness of the successful bidder, it would not be appropriate to require the new operator to take over all redundant staff of HYF at their current terms and conditions of employment. Such a move might affect the existing staff of the company concerned. Nevertheless, the successful bidder should be able to take over at least part of HYF's redundant staff.

6. Noting that under the new arrangement a ferry operator would be granted a three-year licence instead of a ten-year franchise to operate the ferry service, some members were concerned that future ferry fare increases proposals would no longer be subject to the approval of the Legislative Council. The Secretary for Transport (S for T) and C for T clarified that having regard to the changing pattern of ferry patronage and continuous improvement in land transport, the Administration considered that instead of committing an operator to a long term franchise, it would offer more flexibility to both the Administration and the operator if the right to operate ferry services was granted by way of a three-year licence. As regards the mechanism in approving ferry fare increase proposals, C for T explained that the Transport Department would continue to examine fare increase proposals based on the existing set of criteria which included acceptability to the travelling public and the operating costs and revenue of the operator. She further assured members that the Administration would continue to consult the public through the Provisional District Boards on ferry fare increase proposals.

7. Mr Albert HO Chun-yan said that the Democratic Party supported the Administration's decision to tender out the ferry services currently provided by HYF, which would hopefully introduce more competition to ferry services and would lead to improved services. He queried however the basis of granting only a three-year licence, as opposed to a longer-term licence or a franchise agreement. He was concerned that this new arrangement would provide a shorter period for depreciation of fixed assets and hence higher fare to the travelling public. Another member also opined that a licence period of three years would discourage long term investment on ferry-related assets which, in turn, would affect the provision of quality services. S for T explained that under existing legislation, C for T was authorised to issue a licence up to a maximum period of three years. However, subject to satisfactory service, an operator's licence could be renewed after each licensed period up to a maximum cumulative period of ten years. As such, the granting of a licence should not have any adverse effect on an operator's long term investment plan if he had commitment to provide good services. C for T supplemented that in determining its fare levels, an operator had to take into account the competitiveness of the proposed fares and the affordability of the travelling public. Moreover, judging from the fact that about 20 companies had responded to the Administration's invitation of interest for ferry operations in Hong Kong, the granting of a three-year licence was not considered an obstacle by prospective investors.

8. Since new ferry operators would not have the advantage of subsidizing ferry operation costs by way of profits from property development, some members enquired about measures to be taken by the Administration to stabilize ferry fares and to enhance the financial viability of ferry operations. S for T and C for T advised that to enable ferry operators to improve the viability of their operations, the Administration had taken over the maintenance responsibility for pier structure since April 1997. About $49 million had been provided for this purpose in the 1998-99 financial year. With effect from April 1999, the Administration would take up additional responsibility of pier maintenance. C for T supplemented that since 1994, HYF had been improving its operation efficiency through a rationalization programme including the deployment of smaller vessels in the less popular routes. As a result, the financial viability of ferry operations had improved and the need to make use of property development profit to cover operating losses of ferry services had diminished. She believed that with the continued improvement of efficiency, viable ferry services could be provided by the new operators. In the tender exercise, the ferry routes have been repackaged to make them more financially viable.

9. As regards the service and fare levels of the proposed licensed services, C for T advised that the Transport Department (TD) had consulted the Islands Provisional District Board with regard to the residents' expectations on ferry services. The residents' views had been taken into account in drawing up the tender documents which covered requirements on freight and passenger services. The bidders would be required to propose service plans which could meet the residents' aspirations of having a choice between fast ferries at higher fares and ordinary ferries at lower fares. On future monitoring of standard of ferry services, C for T advised that TD would conduct field inspections to ensure that the services would be operated in accordance with the approved schedules of service. Moreover, TD would follow up on complaints received and issue warning letters to ferry operators requesting improvements in specified areas of service if the need so arose.

10. Noting that in future one pier might have to be used by more than one ferry operators, some members were concerned about the possible conflicts and safety implications arising from the shared use of pier facilities. C for T said that the Administration was aware of the likely problems arising from shared use of one pier by two or more ferry operators and would try to contain the problem by allocating as far as possible one pier to one ferry operator. If this was not possible TD would work out with the ferry operators arrangements for shared use of the pier.

11. On criteria for exempting a ferry operator's vessels from subjecting to speed limits in Hong Kong waters, C for T explained that the tender documents had specified that the relevant vessels had to meet the requirements laid down by the Director of Marine before the vessels could be exempted from speed limits while sailing in Hong Kong waters. She stressed that the Administration attached utmost importance to achieving safety in ferry service operations.

12. Mrs Selina CHOW said that the Liberal Party did not object to open tendering of HYF's ferry services and opined that it was important to ensure that open competition would lead to improved services including enhanced safety to the travelling public. She enquired whether the Administration would take into account the relevant experience and size of the companies when considering the tenders. C for T confirmed in the affirmative and stressed that the Administration attached utmost importance to the aspect of safety to the travelling public. In this regard, the Director of Marine would be responsible for assessing the quality and safety standard of the fleet of vessels proposed by each bidder. The crew members of ferry operators would also have to meet the qualification requirements laid down by the Marine Department.

13. As regards the contingency plans for provision of ferry services in case a new ferry operator had to cease operation due to financial problems, C for T explained that the Administration would critically examine the financial position of a bidder before a licence was granted to it. Moreover, there were and would continue to be contingency plans on sudden suspension of ferry services due to various reasons.

14. Some members were concerned that there might not be any ferry services to outlying islands residents during typhoons if the new ferry operators used only small vessels to run the service. C for T advised that the bidders would be required to put up plans for maintaining ferry service when typhoon signal no. 3 was hoisted. She believed that a ferry operator using small vessels for normal operation could make arrangement with other ferry operators on the lease of suitable vessels to maintain ferry service during typhoons. The TD would also make announcement as early as possible through radio and television on suspension of ferry service during typhoon periods.

15. As requested by the Chairman, the Administration agreed to brief the Panel on the ferry services to be provided by each ferry operator after the tenders were awarded.

V Review of the Transport Advisory Committee
(LC Paper No. CB(1)223/98-99(02))

16. A member pointed out that the current membership of the Transport Advisory Committee (TAC) was not truly representative of the views expressed by the public as evidenced by the fact that TAC supported all fare increase proposals from various transport operators. He suggested that the membership of TAC should be revamped to truly reflect public views and that all TAC meetings should be held in public to enhance its transparency. S for T replied that non-official members of the TAC were expected to render impartial and objective advice to the Administration not only on transport fare proposals but on all important transport policy issues. Therefore, non-official members of the TAC had to be impartial and independent. As a lot of commercially sensitive information was discussed at TAC meetings, it would not be possible to open TAC meetings to the public. He stressed however that to enhance transparency, arrangement had been made for the TAC Chairman to meet the media after each TAC meeting and brief them on the views and deliberation of the Committee on individual agenda items. A press release was also issued after each meeting.

17. As regards the existing fare setting mechanism on public transport, S for T explained that the public was able to reflect their views through Provisional District Boards and LegCo Panel on Transport on the fare increase proposals. The two railway corporations had also taken steps in recent years to increase public consultation during the fare determination processes. They also consulted the TAC, briefed the LegCo Panel on Transport and informed the Executive Council before finalising the fare levels. To instill a degree of accountability of the two corporations to the general public on their fare setting mechanism, the Administration would codify the current practice on public consultation. S for T further pointed out that both railway corporations had expressed strong views that the existing fare revision mechanism be retained to enable them to convince lenders of their repayment ability. This ability to borrow on sound financial projections was most important for the implementation of new railway projects.

18. A member expressed concern over the inadequate support services provided to TAC members by the TAC Secretariat, which might adversely affect the quality of work of the TAC. In response, S for T and the Deputy Secretary for Transport (Transport Service) advised that the TAC Secretariat was already headed by one Chief Executive Officer and assisted at the bureau level by one Senior Administrative Officer. There was also a team of supporting staff in the Transport Complaints Unit comprising a Senior Executive Officer, four Executive Officers and more than 10 clerical officers. Moreover, the TAC was also supported on specific issues by different divisions of TD and other relevant departments. S for T further explained that the TAC was only an advisory committee and all executive and monitoring functions were carried out by the TD. If the need arose, TAC would form sub-committees to work on specific issues, such as the recent "Review on Taxi Licensing System". As such, existing staffing of the TAC Secretariat should be adequate for its purpose.

19. Members noted that when the former Secretary for Transport, Mr Gordon SIU Kwing-chu, spoke on the Mass Transit Railway Corporation (Amendment) Bill 1996, he undertook to consider establishing an independent committee to examine fare increase applications from all public transport operators. They pointed out that the Administration's information paper had failed to provide detailed reasons for not establishing the independent committee as promised by the former Secretary for Transport. In response, S for T said that the Administration had conducted a thorough review of the existing fare adjustment mechanism for public transport services and was convinced that there was no need to introduce major changes except that current fare setting mechanism adopted by the two railway corporations should be codified to enhance accountability and transparency. At members' request, S for T agreed to provide further information on the reasons for not establishing an independent committee to examine fare increase applications. Members agreed to follow-up on this issue under agenda item I "Confirmation of minutes and matters arising" at the Panel meeting to be held on 23 October 1998.

VI Multi-storey public carpark at Stanley Market
(LC Paper No. CB(1)208/98-99(01)
LC Paper No. CB(1)208/98-99(02)
LC Paper No. CB(1)223/98-99(03))

20. The Deputy Secretary for Transport / Railways (DS for T/R) informed members that the Transport Bureau was convinced of the need to build a multi-storey carpark at Stanley Market and would proceed to implement the project as soon as possible.

21. In reply to the Chairman's question, the District Planning Officer / Hong Kong said that as the architectural design of the multi-storey carpark had not been finalized, it was not known whether the old trees near the existing bus terminus site would need to be cut away. DS for T/R advised that to address the concerns expressed by some of the local residents on the impact of the multi-storey carpark, special attention would be paid to the design of the project to ensure that it would blend in with the environment.

22. Responding to a member's question on justifications for the construction of the multi-storey carpark, the Chief Traffic Engineer / Hong Kong replied that according to Transport Department's study, there was a shortage of over 100 parking spaces at Stanley during weekends and holidays. The provision of additional parking spaces in Stanley Market was therefore justified. As regards consultation with the Hong Kong Tourist Association (HKTA), DS for T/R said that HKTA had a working group on developing Stanley as a tourist spot and he believed the Association was aware of the proposed construction of a multi-storey carpark at Stanley Market and did not raise any objection to it.

23. Some members opined that the Administration should be decisive on this kind of projects. It would be totally unacceptable to take five to ten years to plan and build multi-storey carpark of this scale. They enquired about the Administration's timetable on this project. The Chairman also requested the Administration to review the decision making mechanism of public works projects so as to ensure the timely delivery of projects to meet the needs of the general public. DS for T/R responded that the project had reached the final stage in the town planning process. The draft outline zoning plan (OZP) including the multi-storey carpark project together with all the unwithdrawn objections would be submitted to the Executive Council for approval by the end of 1998. Regarding the timetable for implementation, he said that the fast track approach was to put the site for land sale and require the developer to undertake the development of the multi-storey carpark. However, the time-frame of this approach would have to tie-in with the resumption of the Administration's land sales programme in 1999. Another alternative was to include the item in the Government's Public Works Programme but this would necessitate the bidding of resources amongst other projects through the normal mechanism and would take a longer time to complete. He stressed that the Administration would take parallel actions to ensure that there would be no delay in implementation of either one of the alternatives.

24. At members' request, DS for T/R undertook to report progress on the project after the Executive Council's approval of the relevant draft OZP.

VII Any other business

Briefing on the Chief Executive's Policy Address 1998

25. Members noted that a Panel meeting had been scheduled for Wednesday, 14 October 1998 at 9:30 am to receive a briefing by the Secretary for Transport on the Chief Executive's Policy Address 1998.

Joint meeting with the Panel on Planning, Lands and Works

26. Members noted that a joint meeting with the Panel on Planning, Lands and Works would be held on Friday, 6 November 1998, to receive the Administration's progress report on the Liquefied Petroleum Gas Taxi trial scheme.

27. There being no other business, the meeting ended at 12:50 pm.

Legislative Council Secretariat
20 October 1998