For discussion FCR(96-97)78
on 6 December 1996

ITEM FOR FINANCE COMMITTEE

HEAD 100 - MARINE DEPARTMENT
Subhead 603 Plant, vehicles and equipment

Members are invited to approve a commitment of $17.8 million for Director of Marine to procure a launch to replace the "Tin Hau".

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PROBLEM
PROPOSAL
JUSTIFICATION

Alternatives
The replacement launch
FINANCIAL IMPLICATIONS

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PROBLEM

The "Tin Hau" has been in service for 27 years, and can no longer meet the requirements of providing safe and efficient marine transport for VIPs in various official and ceremonial functions.

PROPOSAL

2. We propose to allocate $17.8 million to Director of Marine (D of M) for the procurement of a launch to replace the "Tin Hau".

JUSTIFICATION

3. The "Tin Hau" is a wooden launch 15.5 metres in length. For the past 27 years, it has been used mainly for providing marine transport for VIPs in various official, ceremonial and social functions. In recent years, there has been a substantial demand for her service, in particular, in the organisation of briefings for overseas and local visitors on the development of the port and other infrastructural facilities. However, the deteriorating efficiency and standard of services of the launch could no longer meet the requirements of providing efficient and speedy marine transport for VIPs, and do not help in our efforts in projecting Hong Kong as a fast expanding modern port in the Asia-Pacific region.

4. One of the major inadequacies of the "Tin Hau" is her slow speed. The maximum speed of the launch is 9 knots, much slower than an ordinary cross-harbour ferry which has a speed of 15 knots. The "Tin Hau" is one of the slowest passenger carrying launches in the Government Fleet. The unnecessarily long time required for even a very brief tour of the harbour does not usually fit in with the tight programme of the visitors.

5. The launch is also too small. With a maximum designed capacity of only 24 passengers, the "Tin Hau" is unable to accommodate large groups of visitors in a spacious and comfortable setting. For this reason, D of M has to turn down as many as one-third of the total bookings for the "Tin Hau" in the past 12 months. Furthermore, because of the old-fashioned design of the "Tin Hau", it is often not possible, especially during inclement weather, to bring passengers to the open upper deck to show them the best view of the harbour and related port facilities. This compromises, to a certain extent, the purpose of the harbour tour.

6. Given the heavy traffic in the harbour, the small size and the shape of the vessel’s hull and high superstructure, the "Tin Hau" cannot give passengers a comfortable and steady ride. She rolls heavily, even in moderate seas, making it extremely uncomfortable to those who are prone to sea-sickness.

7. In the past few years, the "Tin Hau" has broken down frequently. This seriously affects the reliability and availability of service. The cost of maintenance has increased substantially from $651,000 in 1993-94 to $1,662,000 in 1995-96.

Alternatives

8. D of M considers that there is no other alternative than to procuring a new launch. There is no comparable launch in the Government Fleet which can provide the same service as the "Tin Hau". At present, when the "Tin Hau" is not available, some branches and departments will make use of the service of the "Mariner", which we converted from a wooden work boat to a ferry type launch with a capacity of 70 passengers. However, since the design of the "Mariner" is for conveyance purpose, the facilities on board are not suitable for social and official functions. In fact, the "Mariner" is also due for disposal in 2000 according to the Marine Department’s Fleet Development Programme.

9. Hiring is not an option because there is only a small and limited market for hire of launch service. Based on past booking records for the "Tin Hau" and the "Mariner", D of M expects to receive around 100 bookings a year for the new launch. It is operationally not practical to rely on hire of service on a regular basis.

The replacement launch

10. The replacement launch will have the following features -

1. length of about 18 metres and maximum speed of not less than 25 knots;
2. large deck areas to accommodate a saloon with the capacity of 40 passengers;
3. a sheltered upper open observation deck;
4. robust construction with adequate stability; and
5. an acceptable degree of comfort to people on board.

11. The proposed timetable for the procurement of the replacement launch is as follows -

FINANCIAL IMPLICATIONS

12. D of M estimates that the replacement launch will cost $17.8 million, made up as follows -

13. The estimated cashflow is as follows -

14. If Members approve the proposal, we shall include the necessary provision in the Estimates.

15. We estimate that there will be savings of about $1.2 million arising from a lower maintenance cost of the new launch in the initial years of her operation. At the same time, since the operation will be highly automated, D of M will be able to reduce the number of staff required from six to four. This will result in further savings of $474,000 in annual staff cost.

16. The proposal will have no impact on fees and charges for services provided by the Marine Department as the "Tin Hau" provides services for government departments only.

Economic Services Branch
November 1996

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