LegCo Paper No. CB(1) 1675/96-97
(These minutes have been seen
by the Administration)
Ref : CB1/PL/TP/1

LegCo Panel on Transport

Minutes of meeting held on Friday, 14 March 1997, at 8:00 am in Conference Room A of the Legislative Council Building

Members present :

    Hon Mrs Miriam LAU Kin-yee, OBE, JP (Chairman)
    Hon Zachary WONG Wai-yin (Deputy Chairman)
    Hon Mrs Selina CHOW, OBE, JP
    Hon Edward S T HO, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon LEE Wing-tat
    Dr Hon Philip WONG Yu-hong
    Hon CHAN Kam-lam
    Hon CHAN Wing-chan
    Hon CHEUNG Hon-chung
    Hon CHOY Kan-pui, JP
    Hon Albert HO Chun-yan
    Hon LAU Chin-shek
    Hon LEE Kai-ming
    Hon NGAN Kam-chuen
    Hon SIN Chung-kai
    Hon TSANG Kin-shing
Members absent :

    Dr Hon Samuel WONG Ping-wai, OBE, FEng, JP
    Dr Hon LAW Cheung-kwok
    Hon Lawrence YUM Sin-ling

Public officers attending :

    For Item III

    Transport Branch

    Mr Gordon SIU, JP,
    Secretary for Transport

    Mr Paul LEUNG, JP,
    Deputy Secretary for Transport (Transport Infrastructure)

    Mr Isaac CHOW,
    Deputy Secretary for Transport (Transport Services)

    Miss Eliza LEE,
    Principal Assistant Secretary for Transport (Transport Services)

    Economic Services Branch

    Mr P C LIM,
    Principal Assistant Secretary for Economic Services

    Ms Rhoda CHAN,
    Senior Treasury Accountant

    Transport Department

    Mrs Dorothy CHAN,
    Commissioner for Transport (Acting)

    Miss Zina WONG,
    Assistant Commissioner for Transport (Ferry & Paratransit)

    Miss LUI Ying,
    Chief Transport Officer

    For Item IV

    Transport Branch

    Mr Gordon SIU, JP,
    Secretary for Transport

    Mr Paul LEUNG, JP,
    Deputy Secretary for Transport (Transport Infrastructure)

    Mr Isaac CHOW,
    Deputy Secretary for Transport (Transport Services)

    Miss Eliza LEE,
    Principal Assistant Secretary for Transport (Transport Services)

    Economic Services Branch

    Mr P C LIM,
    Principal Assistant Secretary for Economic Services

    Ms Rhoda CHAN,
    Senior Treasury Accountant

    Transport Department

    Mrs Dorothy CHAN,
    Commissioner for Transport (Acting)

    Miss Zina WONG,
    Assistant Commissioner for Transport (Ferry & Paratransit)

    Miss LUI Ying,
    Chief Transport Officer

    For Item V

    Transport Branch

    Mr Paul LEUNG, JP,
    Deputy Secretary for Transport (Transport Infrastructure)

    Miss Nancy LAW, JP,
    Deputy Secretary for Transport (Transport Management)

    Mr Isaac CHOW,
    Deputy Secretary for Transport (Transport Services)

    Mr Johnny CHAN,
    Principal Assistant Secretary for Transport (Transport Infrastructure)

    Transport Department

    Mrs Dorothy CHAN,
    Commissioner for Transport (Acting)

    Mrs Judy LI,
    Principal Transport Officer

    Mr Anthony LOO,
    Chief Engineer

    Legal Department

    Mrs N Dissanayake,
    Senior Assistant Law Draftsman

    For Item VI

    Transport Branch

    Mr Paul LEUNG, JP,
    Deputy Secretary for Transport(Transport Infrastructure)

    Miss Nancy LAW, JP,
    Deputy Secretary for Transport (Transport Management)

    Mr Isaac CHOW,
    Deputy Secretary for Transport (Transport Services)

    Transport Department

    Mrs Dorothy CHAN,
    Commissioner for Transport (Acting)

    Mr Alan LUI,
    Assistant Commissioner for Transport/New Territories

    Mr Don HO,
    Principal Transport Officer/New Territories (Acting)

    Royal Hong Kong Police Force

    Mr YIP Kwok-keung, QPM, CPM,
    Regional Commander New Territories South

    Mr C M Keenan,
    Superintendent, Operations Bureau, New Territories South

    Mr AU Hok-lam,
    Operations Marine

    Marine Department

    Mr J S Lambourn,
    Senior Marine officer/Airport and Port Co-ordination Section

    NAPCO

    Mr Peter P T CHEUNG,
    Deputy Director, NAPCO

    Attendance by invitation: For Item III "Star" Ferry Company Limited

    Mr Frankie YICK,
    Director and General Manager

    Mr Wegan CHIANG,
    Administration Manager

    Mr Terence LEUNG,
    Senior Business Officer

    For Item IV

    Hongkong & Yaumati Ferry Company Limited

    Mr David HO,
    Group General Manager

    Miss Aileen C Y NG,
    Planning & Marketing Manager

    Mr Rayman YUEN,
    Assistant General Manager

    Miss Sandra M K NGAI,
    Chief Accountant of HYF

Clerk in attendance :

    Ms Estella CHAN,
    Chief Assistant Secretary (1)4

Staff in attendance :

    Miss Connie FUNG,
    Assistant Legal Adviser 3

    Mr Matthew LOO, Senior Assistant Secretary (1)4 (Acting)

I.Items for discussion for the next meeting scheduled for 11 April 1997

(List of outstanding items for discussion)

The Chairman advised members that Sir Wilfrid Newton, ex-chairman of the Mass Transit Railway Corporation and the London Regional Transport, was unable to attend the meeting due to unforeseen circumstances. The agenda item "Mass transit railways - success or failure" was therefore postponed to a special meeting to be held on Wednesday, 19 March 1997, at 10:30 am.

2. The Panel agreed to discuss the feasibility study of inter-district bus-only lanes and traffic arrangements following the opening of Western Harbour Crossing (WHC) and Lantau Link at the next meeting on 11 April 1997. They also agreed to include the following subjects in the list of outstanding items for discussion:

  1. renewal of China Motor Bus Company Limited’s franchise (district boards and other interested parties should be invited); and

  2. compatibility of the existing autotoll systems.

II.Information papers issued since last meeting

3. Members noted that no information paper had been issued since last meeting.

III."Star" Ferry Co. Ltd.’s fare increase application

(Paper No. CB(1) 1051/96-97(01) provided by the Administration

Paper No. CB(1) 1051/96-97(02) provided by the "Star" Ferry Co. Ltd.)

4. At the Chairman’s invitation, Mr Frankie YICK said that the "Star" Ferry Co. Ltd. (SF) had introduced a series of service improvements to reinforce the safety measures at piers and on board ferries since the last fare adjustment in March 1996. Other projects such as the installation of tele-eye monitoring system and AC generator re-engineering were still in progress. He also advised that the Transport Advisory Committee (TAC) received the fewest number of complaints against SF in comparison with other public transport operators in 1996, and this could not have been achieved without sufficient financial resources for service improvements.

5. On the general business situation, Mr YICK pointed out that the increases in operating costs in the past few years, excluding the additional financial burden due to the Administration’s request for pier maintenance, had basically been in line with inflation. However, the growth in non-fare related income including shop rentals and advertising was unable to catch up with the inflation rate. Due to the low fare base and stagnant patronage forecast following the opening of WHC, there would be a significant loss for SF in 1997 if the fares stayed at the existing level. SF’s proposed fare increase averaging 44.1% would only bring a 7% return on turnover in 1997. With the Administration’s policy of pier maintenance cost reimbursement in place, SF could only reluctantly accept the Administration’s recommended level of fare increase of 7.52%, which would only yield a return of about 2% on turnover. In conclusion, Mr YICK urged the Administration to devise a long term solution for ferry service development by examining the suppressed fare level structure of SF.

6. Members noted the low return on turnover for SF with the Administration’s recommended fare increase and enquired if SF would accept this level of return in the long run, assuming that the Administration would continue to contribute to the cost of maintaining the structure of ferry piers. Mr YICK responded that a return of 2% on turnover was unreasonable in comparison with those for other public transport operators in Hong Kong. In fact, the return of 7% on turnover based on the originally proposed fare increase was barely acceptable.

7. In response to members’ concern about the large increase in operating costs of around 50% over the past few years, Mr YICK said that the increase was basically in line with inflation. Of the total operating costs of $100 million in 1996, around $60 million was staff costs, $30 million ongoing repairs and maintenance costs, and the remainder was for such overhead expenses as auditing and insurance. Costs of improvement works such as AC generator re-engineering was counted as expenses under depreciation and funded by SF. Ongoing maintenance work had been contracted-out in accordance with the SF’s tendering procedures as this was considered a cost-effective arrangement.

8. On the impact to the salary adjustment in view of the suppressed fare increase, Mr YICK advised that the salary review of SF’s staff was independent of the fare increase. The salary increase in 1996 was 8%. SF subsequently had to top up the increase by 3% in order to keep up with the salary level of other public transport operators. This additional salary adjustment was funded by shareholders of SF and was not included in the operating expenditure presented to the Government in the 1996 fare increase application. The rate of salary increase in 1997 was around 6% and was consistent with the level generally adopted in Hong Kong.

9. Apart from rendering financial assistance to ferry operators to maintain the structure of ferry piers, some members enquired if the Administration would explore other means of subsidies, or consider operating the two companies as government-owned utilities. In response, the Secretary for Transport (S for T) emphasized that the Administration had no plan to provide any direct or indirect subsidies to the two operators but it was ready to assist in improving services in view of the changing operating environment. He advised that if there were major changes in the working relationship between the Administration and ferry operators upon expiry of their franchises, the Panel would be consulted on the details.

10. As regards the large discrepancy between the costs of pier maintenance for SF and the Hongkong & Yaumati Ferry Co. Ltd. (HYF), the Assistant Commissioner for Transport (Ferry & Paratransit) (AC for T(F&P)) explained that the figures for HYF set out in the information paper were only preliminary estimates as the Administration was still scrutinizing HYF’s application for re-imbursement. Nevertheless, a higher maintenance fee for SF was expected due to its older pier facilities.

11. On the reason for proposing a high level of fare increase of 44.1%, Mr YICK admitted that it was due to the over-optimistic patronage forecast in the past. In 1995, SF commissioned a consultancy study to adjust the forecast and the current application for fare increase was based on a more realistic estimate on patronage. A second consultancy study would commence by the end of 1997 to update the patronage forecast for SF. Furthermore, the Administration had requested SF to conduct additional pier maintenance since 1993 and these expenses were only reflected in the current application.

12. Regarding the patronage forecast for SF’s services following the opening of WHC, AC for T(F&P) explained that patronage for the Central - Tsim Sha Tsui service was expected to decrease by 1% when five new cross harbour bus routes were brought into service. The daily patronage of the Central - Hung Hom service was around 9,000 and no significant change was expected. The patronage of the Wan Chai - Tsim Sha Tsui service would however grow steadily upon completion of more office buildings in north Wan Chai. Mr YICK supplemented that the patronage of the Wan Chai - Tsim Sha Tsui service had increased by 3% after completion of the Convention Centre. Further increases were expected upon the opening of the Convention Centre extension.

13. S for T noted a member’s suggestion for provision of shuttle services between piers and public housing estates and commercial centres so as to encourage the use of ferry services. He said that members’ views on development of ferry services would be taken into account in the future.

14. In response to the Chairman, the Principal Assistant Secretary for Transport (Transport Services) advised that the relevant new fare orders would be tabled at Legislative Council in late April 1997 with a view to implementation in June 1997.

IV.Hongkong & Yaumati Ferry Co. Ltd.’s fare increase application

(Paper No. CB(1) 1051/96-97(03) provided by the Administration

Paper No. CB(1) 1051/96-97(04) provided by Hongkong & Yaumati Ferry Co. Ltd.)

15. Mr David HO briefed the Panel on the rationale for the fare increase application. He advised that the patronage of HYF was expected to decrease due to the relocation of piers and competition with other public transport operators. The accumulated increase of more than 20% in fuel price in 1996 had also created pressure on operation costs. HYF had therefore sought a fare increase to cover the additional operating costs and to secure sufficient resources for service improvements. The proposed fare increase of 8.1% was in line with inflation.

16. In response to members’ concern about the progress of HYF’s pier development package which had been deferred for more than one year, S for T advised that the Administration was working with HYF on details of the agreement and it was hoped that a formal agreement could be reached by the end of 1997. The Deputy Secretary for Transport (Transport Services) (DS for T(TS)) supplemented that drafting of one of the legal documents, the tripartite agreement on the detailed terms of the pier development package, had been completed and had been forwarded to HYF for consideration in October 1996.

17.As regards the cost of pier maintenance, Mr HO advised that HYF was of the view that the cost of maintaining the structure and large-scale maintenance of ferry piers should be taken up by the Administration. HYF’s application for re-imbursement of the cost was still being scrutinized by the Administration and the total amount of re-imbursement had yet to be confirmed. AC for T(F&P) added that such maintenance costs had already been excluded when considering the current fare increase application. In response to a member’s question on the operating expenses which accounted for 13% of HYF’s total operating costs for 1996, Mr HO advised that the expenditure was mainly on insurance and staff benefits and agreed to provide a breakdown of these expenses for members’ reference. HYF

(Posting-meeting note: The requisite information provided by HYF was circulated to members vide LegCo Paper No. CB(1) 1331/96-97 dated 18 April 1997.)

18. On service improvements, AC for T(F&P) said that these had been implemented by HYF as promised in the last application for fare increase. These included operating additional trips for the outlying districts service, promoting courtesy and discipline among staff, cleaning the hull of vessels more frequently to reduce water resistance, and facilitating more efficient loading and unloading of cargo. The Administration had also conducted surveys on HYF’s performance in 1996 and noted that 95% of the ferries were operated on schedule. DS for T(TS) added that HYF had already funded the purchase of a catamaran and put it in full operation in February 1995 even before execution of the Private Treaty Grant for the pier development. As regards future service improvements mentioned in the information paper, AC for T(F&P) advised that once the agreement on pier development was finalized, HYF would take six to eight months to purchase an additional catamaran for the Tuen Mun - Central service. A longer period of around 12 to 14 months would be required for replacing the old vessels by new triple-deck vessels for the outlying districts service. Mr HO assured that HYF would expedite negotiation with the Administration on pier development and implement the above service improvements without delay.

19.A member enquired about the large number of complaints lodged with TAC in 1996 against HYF. Mr HO advised that most complaints were related to prolonged journey times due mainly to reclamation and other projects in the harbour. Other complaints were related to loading of cargo on outlying districts service and HYF had already taken steps to improve the arrangement. For ease of comparison, he pointed out that there were only 19 complaints against the services of the six inner harbour routes operated by HYF for the period from January 1996 to February 1997. This was in line with the number of complaints received by the other ferry franchisee in relation to its inner harbour routes. On the other hand, appreciation letters had been received and published in the HYF’s Newsletters which had been circulated to members for reference. Furthermore, HYF regularly conducted Passenger Liaison Group meetings and Meet-the-Passenger sessions to enhance communication between passengers and the HYF management. Representatives of district boards had also been invited to these meetings. As regards complaints against the irritating smell emitted from engine rooms on the lower decks of vessels, Mr HO advised that the situation had improved after alteration of the open design of the engine room. However, members were welcome to refer any complaints to HYF for follow-up. He also undertook to provide for members’ reference a comparison of the frequency of breakdowns and average journey times of different types of ferry vessels before and after the recent congestion resulted from projects in the harbour. HYF

(Posting-meeting note: The requisite information provided by HYF was circulated to members vide LegCo Paper No. CB(1) 1331/96-97.)

20. In response to a member’s comment that the fare increase of 9.6% for monthly tickets on outlying district services was too high, Mr HO said that the proposed increase could still offer a 30% discount for monthly ticket holders. This level of discount was similar to that adopted in the past and it was inadvisable to give further discounts as it would be unfair to other passengers. As regards the reason for the unavailability of monthly tickets for the Tuen Mun route, Mr HO explained that due to special traffic conditions in Tuen Mun, monthly tickets were not preferred by residents. Nevertheless, residents might choose to use the Smart Card the system of which was expected to operate in September 1997.

21.S for T advised that there would be a change in the flow of traffic and transport need in Hong Kong following the completion of such transport infrastructures as WHC and Route 3. He acknowledged the need to keep under review, inter alia, the future role of waterborne transport in Hong Kong. Members responded that the Administration should actively consider such new measures as adjusting ferry routes to cope with the changing operating environment for ferry operators with a view to relieving traffic congestion in Hong Kong. They agreed that the issue of the policy on long term development of ferry services should be put on the list of outstanding items for discussion. Clerk

22. In response to a member’s enquiry about vehicular ferry service, Mr HO advised that the North Point - Kowloon City service still carried 1,800 to 2,000 vehicles daily. A special ferry service between North Point and Kwun Tong was still operating for dangerous goods vehicles which were restricted from using the cross harbour tunnels. AC for T(F&P) added that following the opening of WHC, there would be four choices for motorists to cross the harbour and the North Point - Kowloon City service could be cancelled after consultation with the district boards.

V.Discovery Bay Tunnel Link Bill

(LegCo Brief Ref. TRAN 4/02/43 (96) Pt. 9

LegCo Paper No. CB(1) 719/96-97 submitted by the Discovery Bay City Owners Committee)

23. The Chairman advised that the first meeting of the Bills Committee on Discovery Bay Tunnel Link Bill would be held on 21 March 1997 to elect a chairman. On behalf of the Discovery Bay City Owners Committee, Mr CHAN Kam-lam submitted about 3,000 signatures from residents of Discovery Bay in support of early enactment of the Bill.

24. Members generally agreed to early enactment of the Bill as they considered that the tunnel would help the development of Lantau Island. Nevertheless, they queried the reason for a royalty to be paid to the Administration as the tunnel was constructed and maintained entirely at the expense of the Hong Kong Resort Company Limited (HKR). They also had reservations about the provisions of the disclaimer clauses for the Administration in the Bill. In response, the Deputy Secretary for Transport (Transport Infrastructure) (DS for T(TI)) advised that in accordance with current practice, the Administration would charge HKR a premium for granting the wayleave and provide for the recovery of any costs incurred by the Administration in monitoring the operation and maintenance of the tunnel. Although HKR did not expect to recover the capital costs of the project, they nevertheless would seek to recover the operation and maintenance costs through tolls. Under this arrangement, the tunnel company would be operating a franchised business. Hence, a royalty arrangement similar to that of the Tate’s Cairn Tunnel was proposed. He also pointed out that the royalty was only 2.5% of the gross operating receipts and would have insignificant impact on the toll level of the tunnel. As regards the disclaimer clause 9(6), he advised that the Administration was prepared to revise this provision if warranted. Some members were not convinced of the Administration’s response regarding the royalty arrangement, which was considered unfair to HKR and the residents of Discovery Bay, particularly in view of the plan for the installation of public utilities in the tunnel.

25. In response to members’ enquiry about the estimated traffic flow in the tunnel, the Chief Engineer advised that there would be around 240 and 190 passenger car units per peak hour travelling via the Lantau Link to and from the Discovery Bay Tunnel respectively, with tunnel usage restricted to residential coaches and service vehicles only. A member questioned the Administration’s policy on assessing applications from property developers to construct tunnels for exclusive use, and suggested that this subject should be studied carefully by the Bills Committee.

VI.Traffic arrangements for the fireworks at Tsing Ma Bridge on 27 April 1997

(Paper No. CB(1) 1051/96-97(05) provided by the Administration)

26. At the Chairman’s invitation, the Deputy Director of the New Airport Projects Co-ordination Office (DD) advised that the fireworks display at the Lantau Link was one of the programmes in the opening ceremony to mark the completion of the Airport Core Programme transport network. The major concern of the Administration was to ensure public safety and minimize inconvenience to local residents in planning the display. On the details of the arrangement, the Superintendent of New Territories South Operations Bureau advised that pedestrianization of the section of Castle Peak Road between Hoi On Road and Siu Lam Interchange was the only practical solution in view of the potential hazards that might result if large number of spectators gathered in Castle Peak Road. In addition, past experience showed that when fireworks display was about to take place, most drivers would slow down or even stop their vehicles to watch the display. To avoid this potential hazard, vehicular movements in Tuen Mun Road would be regulated from 7:30 to 8:20 p.m. Furthermore, the Administration had also arranged for major public transport operators such as buses, Mass Transit Railway (MTR) and Light Rail Transit to provide additional services to expedite dispersal of crowds after the event.

27. Members were concerned about the large number of people who might be stranded along Castle Peak Road after the display. Some members recommended changing the venue to Victoria Harbour, or replacing the fireworks display with other performances on the Tsing Ma Bridge. They also suggested that the display could take place after midnight to avoid inconvenience to Tuen Mun residents. Another suggestion was to hold the opening ceremony at the Lantau Link in daylight and stage the fireworks display in Victoria Harbour after dark. A member opined that the area reserved in Tsing Yi for the guests should be opened to the public.

28. In response, DD said that the fireworks display was an important part of the ceremony and should take place at the Lantau Link in order to have the desirable effect. In response to an enquiry, he clarified that the waterfall fireworks would be staged under the Tsing Ma Bridge and both the guests in Tsing Yi and the public could enjoy this display. Furthermore, there would be live television coverage of the display, followed by a live variety show; it was hoped that most people would stay home and still enjoy the show. He also advised that the venue in Tsing Yi reserved for guests was not a suitable site for the public to enjoy the display as the traffic facilities in Tsing Yi were inadequate to cope with such a large crowd. DS for T added that the fireworks display of the opening ceremony would give the public a unique opportunity to share Hong Kong’s joy in the completion of the Lantau Link which had become a new landmark of Hong Kong. He also remarked that reasonable special arrangements would be made for the guests to view the fireworks.

29. The Regional Commander (New Territories South) advised that the Administration had learned from the experience of crowd control in the recent Gold Coast fireworks display. As around 300,000 people had estimated to come to view the Lantau Link fireworks display, more than 4,000 police officers could be deployed, if necessary, to exercise crowd control. For the dispersal arrangement, three pick-up points had been identified along Castle Peak Road where spectators could board buses for Tsuen Wan and Tuen Mun, and around 50,000 people would be so dispersed in the first two hours after the display. Spectators could also try a two-hour walk from Castle Peak Road to the Tsuen Wan MTR station. He pointed out that it was not possible to find more pick-up points due to the geographical constraints along Castle Peak Road.

30. Members were concerned that the traffic in Western Kowloon and the New Territories might be paralyzed by the road closures due to the display. Some members expressed concern about the inconvenience caused to Tuen Mun residents by the road closures and the ensuing traffic congestion. In response, DD advised that the Administration had already taken into consideration public concerns in this regard and the relevant district boards had been consulted on the arrangement. The ceremony would be held on a Sunday as traffic flow would only be around two-third of that on a weekday. He clarified that one lane on each side of Tuen Mun Road between Tai Lam and Hoi On Road would be designated as bus-only lanes from 4 p.m. onwards to facilitate movement of buses to and from pick-up points in Castle Peak Road. The police would only regulate traffic on Tuen Mun Road from 7:30 p.m. onwards and road closure might not be necessary unless there were motorists who either slowed down or even stopped their vehicles to watch the display. The Assistant Commissioner for Transport/New Territories advised that vehicles would need to queue for 40 to 70 minutes if Tuen Mun Road were closed.

31. Members were not satisfied with the proposed arrangement and commented that the event was held for the enjoyment of only a small group of people. They requested the Administration to reconsider the crowd control and traffic arrangements and advise members on the details as soon as possible. Some members also advocated cancellation of the event in the interest of the public. In response to members’ concerns, the Administration undertook to provide further information to identify popular viewing spots along Castle Peak Road, and for each spot, to estimate the size of the crowd and propose detailed arrangements for dispersing the crowd safely and expeditiously in emergencies and after the fireworks. Admin

(Post-meeting note: Additional information on public transportation and crowd control arrangement provided by the Administration had been circulated to members vide LegCo Paper No. CB(1) 1184/96-97 dated 3 April 1997.)

VII.Any other business

32. There being no other business, the meeting ended at 11:00 a.m.

Legislative Council Secretariat

23 May 1997

Last Updated on 22 August 1998