LegCo Paper No. CB(1)1228/96-97
(These minutes have been seen
by the Administration)
Ref : CB1/PL/TP/1
- Item IV
Mr Gordon SIU, JP
- Secretary for Transport
- Mrs Lily YAM, JP
- Commissioner for Transport
- 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 K C LAU
- Principal Assistant Secretary for Transport (Transport Services)
- Miss Zina WONG
- Assistant Commissioner for Transport (Ferry & Paratransit)
- Dr Ernest LEE, JP
- Assistant Commissioner for Transport (Management & Licensing)
- Miss Regina YEUNG
- Chief Transport Officer
- Mr Eric Crowter
- Chief Superintendent of Police
- Item V
- Mr Gordon SIU, JP
- Secretary for Transport
- Mrs Lily YAM, JP
- Commissioner for Transport
- 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 K C LAU
- Principal Assistant Secretary for Transport (Transport Services)
- Mr Allan CHOW
- Principal Assistant Secretary for Transport (Transport Management)
- Miss Victoria TANG
- Principal Assistant Secretary for the Treasury (Investments)
- Miss Zina WONG
- Assistant Commissioner for Transport (Ferry & Paratransit)
- Dr Ernest LEE, JP
- Assistant Commissioner for Transport (Management & Licensing)
- Miss Regina YEUNG
- Chief Transport Officer
- For Item VI
- Mrs Lily YAM, JP
- Commissioner for Transport
- 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 K C LAU
- Principal Assistant Secretary for Transport (Transport Services)
- Miss Zina WONG
- Assistant Commissioner for Transport (Ferry & Paratransit)
- Miss Regina YEUNG
- Chief Transport Officer (Management & Licensing)
- For Item VII
- Mrs Lily YAM, JP
- Commissioner for Transport
- 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 K C LAU
- Principal Assistant Secretary for Transport (Transport Services)
- Miss Zina WONG
- Assistant Commissioner for Transport (Ferry & Paratransit)
- Mr Albert YUEN
- Chief Transport Officer
Attendance by Invitation :
- Item V
- BZW Asia Limited
- Mr Stephen Philips
- Director
- Mr Robert Montanari
- Senior Manager, Corporate & Project Finance
Clerk in attendance:
- Ms Estella CHAN
- Chief Assistant Secretary (1)4
Staff in attendance :
- Mr Matthew LOO
- Senior Assistant Secretary (1)4 (Acting)
I Confirmation of minutes of previous meeting and matters arising
(LegCo Paper No. CB(1) 809/96-97
LegCo Paper No. CB(1) 819/96-97)
The minutes of the meetings held on 13 and 17 December 1996 were confirmed.
2. The Chairman reported that a study tour comprising four members had visited London, Paris, Hamburg and Singapore from 8 to 18 February 1997. Despite the tight schedule, the delegation had gained an insight into and first-hand information on the operation and monitoring of public transport systems in overseas metropolitan cities. The findings of the study tour would be detailed in a formal report to be considered in a closed session.
3. At the Chairmans invitation, Hon Albert CHAN Wai-yip, Chairman of the Subcommittee on Tsing Ma Control Area, reported that the Subcommittee had met with the Administration on 3 February 1997 to examine staffing proposals for the Government Monitoring Team (GMT) in the Tsing Ma Control Area (TMCA). Although the Subcommittee was not fully convinced that GMT would take up responsibilities other than the monitoring of the performance of the Operator of the TMCA, the Subcommittee had agreed with the proposed establishment in order to meet the schedule for the opening of TMCA. The Subcommittee had nevertheless advised that the Administration should review the staffing complement within two years and whenever the situation warranted. The Administration had undertaken to comply with the request.
II Date of next meeting and items for discussion
(List of outstanding items for discussion)
4. The Chairman drew members attention to the agenda for the next meeting on 14 March 1997 as set out in the list of outstanding items for discussion. After deliberations, members agreed to group the agenda items of similar nature for discussion in view of the large number of outstanding items. They suggested including for discussion at the next meeting traffic arrangements following the opening of the Western Harbour Crossing and the Lantau Link. The Panel also agreed to include the following in the list of outstanding items for discussion:
- the Discovery Bay Tunnel Link Bill; and
- Tates Cairn Tunnel Co. Ltd.s financial restructuring and plans to improve air quality following the toll increase in November 1996.
(Post-meeting note: On the instruction of the Chairman, item (a) was subsequently included in the agenda for the meeting on 14 March 1997.)
III Information papers issued since last meeting
(Nil)
5. No information paper had been issued since last meeting.
IV Follow-up to taxi fare receipt
Paper No. CB(1) 882/96-97(01) extract of minutes of meeting held on 17 December 1996
Paper No. CB(1) 882/96-97(02) provided by the Administration in December 1996
Paper No. CB(1) 882/96-97(03) provided by the Administration in February 1997)
6. At the Chairmans invitation, the Principal Assistant Secretary for Transport (Transport Services) (PAS for T(TS)) advised that two sets of amendment regulations would be made in March 1997 for implementation of the scheme. A twelve-month transitional period starting from the designated commencement date in June 1997 would be given to the trade during which all taxis would be required to be equipped with fare receipt printers before annual vehicle examination at the Transport Department (TD). If a taxi examined by TD during the first three months of the commencement date was found to be not fitted with a receipt printing device, a grace period would be given to the taxi operator sufficient time to comply with the new requirement.
7 On whether the Administration could ensure that printing devices which were out of order would be repaired as soon as possible, PAS for T (TS) and the Assistant Commissioner for Transport (Ferry & Paratransit) (AC for T (F&P)) responded that in principle the Administration would like to specify a period within which a printer which was out of order should be repaired. However, it would be very difficult to enforce such a requirement and the taxi trade should exercise self-discipline. In any case, the printing devices would be checked by TD every six months. Furthermore, taxi drivers would need to issue hand-written receipts under such circumstances. Feedback from the trade and the experience in China had shown that hand-written receipts were not welcomed by taxi drivers as these would cause delays. The obligation to issue a hand-written receipt if the printer was out of order would deter operators from leaving the printer in a state of disrepair. The Secretary for Transport (S for T) supplemented that the public could still make use of existing channels to lodge their complaints but the scheme would have to rely on the self-discipline of the trade. Nevertheless, he agreed with members that it would be useful, if practicable, to include the mileage in the pre-printed form for hand-written receipts, and undertook to pursue this suggestion in consultation with the trade.
8. AC for T (F&P) advised that three different formats of receipts had been proposed to fit the types of printing devices used by taxi operators. She advised that some devices could print out receipts at a faster speed but higher capital cost would be incurred, while the slower printers were less expensive although explanatory notes would need to be included in pre-printed receipt forms. The Administration would leave the choices to the trade. C for T further advised that the printing time for different devices would range from eight to 12 seconds. The Administration had taken into account the affordability of printers and possible traffic delays caused by receipt printing when adopting 12 seconds as the maximum printing time. Hon CHAN Kam-lam advised that the taxi trade had raised concerns about the extra expenditure incurred in installing printing devices. AC for T (F&P) said in response that the trade had been widely consulted on the scheme but she was ready to discuss further with the trade if necessary.
V Tolls for Lantau Link
(Paper No. CB(1) 882/96-97(04) provided by the Administration)
9. The Assistant Commissioner for Transport (Management & Licensing) (AC for T (M&L)) advised the Panel at the Chairmans invitation that the Administration would adopt a one-way toll collection arrangement for the Lantau Link. This arrangement would be convenient for motorists and improve traffic flow in the airport bound direction. Two-way toll collection could be re-instated when an alternative route linking the new Airport to Kowloon and the New Territories became available. Differential tolls would be imposed to reflect the degrees of road usage and wear and tear caused by different types of vehicles. Higher toll for private cars would help to encourage the use of public transport. The toll levels of the Lantau Link and the Western Harbour Crossing (WHC) were comparable and the former would levy lower tolls for goods vehicles. A further class of "articulated vehicles" had been introduced to replace charging tolls on the basis of number of axles. These arrangements had taken into account public acceptability, and should be welcomed by the freight transport industry. Similar to other Government utilities, tolls would be imposed on the Lantau Link based on the "user-pays" principle and the target rate of return would be 12% on Average Net Fixed Assets (ANFA). In addition, AC for T (M&L) advised that an additional taxi toll of $60 was proposed for the Lantau Link, irrespective of the direction of travel, to promote the supply of taxis at the new Airport. This arrangement would be widely publicized to avoid misunderstandings and disputes between taxi drivers and passengers.
10. Members enquired if it was justified to impose comparatively lower tolls for the Lantau Link for goods vehicles which occupied relatively more space and caused a higher degree of wear and tear to the road surface. In response, the Deputy Secretary for Transport (Transport Management) (DS for T(TM)) explained that this special concession for the freight transport industry was made as the Lantau Link was the only route linking the new Airport to Kowloon and the New Territories. She pointed out that toll levels for the Lantau Link and WHC were more or less the same, while the total construction cost and total length of the former were three times and 15 km longer than the latter respectively. The Administration had already adopted a restrained approach in proposing the opening tolls for the Lantau Link. She also advised that the toll schedule would be subject to negative vetting by LegCo. AC for T (M&L) supplemented that the above arrangement had not contradicted the principle of higher toll relativity for goods vehicles as set out in the Administrations information paper. In response to a members suggestion for lowering the tolls in view of profits to be generated from the opening of the new Airport and property development along the Lantau Link, S for T advised that a high operating cost would be incurred for the maintenance of and for contingency arrangement for this only access to the new Airport. Furthermore, other means of public transport such as buses and the Airport Railway would also be available.
11. Some members did not agree with the Administrations financial target of an average rate of return on ANFA on the basis of a 20 year period. They also enquired about the estimated toll levels if the period was lengthened to a longer period such as 50 years. In response, Mr Robert Montanari of BZW Asia Limited advised that explicit assumptions might not be available for a longer period, that the further forward forecasts are made the less reliable they became, as this would diminish the accuracy of the forecast. He explained that the estimate on the rate of return on ANFA adopted by the Administration would become distorted as the assets are depreciated as there would still be an increase in the rate of return even if there was no increase in profit. This distortion in the return calculation would be magnified if a longer period of estimate was adopted. In order to strike a balance between accuracy of the assumptions and distortion of the forecast, a period of 20 years was considered reasonable. A 20 year forecast period is commonly adopted in the financial market. This period also applied to such public utilities as the Airport Railway as well as other similar projects overseas. An even shorter period could be used if the net assets for a project were replaced more frequently. He also said that a longer period would certainly help to lower the opening tolls, but it would also result in an unreasonably low return on the investment made. DS for T(TM) also affirmed that the rate of return was based on the $21 billion capital cost of the Tsing Ma Control Area (TMCA) rather than on the $7.1 billion for Tsing Ma Bridge only.
12. In response to members who referred to the Route 3 (Country Park Section) (CPS) where the rate of return was based on an operation period of 30 years, Mr Montanari advised that it was inappropriate to make a direct comparison between CPS and the Lantau Link as these were basically different projects in terms of sizes, ownership and management. The former was developed under a Build, Operate and Transfer (BOT) contract with a 30-year franchise. There was no alternative other than the 30-year period in the return calculation because CPS would have to be transferred to the Administration upon expiry of the franchise for a nil consideration; the Lantau Link on the other hand would be fully owned by the Government from its opening. In addition, the rate of return for CPS was based on an Internal Rate of Return (IRR) which was a different financial measurement tool from the rate of return on ANFA adopted for the Lantau Link. He also clarified that for the Lantau Link, its return on ANFA was based on 20 years of operation but IRR was estimated for its whole economic life, which was around 100 as suggested by the engineering consultants. It was inappropriate to look at IRR of the Lantau Link based on the operation period of 20 years as the value would be understated as it would ignore the return contribution of the remaining 80 years. He also advised there were negative returns on ANFA for the first few years of operation based on the proposed toll levels, and the nominal target return could only be achieved by averaging the values over 20 years.
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13. Members were not satisfied with the above responses and disagreed with the operation of the Lantau Link in a commercial manner. In particular, they pointed out that the rate of return of BOT tunnels was only based on the capital costs and use of most highways and access roads were free. They were therefore unconvinced that the return calculation for the Lantau Link should include the capital cost of the whole TMCA. To follow on this subject, members decided to hold a special meeting on 3 March 1997 at 8:30 a.m. to continue deliberation. Meanwhile, the Administration undertook to provide a further paper on the following: |
- detailed financial calculations for TMCA project and the proposed toll schedule;
- a comparison of the financial calculations, in particular the toll levels, IRR and return on ANFA, based on operation periods of 20, 30, 40 and 50 years respectively;
- the justifications for the Administration to base the financial calculations on the capital cost of the entire TMCA rather than on that of the Tsing Ma Bridge alone;
- when the decision for setting the toll levels with the aim to recover the cost of the Lantau Link was made;
- a breakdown of the TMCA capital costs; and
- the traffic flow forecasts of TMCA in relation to the proposed toll schedule.
VI Lantau Taxi Boundary
(Paper No. CB(1) 882/96-97(05) provided by the Administration)
14. Members generally supported Option C set out in the information paper for extending the operating areas for Lantau taxis but enquired if arrangements had been made for Lantau taxis to transfer residents in Lantau Island to the Princess Margaret Hospital for emergency cases. In response, AC for T (F&P) advised that there were adequate provisions of ambulances and helicopters for transferring Lantau residents to hospitals for emergency treatments. They might also make use of medical services available in the Tung Chung Clinic. Notwithstanding this, the Administration had been considering members suggestion and reference would be made to arrangements in Tuen Mun prior to the opening of the Tuen Mun Hospital. She advised that the details would be available before the opening of the Lantau Link. C for T added that the Administration would closely monitor the situation to assess the need for issuing additional Lantau taxi licences.
15. Members urged for improvements in the Tung Chung Road in view of the extension of the operating area for Lantau taxis. In response, AC for T (F&P) advised that a feasibility study had been commissioned for improvements such as road widening for Tung Chung Road in order to open up the road also to buses and other long vehicles.
VII Public Light Bus Policy Review
(LegCo Paper No. CB(1) 817/96-97 issued)
16. At the Chairmans invitation, PAS for T (TS) summarized the conclusions and recommendations of the draft final report prepared by the Transport Advisory Committee (TAC) Working Group on the public light bus policy review. In essence, the Working Group reaffirmed the containment policy for public light buses (PLB) and PLBs would remain as a supplement to the mass carriers; there was no need to change the number of PLB licences and their seating capacity. While Red Minibuses (RMB) should continue to operate with flexibility, more emphasis should be given to the management capability and the ability to improve services for Green Minibuses (GMB) in the selection of operators. The Working Group also recommended annual adjustment of the GMB maximum fare scale and a fare charge of up to 50% above the maximum fare if operators had introduced significant service improvement. In addition, a performance assessment system would be set up for improving GMB services.
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17. Members were not convinced of the reasons set out in the report for preserving the seating capacity of PLBs. Hon Zachary WONG Wai-yin suggested increasing the seating capacity of GMB to encourage the conversion of RMBs to GMBs. In response, AC for T (F&P) advised that this would cause operational problems as PLBs would take a longer time to fill up, especially during non-peak hours, and the vehicles would spend more time on the road waiting for passengers. This would cause traffic congestion, increase competition for limited space at PLB stands and result in much longer waiting time for passengers. She advised that the Administration had to maintain a balanced network of public transport services by encouraging the use of such mass carriers as buses and allowing other modes such as PLBs to provide supplementary services. The increase in PLB seating capacity in 1989 had not only affected the patronage of buses but also other modes of transport; both franchised and non-franchised bus operators had objected strongly to the proposal for increasing PLB seating capacity and operators of NT taxis had expressed concern. She also advised that the number of PLBs was frozen at 4,350. The proposed differential treatment of increasing the seating capacity for GMBs would slow down the conversion of RMBs to GMBs. It would not be acceptable to the RMB trade. In response to members suggestion for increasing GMB overnight services in public housing estates so as to encourage the conversion process, AC for T (F&P) advised that the Administration had already approved such services run by both bus and GMB operators. She undertook to provide more information on these overnight transport services for members reference. |
18. Members noted that some franchised bus operators had used 24 seater buses for some routes. They were concerned if this arrangement would upset the balance of the different modes of transport services. In response, AC for T (F&P) explained that these buses were restricted to such routes as Rennies Mill and Yau Yat Tsuen due to special geographical constraints. Nevertheless, these buses would be phased out. She also advised that vehicles with more than 16 seats were statutorily classified as buses. As regards the suggestion of allowing RMBs to use bus-only lanes, AC for T (F&P) advised that it would depend on the capacity of the bus-only lane and priority would be given to such vehicles as nanny vans and school buses which had higher seating capacity.
19. Of the complaints against GMBs, members noted that 40% of such cases were against conduct and performance of staff and asked if measures had been derived to improve service performance of the trade. AC for T (F&P) responded that TD would issue verbal or written warnings to GMB operators if their performances were unsatisfactory. Penalties such as suspending the passenger service licences of GMB vehicles would be imposed if complaints were substantiated. The Administration would introduce a scheme to roll forward the Passenger Service Licences (PSL) for GMB operators to encourage them to keep up performance and upgrade services. Under this scheme, GMB operators would be issued with PSLs for three years and they would be subject to a mid-term performance appraisal. PSLs would be rolled forward for another three years if the operators made achievements on service improvement. In addition, the result of the appraisal would also be one of the factors the Administration would consider in processing fare increase applications. As regards the fare policy for GMBs, C for T and AC for T (F&P) advised that GMBs fares were determined by TD based on the GMB maximum fare scale which was reviewed regularly by TAC. Fare revisions were monitored by the regional offices of TD and due consideration would be given to the balance among different modes of public transport. The average rates of increases in the past few years were in line with inflation. They also advised that PSLs would be issued for operating a package of routes; the profits for some routes would be used to cover the deficits of others. The Deputy Secretary for Transport (Transport Services) further explained that it was Governments policy not to subsidize public transport services, and it was therefore essential for the operators to obtain a reasonable return on their investment so as to provide them with an incentive to improve and upgrade their services. He noted members proposals of allowing local bodies such as District Boards to control fare increase and of putting the operation of GMB routes to open tender.
VIII Any other business
(10:30 am onwards)
20. Members noted that bids for funds for overseas duty visits for the months of April, May and June 1997 should be submitted to the Legislative Council Commission in March 1997. No proposal was made for overseas duty visits for the above period.
21. There being no other business, the meeting ended at 10:40 a.m.
Legislative Council Secretariat
9 April 1997
Last Updated on 22 August 1998
