LegCo Paper No. CB(1) 1676/96-97
(These minutes have been seen by the Administration)
Ref : PL/TRA/PS

LegCo Panel on Transport
Subcommittee on Western Corridor Railway

Minutes of Meeting
held on Friday, 25 April 1997, at 8:30 am
in Conference Room A of the Legislative Council Building

Members present :

    Hon Mrs Miriam LAU Kin-yee, OBE, JP (Chairman)
    Hon Mrs Selina CHOW, OBE, JP
    Dr Hon Samuel WONG Ping-wai, OBE, Feng, JP
    Dr Hon Philip WONG Yu-hong
    Hon Zachary WONG Wai-yin
    Hon CHAN Kam-lam
    Hon CHAN Wing-chan
    Dr Hon LAW Cheung-kwok
    Hon LEE Kai-ming
    Hon NGAN Kam-chuen
    Hon TSANG Kin-shing

Members absent :

    Hon Edward S T HO, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon LEE Wing-tat
    Hon CHEUNG Hon-chung
    Hon Albert HO Chun-yan
    Hon SIN Chung-kai
    Hon Lawrence YUM Sin-ling

Public officers attending :

Transport Branch
Mr Paul S W LEUNG
Deputy Secretary for Transport
Mrs Agnes Allcock
Principal Assistant Secretary for Transport
Highways Department
Mr C K MAK
Government Engineer/ Railway Development

Attendance by invitation :

Kowloon-Canton Railway Corporation

Mr James Blake
Senior Director, Capital Projects
Mr Samuel LAI
Director, Finance
Mr Martin Brown
Acting Director, West Rail

BZW Asia Limited
Mr Stephen Phillips
Director

Clerk in attendance:

Ms Estella CHAN
Chief Assistant Secretary (1)4

Staff in attendance :

Mr Matthew LOO
Senior Assistant Secretary (1)4 (Atg)



I Confirmation of minutes of previous meetings

(LegCo Paper No. CB(1) 1336/96-97

LegCo Paper No. CB(1) 1337/96-97)

The minutes of the meetings held on 24 January and 3 February 1997 were confirmed.

II Matters arising from previous meetings

Paper No. CB(1) 1335/96-97(01) - Concerns raised by members at the meeting of 3 February 1997

Paper No. CB(1) 1335/96-97(02) - Response of the Kowloon-Canton Railway Corporation and the Administration to CB(1) 1335/96-97(01)

Paper No. CB(1) 1118/96-97 - Brief report of the consultancy study on the review of the senior management structure of the Kowloon-Canton Railway Corporation)

2. On the estimated time for recovering the capital and financing costs of the Western Corridor Railway (WCR) project, the Deputy Secretary for Transport (DS for T) advised that it would take 17 years starting from the commencement of construction to recover the total estimated project cost of $49.6 billion. This estimate was based on the total project cost, which included financing costs during construction, and the annual operating cashflow of the project. Mr Stephen Phillips supplemented that the Internal Rate of Return (IRR) of 13.2% was related to the whole life of the project and had no direct relationship with the number of years required to recover the total project cost. In response to a member, DS for T advised that on the above basis, the estimated fare would be $21 per ride from Tuen Mun to urban Kowloon.

3. As regard the progress of staff recruitment for the project, Mr James Blake advised that 35 professional and technical posts had been filled by Kowloon-Canton Railway Corporation (KCRC) staff as at 22 April 1997. Of these posts, 11 were taken up by KCRC’s internal applicants, 12 by external applicants, and 12 by incumbent consultant staff. On the recruitment criteria, he said that the scope of duties and level of experience required for the professional and technical posts would be carefully defined before these were advertised. A special committee had been set up to vet the applications which would then be considered by the senior management. He emphasized that all applicants, irrespective of their nationality, would be subject to the same recruitment process prescribed. He also advised that the majority of incumbents were local staff. KCRC aimed to fill all the 108 posts by end of 1997.

4. Some member noted that some recruits were previously employed by the consultant firm Bechtel Pacific (Bechtel), and were concerned about possible conflicts of interest. Mr Blake assured members that all KCRC staff would be individually bound by the stated terms and conditions of a formal contract exclusively for the Corporation. Notwithstanding that, the KCRC Managing Board and senior management were fully aware of members’ concerns and would closely monitor the situation. As to the arrangement for block transfer of administrative support staff from the consultant firm to KCRC, Mr Blake advised that they were junior staff and the arrangement was made for the sake of administrative convenience.

5. Mr Samuel LAI advised that KCRC had both permanent employees and staff working on fixed-term contracts. The arrangement varied from post to post and depended largely on the nature of the job. Among the six Directors, five were permanent staff except for Mr Blake, who was employed on a two-year fixed-term contract. Mr Blake added that out of the various senior staff posts, only the Senior Director, Deputy Director, Finance and General Manager, Property Development, were new posts. This new structure was recommended by consultants and approved by the Managing Board. It aimed at reinforcing the senior management on the basis of three principal streams of work, namely, the co-ordination and management of new capital projects, the re-shuffling of certain responsibilities into a group responsible for providing KCRC’s core transport services, and the strengthening of the corporate financial management function.

6. Some members enquired if two Senior staff members, namely the Director of Property and General Manager, Property Development, for overseeing property management and development was justified. Mr LAI responded that KCRC had maintained an annual income of around $400 million from rental, which warranted the creation of a General Manager post to supervise the management of properties. Furthermore, KCRC had some major long-term property development plans to be implemented in the near future and it was essential to dedicate a senior staff member to take charge of this growing property development portfolio. On the recommendation for the Director, East Rail, to take over Kowloon-Canton Railway (KCR) Freight from the Director, Corporate Development, Mr LAI said that the General Manager - Freight had already been responsible for the operation of freight transport and the new arrangement would enable the Director, East Rail to be responsible for him, to oversee the entire KCR Freight business. He agreed with members that this arrangement would have to be reviewed when freight transport of WCR was put into operation. In addition, he advised that the new arrangement for the Director, Light Rail, to take over KCR Bus was aimed at streamlining the provision of these two related services.

7. Some members recalled that the proposed 108 KCRC in-house professional staff would be responsible mainly for the design and planning of the WCR project. They queried the need at this juncture for such advertised posts as Signalling Manager and Operations Manager, who would assume mainly operating responsibilities. In response, Mr Martin Brown advised that railway systems in Hong Kong had to carry a large number of people and should be extremely reliable; this could not be achieved without good planning. For instance, the Operation Manager’s prime responsibility was to ensure that the system would have sufficient capacity to cope with the patronage forecast. He had to work closely with the Administration at the planning stage so as to avoid problems experienced in the case of the East Rail in which stations, signalling systems and other major facilities had to be redesigned within the first ten years of operation in order to meet the increasing demand on transport services. The Signalling Manager, on the other hand, would manage a signalling study at the planning stage to identify the most suitable signalling system for WCR. The Quality Manager would be responsible for devising quality plans, instructions and procedural guidelines for the planning and development of WCR adopted, and making sure that the operations would meet the stated standards. This quality approach in management had brought substantial benefits to KCRC.

8. In response to members, DS for T and the Principal Assistant Secretary for Transport affirmed the importance for such non-engineering professionals as the Public Affairs Manager at this stage to enhance communication between the Administration and KCRC and the public. They quoted the consultation exercise conducted in Mei Foo Sun Tsuen regarding the station design and advised that these staff had helped to collect public views which was valuable to KCRC in revising the design of the station. Mr Blake added that the types of community relations required for WCR and the East Rail were different; a more proactive approach was expected for WCR while keeping up public relations in the East Rail was also essential. In response to a member’s enquiry about the duties of Technical Translators, Mr Blake advised that they would be responsible for translation of terms to produce a common terminology for engineers and other staff members.

9. Members noted Mr Blake’s advice that the WCR project team proposed in January 1997 represented a minimum staffing requirement for the project, and considered it essential for the Administration to ensure that the proposed establishment in KCRC would be deployed in the most cost-effective manner for the implementation of the WCR project. DS for T appreciated members’ advice and responded that the Administration had closely monitored the situation. The 108 posts would not be filled all at once and KCRC would only recruit staff when the need arose. Mr Blake added that commencement of the recruitment exercise was timely as advertised posts might not be filled immediately. On some occasions, the most suitable candidate might reject the offer and the whole recruitment process would need to be repeated.

KCRC

10. Some members enquired if it was necessary to commission another consultant to look into the WCR project when its design was completed. In response, Mr Blake advised that the technical studies would complete 25% of the design. Once the Technical Studies Programme was completed, KCRC would need to carry out the full design and contractors would be invited to provide input to the detailed design of various facilities, such as the signalling system, through open tendering. KCRC would have to assess these tenders and make sure that they were up to the prescribed standard. It was estimated that the proposed 108 posts could meet the increasing workload beyond the completion of the Technical Studies Programme and this establishment was scheduled for review in 1998. The number of Bechtel staff would decline as planned. Mr Blake undertook to provide the detailed progress and future plans of the consultancy contracts under the Technical Studies Programme for members’ reference.

KCRC

11. Mr LAI advised that the establishment currently proposed was the result of negotiation with Bechtel. The total number of KCRC in-house professional and technical staff had been increased from 66 to 108. This change had enabled KCRC to take firm control of the design and planning work, as well as the transfer of technology from Bechtel. Although the overall total number of staff remained almost unchanged, Mr Blake advised that a cost saving of $106 million per annum was being achieved. KCRC undertook to provide the following information on each of the 108 professional and technical posts:

  1. a brief description of duties;
  2. if currently filled by a staff member of Bechtel, the timing for changeover to KCRC;
  3. if vacant, by when it would be filled; and
  4. the nationality of the incumbent if filled by KCRC.

III Any other business

Proposal for extension of the Western Corridor Railway to Area 16 or Area 44 of Tuen Mun

(Paper No. CB(1) 1368/96-97(01) - Written proposal provided by the Hong Kong Association for Democracy and People’s Livelihood

Paper No. CB(1) 1368/96-97(02) - Response of the Administration to CB(1) 1368/96-97(01))

12. The Chairman advised that the Hong Kong Association for Democracy and People’s Livelihood (HKADPL) had forwarded a proposal to the Complaints Division of the LegCo Secretariat for extension of WCR to Area 16 or Area 44 of Tuen Mun. At the Chairman’s invitation, Dr Hon LAW Cheung-kwok on behalf of HKADPL elaborated that the proposal was to extend the WCR from its present proposed terminus at San Fat Estate to Butterfly Estate. He pointed out that the existing WCR proposal would only benefit around 100 thousand people, while 60% of the 300 thousand residents in the vicinity who worked in Kowloon or Hong Kong Island would not be able to gain direct access to WCR. The HKADPL’s proposal would help to resolve this problem. He urged the Administration to adopt this proposal, provided that the on-going work would not be delayed.

13. DS for T said that he appreciated HKADPL’s proposal and the Administration would conduct studies on the engineering, transport, environmental and financial aspects to assess the feasibility and cost-effectiveness of the proposal. Nevertheless, it might not be possible to include the proposal in the current project which was scheduled for completion in 2003. The Government Engineer/ Railway Development further advised that as the proposed extension to Area 16 would run across Yau Oi Estate and On Ting Estate, an underground railway might be required. The extension to Yuet Wu Villa in Area 44 might need an elevated section over Castle Peak Bay. Both suggestions would result in significant increases in the capital cost of WCR. In order to expedite the construction of WCR, it was advisable to focus on the original proposal first and consider the extension from San Tat Estate to Tuen Mun South later. He agreed with HKADPL on the strategic importance of WCR in cross-border passenger and freight transport, and undertook to consider the proposal in the context of the on-going Railway Development Strategy Review.

14. Members agreed that the next meeting would be held on 13 May 1997. There being no other business, the meeting ended at 10:30 a.m.

Legislative Council Secretariat
22 May 1997



Last Updated on 22 August 1998