EC(97-98)20
For discussion
on 10 September 1997

ITEM FOR ESTABLISHMENT SUBCOMMITTEE OF
FINANCE COMMITTEE

HEAD 145 - GOVERNMENT SECRETARIAT :
ECONOMIC SERVICES BUREAU
Subhead 001 Salaries

Members are invited to recommend to Finance Committee the creation of the following permanent post in the Economic Services Bureau of the Government Secretariat -

1 Administrative Officer Staff Grade C
(D2) ($110,000 - $116,800)

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PROBLEM

The Secretary for Economic Services (SES) needs additional permanent staffing support at the directorate level to cope with the on-going and anticipated workload in air services negotiations.

PROPOSAL

2.SES proposes to create an additional permanent post of Administrative Officer Staff Grade C (AOSGC) in the Air Services Negotiations Unit (ASNU) to deal with air services negotiations and related matters.

JUSTIFICATION

3.The main responsibilities of the ASNU have been as follows -

1. before the transition, separation from the United Kingdom ' s air services agreements (ASA) those components which applied to Hong Kong;

2. negotiation and conclusion of ASAs and implementation arrangements with new aviation partners;

3. negotiation and conclusion of air services transit agreements (ASTAs) which mainly cover overflights;

4. regular review, negotiation and conclusion of bilateral traffic arrangements;

5. participation in discussion in multilateral and regional fora on air transportation issues; and

6. ensuring that our air services policy remains appropriate.

4.With the completion of the separation exercise referred to in paragraph 3(a) above in June 1997, we have reviewed the function and the structure of the ASNU in the light of on-going and anticipated tasks.

5.The new airport at Chek Lap Kok, with its increased capacity, will provide a lot of opportunities for further development of air services between Hong Kong and other places. We have so far signed 22 ASAs with aviation partners. To maintain Hong Kong ' s status as an international and regional aviation centre and to meet the needs of the travelling public and traders, we need to conclude ASAs with more new aviation partners to provide a legal framework for air services with them. In parallel, we also need to regularly review existing traffic arrangements covered by ASAs and re-negotiate them from time to time to meet market demands. Judging from past experience, we would, on average, need to undertake these exercises around once every 12 to 18 months for many partners. In addition, we have to conclude ASTAs with more countries to provide a legal framework for Hong Kong airlines to overfly them en route to other destinations not covered by the relevant multilateral agreement. We have completed negotiation of seven ASTAs, and will continue to negotiate with more countries.

6.Negotiation of an ASA and/or traffic arrangements is a lengthy process which can span over several years in some cases. Each round of negotiations involves extensive advance preparation work, including consultations with relevant departments within the Administration and with Hong Kong airlines to formulate negotiation strategies and making arrangements with the local consulates or the overseas aviation authorities for the talks. Whilst negotiations of ASTAs is relatively simple in terms of substance, experience shows that due to the remote locations of the countries concerned (mostly in Central Asia, Eastern Europe, Indian Ocean and Africa) and the lack of effective telecommunications and direct air links with Hong Kong, it takes much more time to set up meetings and travel to these countries for such talks. Past experience shows that with two teams, the ASNU can on average only handle a maximum of about two negotiations every month if there are no other urgent commitments.

7.As a centre of international and regional aviation, Hong Kong needs to maintain its profile and to participate actively in the relevant multilateral and regional fora. Currently Hong Kong participates actively in meetings of APEC at various levels held in turns in APEC economies. These include meetings of the Transportation Working Group and meetings at ministerial and senior officials ' levels. The ASNU represents Hong Kong at a small group set up under the Transportation Working Group to discuss how to make international air services more competitive. The Unit also provides support to officials attending APEC meetings at ministerial and senior officials ' level.

8.Since 1988, the ASNU has an establishment of one permanent post of AOSGC, one supernumerary post of AOSGC and a small number of supporting staff. The supernumerary post, last re-created on 8 July 1994, lapsed on 31 March 1997. An AOSGC on loan from the operational reserve of the Civil Service Bureau is currently undertaking the duties of the post.

9.We have, after reviewing the staffing requirements of the ASNU, concluded that the on-going and anticipated workload in the Unit requires two permanent air services negotiation teams each headed by an AOSGC. We need, therefore, an additional permanent AOSGC post.

10.At present, the two officers at the AOSGC rank share the work of the ASNU principally on a geographical basis. The officer dealing with negotiations with APEC economies normally also works on APEC related issues. We would maintain flexibility in deployment of staffing resources to respond to /changing .....changing workloads, as shown in the proposed list of duties and responsibilities of the two officers at Enclosure 1. An organisation chart of the ESB is at Enclosure 2.

FINANCIAL IMPLICATIONS

11.The additional notional annual salary cost of the proposal at mid-point is -

The full annual staff cost of this post, including salaries and on-costs, is $2,475,111. We have included sufficient provision for this proposal in the 1997-98 Estimates.

BACKGROUND INFORMATION

12.The Finance Committee first approved a supernumerary AOSGC post for the ASNU of the then Economic Services Branch on 1 June 1988. We have since re-created the post twice, the last time on 8 July 1994. The post lapsed on 31 March 1997. Pending review of the structure for the ASNU, an AOSGC is currently on loan from the operational reserve to undertake the work required.

CIVIL SERVICE BUREAU COMMENTS

13.The Civil Service Bureau agrees that there is a need for the creation of a permanent AOSGC post to cope with the on-going and anticipated work associated with maintaining and expanding Hong Kong ' s air services with other places. It considers the grading and ranking of the post appropriate.

ADVICE OF THE STANDING COMMITTEE ON DIRECTORATE SALARIES AND CONDITIONS OF SERVICE

14.The Standing Committee on Directorate Salaries and Conditions of Service has advised that the grading proposed for the permanent post of AOSGC would be appropriate if the post were to be created.

Economic Services Bureau
September 1997

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Enclosure 1 to EC(97-98)20

Two Administrative Officers Staff Grade C (D2)
(Principal Assistant Secretary for Economic Services (Air Services Negotiation) 1 and 2)

Main Duties and Responsibilities

Both officers are responsible to Deputy Secretary (Economic Services)2 for the following duties -

1. representing the Hong Kong Special Administrative Region Government at air services negotiations;

2. formulating strategies for air services negotiations;

3. implementing air services agreements and arrangements;

4. liaising with and providing necessary advice to the air transport industry in Hong Kong on Government ' s policy and requirements concerning air services;

5. identifying needs for air transport services in Hong Kong, advising on how these needs should be met, ensuring that air services policy remains appropriate to the needs of Hong Kong and recommending changes as necessary; and

6. participating in discussions at multilateral and regional fora on air transportation issues and providing necessary support to senior officers as appropriate.