OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 11 November 1998
The Council met at half-past Two o'clock

MEMBERS PRESENT:

THE PRESIDENT
THE HONOURABLE MRS RITA FAN, G.B.S., J.P.

THE HONOURABLE KENNETH TING WOO-SHOU, J.P.

THE HONOURABLE JAMES TIEN PEI-CHUN, J.P.

THE HONOURABLE DAVID CHU YU-LIN

THE HONOURABLE HO SAI-CHU, J.P.

THE HONOURABLE CYD HO SAU-LAN

THE HONOURABLE EDWARD HO SING-TIN, J.P.

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE MICHAEL HO MUN-KA

DR THE HONOURABLE RAYMOND HO CHUNG-TAI, J.P.

THE HONOURABLE LEE WING-TAT

THE HONOURABLE LEE CHEUK-YAN

THE HONOURABLE MARTIN LEE CHU-MING, S.C., J.P.

THE HONOURABLE ERIC LI KA-CHEUNG, J.P.

THE HONOURABLE LEE KAI-MING, J.P.

THE HONOURABLE FRED LI WAH-MING

THE HONOURABLE NG LEUNG-SING

PROF THE HONOURABLE NG CHING-FAI

THE HONOURABLE MARGARET NG

THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, J.P.

THE HONOURABLE RONALD ARCULLI, J.P.

THE HONOURABLE MA FUNG-KWOK

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE CHEUNG MAN-KWONG

THE HONOURABLE AMBROSE CHEUNG WING-SUM, J.P.

THE HONOURABLE HUI CHEUNG-CHING

THE HONOURABLE CHRISTINE LOH

THE HONOURABLE CHAN KWOK-KEUNG

THE HONOURABLE CHAN YUEN-HAN

THE HONOURABLE BERNARD CHAN

THE HONOURABLE CHAN WING-CHAN

THE HONOURABLE CHAN KAM-LAM

DR THE HONOURABLE LEONG CHE-HUNG, J.P.

THE HONOURABLE MRS SOPHIE LEUNG LAU YAU-FUN, J.P.

THE HONOURABLE LEUNG YIU-CHUNG

THE HONOURABLE GARY CHENG KAI-NAM

THE HONOURABLE SIN CHUNG-KAI

THE HONOURABLE ANDREW WONG WANG-FAT, J.P.

DR THE HONOURABLE PHILIP WONG YU-HONG

THE HONOURABLE WONG YUNG-KAN

THE HONOURABLE JASPER TSANG YOK-SING, J.P.

THE HONOURABLE HOWARD YOUNG, J.P.

DR THE HONOURABLE YEUNG SUM

THE HONOURABLE YEUNG YIU-CHUNG

THE HONOURABLE LAU KONG-WAH

THE HONOURABLE LAU WONG-FAT, G.B.S., J.P.

THE HONOURABLE AMBROSE LAU HON-CHUEN, J.P.

THE HONOURABLE EMILY LAU WAI-HING, J.P.

THE HONOURABLE CHOY SO-YUK

THE HONOURABLE ANDREW CHENG KAR-FOO

THE HONOURABLE SZETO WAH

THE HONOURABLE TIMOTHY FOK TSUN-TING, J.P.

THE HONOURABLE LAW CHI-KWONG, J.P.

THE HONOURABLE TAM YIU-CHUNG, J.P.

THE HONOURABLE FUNG CHI-KIN

DR THE HONOURABLE TANG SIU-TONG, J.P.

MEMBERS ABSENT:

DR THE HONOURABLE DAVID LI KWOK-PO, J.P.

DR THE HONOURABLE LUI MING-WAH, J.P.

THE HONOURABLE LAU CHIN-SHEK, J.P.

THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P.

PUBLIC OFFICERS ATTENDING:

THE HONOURABLE DONALD TSANG YAM-KUEN, J.P.
THE FINANCIAL SECRETARY

THE HONOURABLE ELSIE LEUNG OI-SIE, J.P.
THE SECRETARY FOR JUSTICE

MRS KATHERINE FOK LO SHIU-CHING, J.P.
SECRETARY FOR HEALTH AND WELFARE

MR RAFAEL HUI SI-YAN, G.B.S., J.P.
SECRETARY FOR FINANCIAL SERVICES

MR BOWEN LEUNG PO-WING, J.P.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS

MISS DENISE YUE CHUNG-YEE, J.P.
SECRETARY FOR THE TREASURY

MRS REGINA IP LAU SUK-YEE, J.P.
SECRETARY FOR SECURITY

MR LEO KWAN WING-WAH, J.P.
SECRETARY FOR ECONOMIC SERVICES

MR KEVIN HO CHI-MING, J.P.
SECRETARY FOR TRANSPORT

MR MATTHEW CHEUNG KIN-CHUNG, J.P.
SECRETARY FOR EDUCATION AND MANPOWER

CLERKS IN ATTENDANCE:

MR RICKY FUNG CHOI-CHEUNG, J.P., SECRETARY GENERAL

MS PAULINE NG MAN-WAH, ASSISTANT SECRETARY GENERAL

MR RAY CHAN YUM-MOU, ASSISTANT SECRETARY GENERAL

PAPERS

The following papers were laid on the table pursuant to Rule 21(2) of the Rules of Procedure:

Subsidiary Legislation	L.N. No.
Registered Designs Ordinance (Amendment of Schedule) Regulation 1998	340/98
Patents Ordinance (Amendment of Schedule 1) Order 1998	341/98
Trade Marks Ordinance (Amendment of Schedule) Order 1998	342/98
Specification of Public Offices	343/98
Professional Accountants (Amendment) Bylaw 1998	344/98
Practising Certificate (Solicitors) (Amendment) Rules 1998	345/98

Sessional Paper

No. 56

─

Hong Kong Tourist Association Annual Report 97/98

ORAL ANSWERS TO QUESTIONS

PRESIDENT (in Cantonese): Questions. I would like to remind Members that question time normally does not exceed one and a half hours, with each question being allocated about 15 minutes on average. When asking supplementaries, Members should be as concise as possible, should not ask more than one question, and should not make statements, as this contravenes Rule 26(5) of the Rules of Procedure.

First question. Mr Edward HO.

Plot Ratio of Buildings in Kowloon City District

1. MR EDWARD HO (in Cantonese): Madam President, now that the Hong Kong International Airport has moved from Kowloon City District to Chek Lap Kok, will the Government inform this Council whether it will consider relaxing the plot ratio applicable to buildings in Kowloon City District; if so, what the details are; if not, why not?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, the permissible plot ratio for most buildings in Kowloon City District is 6 to 7.5 for residential buildings and 12 for commercial and industrial buildings as provided under the Outline Zoning Plan. Many of the buildings have not achieved this development ratio because of the height restriction necessitated by the Kai Tak Airport. As a result of the removal of the airport to Chek Lap Kok, the height restriction has been removed in July 1998, and all sites in Kowloon City District have since been permitted to be developed up to the limits as prescribed under the relevant Outline Zoning Plans, land leases or the Building (Planning) Regulations, as the case may be.

PRESIDENT (in Cantonese): Mr Edward HO.

MR EDWARD HO (in Cantonese): Madam President, I trust that the Secretary knows that a few years ago, the Town Planning Board (TPB) has reduced the permissible plot ratio under the Building (Planning) Regulations for the whole of the Kowloon Peninsula. The ratio for residential buildings was decreased from 9 to 6-7.5, and that for non-residential buildings from 15 to 12. My question is, why is the plot ratio not allowed to be relaxed to that which used to be permissible under the Building (Planning) Regulations?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, I hope you could clarify one point. The main question is about Kowloon City District. The term "Kowloon City District" is distinguishable from "Kowloon" by only two words, but there is a big difference between the two. I wonder if you will allow the Honourable Member to ask this supplementary question.

PRESIDENT (in Cantonese): Mr HO, is your question about the entire Kowloon area or just Kowloon City District?

MR EDWARD HO (in Cantonese): Madam President, Kowloon City District is also a part of Kowloon. Therefore, if the Secretary is unwilling to talk about the other parts, he should at least answer the part that relates to Kowloon City District.

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands, please answer the question about Kowloon City District.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, I have already explained in my main reply that due to the height restriction necessitated by the Airport in the past, buildings in the Kowloon City District have not exhausted the development ratio permitted by us. The main question asks whether we will relax the development ratio. The answer is yes, since buildings in that district have not exhausted the permissible development ratio. Regarding Mr HO's question about whether the development ratio for the whole Kowloon City District will be relaxed, we have actually made an assessment before 1993 on the Kowloon area after the removal of the Airport. At that time, for certain districts in Kowloon, there was no development restriction at all, nor was there a plot ratio restriction in the town planning layouts. Many people were worried that if unrestricted development were allowed in these districts or they be allowed to develop up to the upper limits as prescribed under other regulations, their infrastructure such as roads, drainage and sewerage might not be able to cope with the extent of development. Therefore, the conclusion we reached after making an assessment of the Kowloon area was that residential buildings (Group A) could be developed at the plot ratio of 7.5 to 9. Other relevant guidelines were also formulated. And, coming back to Kowloon City District, it has not even exhausted the development ratio that we planned to relax, so we hope that after the removal of the Airport, there will be sufficient incentive for the buildings of that district to be developed up to the permissible limits.

PRESIDENT (in Cantonese): Mr Edward HO.

MR EDWARD HO (in Cantonese): Madam President, the Secretary has not answered my supplementary question. My question was whether the Government would relax the ratio up to the limits permissible under the Building (Planning) Regulations. If not, why not?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands, do you have anything to add?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): I can add something more. However, this question is somewhat different from the original question. Actually, I already explained just now that for the entire Kowloon area, the maximum development limit had to be set by taking into account the infrastructure, transport and community facilities. This task has been completed and its results announced. The relevant Outline Zoning Plans have been approved after a series of appeal procedures. They have gone through a judicial review and the Government has won the case. Before considering extending the development of the Kowloon area, we have to consider carefully whether the infrastructure, community facilities and transport facilities are able to meet the needs. Since 1993 when the Outline Zoning Plans were made, some of the transport facilities and other infrastructure in some parts of Kowloon have been improved and some have been added, while some others are going to be improved, such as the roads in central Kowloon, the transport facilities in West Kowloon and the sewerage improvement works now being undertaken in Mong Kok, Sham Shui Po and Yau Ma Tei. The Government intends to commission a comprehensive consultancy study next year on the improvement measures taken in the Kowloon area in recent years and future improvement measures planned by the Government. It will also examine whether the plot ratio for property development in the Kowloon area could be increased. This study will be completed around the year 2000. We will have a more precise answer by that time.

PRESIDENT (in Cantonese): Mr CHAN Kam-lam.

MR CHAN KAM-LAM (in Cantonese): Madam President, in answering the supplementary question brought up by the Honourable Edward HO, the Secretary said that a study report would be completed in 2002. There is now huge redevelopment potential for buildings in the entire Kowloon City District. The Government has also made plans for the development of Southeast Kowloon. Will the Government inform this Council of its initial planning for the development of Kowloon and Southeast Kowloon in considering the overall development?

PRESIDENT (in Cantonese): Mr CHAN Kam-lam, are you asking about the whole development plan of Kowloon City District?

MR CHAN KAM-LAM (in Cantonese): Madam President, the main question is about the plot ratio for buildings in Kowloon City District. In my supplementary question, I said that due to the huge development potential of Kowloon City District, the Government had also considered the overall development of Southeast Kowloon. The Government said just now that a study report would be completed in 2002. Since it is five years from now, will the Government tell us what is being considered in advance?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): First, Mr CHAN, maybe I spoke too fast just now. Our study report will be completed in the year 2000 and not 2002. Therefore, it is only one or two years from now, instead of five years. Returning to Kowloon City District, since it is near to the Kai Tak Airport, it should be part of Southeast Kowloon referred to by Mr CHAN. Most residential buildings in the Kowloon City District can now have substantial additions. The present plot ratio for development is 3 or 4 at the most. However, we will allow a plot ratio of up to 6, 7.5 or even 9 depending on the size of the sites. Commercial and residential mixed user buildings can be developed to the highest ratio. Of course, in drawing up the timetable for the development of the Kai Tak Airport, that is, Southeast Kowloon, the Government has taken into account the future possibility of more large-scale or intensive development in Kowloon City District and the need for adequate infrastructure. With the development of Southeast Kowloon, additional infrastructure and community facilities must be built. Therefore, if Members look at the two Outline Zoning Plans published by the TPB, they will find that many communal areas and community facilities have been added and that there are plans for the improvement of transport, sewerage and drainage. The Transport Bureau is also studying the possibility of extending the Mass Transit Railway to that area underground.

Therefore, on the whole, we certainly hope to find land for residential development in Southeast Kowloon. This will include two kinds of development: one is public housing or home purchase assistance scheme and the other is private commercial residential buildings, that is, residential buildings available on the commercial market. We expect that the future population in Southeast Kowloon could increase to around 310 000. Part of the land in the district will be reserved for commercial use in order to provide job opportunities. It is expected that approximately 60 000 job opportunities will be provided. Of course, the exact figures could only be confirmed after the Outline Zoning Plans have been approved.

PRESIDENT (in Cantonese): Mr Howard YOUNG.

MR HOWARD YOUNG (in Cantonese): Madam President, I believe the question is not whether developers will develop at the plot ratio of 6 to 7.5, but whether there is any possibility of going beyond the ratio of 6 to 75. Will the Secretary clarify whether the ratio of 6 to 7.5 in Kowloon City District is already the highest compared with other districts in Kowloon, or whether the plot ratio in neighbouring districts or other districts in Kowloon is higher than that in Kowloon City District?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, in drawing up the 16 new Outline Zoning Plans for Kowloon, the same principles are applied. Therefore, the maximum plot ratio for residential development in Kowloon City District is the same as that for other districts in Kowloon. There is no difference between them. However, as I said just now, for mixed user buildings, we might allow them to be developed to a ratio of up to 9.

PRESIDENT (in Cantonese): Miss CHOY So-yuk.

MISS CHOY SO-YUK (in Cantonese): Madam President, the Secretary said that the plot ratio for some districts in Kowloon could not be changed at once on account of factors such as transport or sewerage facilities. Are there any districts not affected by these factors such that their plot ratio can be instantly changed upon the removal of the Airport.

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, this can hardly happen. The Honourable Member seems to think that the whole of Kowloon is just one place with the same conditions everywhere, but the actual situation is not like this. What I referred to just now was a kind of land use. Even residential buildings are classified into Groups A, B and C and further classified into types 1 to 7. There must be separate planning for different types of land use. One must consider what land leases are granted and what scale of development is permitted in the real situation by looking at the infrastructure and community facilities of each piece or each group of land. This task has already begun in 1993. We have reviewed the whole of Kowloon ─ not just Kowloon City District, but the whole of Kowloon and set different ratios of development for different sites and different areas. At that time, in fact we have already set the maximum limit for Kowloon City District. However, many sites in that district have not been developed up to the limit. Actually, whether developments in that district can exhaust this limit is not something beyond the control of the Government, but depends entirely on how individual owners develop their land.

PRESIDENT (in Cantonese): Mrs Selina CHOW.

MRS SELINA CHOW (in Cantonese): Madam President, the Secretary said just now that this policy was adopted after the study in 1993. However, he also mentioned that the Government could not relax the plot ratio on account of inadequate infrastructure in that district. As we all know, infrastructures on Hong Kong Island might even be inferior to those in Kowloon. Will the Secretary explain why the density restriction is greater in Kowloon than on Hong Kong Island, when infrastructures or other facilities on Hong Kong Island might be inferior to those in Kowloon?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, we have moved from Kowloon City District to Kowloon, and now from Kowloon to Hong Kong Island. (Laughter) If there is a question on the New Territories later, I may be willing to answer too.

Madam President, actually, I am not quite sure why the Honourable Mrs Selina CHOW said that infrastructures on Hong Kong Island were inferior to those in Kowloon. On the basis of the size of population, Hong Kong Island has in fact better infrastructures than Kowloon. This is solely because of the lower population density. The entire Kowloon district has a much larger population than Hong Kong Island. Therefore, we cannot just look at infrastructures, but should have to consider the distribution of population as well. Another thing is that most residents on Hong Kong Island live on the side facing the Victoria Harbour. Therefore, there is less conflict between regions on Hong Kong Island. For instance, there are no factory areas. Therefore, we can tolerate less restrictions on the development of many banking or commercial districts.

PRESIDENT (in Cantonese): Mr Ronald ARCULLI.

MR RONALD ARCULLI: Madam President, from what the Secretary has said so far, it seems to me that there is in fact a necessity, or indeed, a desire, on the part of the Government to actually look at not just the plot ratio aspect, but also the user aspect.

My question, Madam President, is that why are we talking about the plot ratio of 6 to 7.5 for residential buildings and 12 for commercial and industrial buildings for Kowloon City District. In view of the present demand for residential buildings, as opposed to the lack of demand for commercial and industrial buildings, is it possible for the Administration to actually consider increasing the plot ratio for residential buildings and, perhaps, decreasing it for commercial and industrial buildings?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Madam President, I would not be able to commit the Government to the contents of Mr ARCULLI's question. What I can commit is that we will undertake a review to look at the whole metro area. And we will look at the metro area not just on housing, but we will also review the land use, transport, and also environmental interface of various districts or various development strategies.

However, as to whether we will be able to increase the residential land development ratio and decrease that of the commercial land, there are several factors which come immediately into my mind. The first is whether we are taking a very short-term snapshot consideration in view of the current day situation? Most of the land or the development will not take place until years from today. So are we taking a long-enough-term look at this situation? The second thing, of course, is that once we drastically review the relationship of the development ratios among various plots of land, that will indirectly affect the value of the land currently held by existing land owners or building owners. I am not saying whether it will be a positive or negative effect, but that is against something which we should not rush into at the current time.

PRESIDENT (in Cantonese): We have spent more than 17 minutes on this question. Although some Members still wish to ask questions, I hope they will follow this up through other channels.

PRESIDENT (in Cantonese): Second question. Mr Andrew WONG.

Response Time of Emergency Ambulance Service

2. MR ANDREW WONG (in Cantonese): Madam President, with effect from this month, the Fire Services Department (FSD) has adopted the 12-minute response time as the performance target for emergency ambulance service (EAS), in place of the 10-minute travel time target adopted in 1986. However, the FSD indicated in 1996 that the average response time for emergency ambulance service was 11 minutes. On the other hand, a performance target of six-minute response time is still adopted for fire engines. In this connection, will the Government inform this Council:

(a) of the measures in place to improve the response time of emergency ambulance service; and

(b) whether it has assessed if the revision of the performance target for emergency ambulance service makes the public feel that there is regression in terms of service standards?

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President,

(a) The FSD commissioned a consultancy in 1995 to study ways to improve the performance of the EAS. Among the extensive and comprehensive proposals in the consultancy report, actions on some of the measures recommended for phased implementation have been completed. They include:

(i) redeploying ambulances to extend emergency cover to all fire stations at strategic locations;

(ii) through internal redeployment, providing additional ambulances for the densely populated areas according to the actual pattern of emergency calls;

(iii) transfer of non-emergency ambulance service to the Hospital Authority and Auxiliary Medical Services;

(iv) increasing the utilization of ambulance aid motorcycles (AAMCs) in emergency response; and

(v) streamlining operational procedures to enable more flexible mobilization of ambulances and crews and better service efficiency.

Regarding long-term measures, the Government has provided additional resources for the employment of 165 and 61 ambulancemen in the 1997-98 and 1998-99 financial years respectively. Following the completion of the Tung Chung and Sham Tseng ambulance depots and the new airport, 116 staff were recruited early this year to meet the service demand. The new recruits will render service in stages after induction training. The last batch of 105 staff, currently under training, will join the service in April 1999.

In additional to ambulance staff, we have also acquired 27 ambulances and 11 AAMCs as recommended in the consultancy report. Plans for new ambulance depots in North Point, Sheung Wan, Kwai Chung and Kowloon Tong are underway to further improve the EAS coverage. An efficient trunked radio system has also been put into operation. All these measures will help improve the EAS response time. In fact, the FSD was able to respond to 92.2% of emergency calls within a 12-minute response time in the third quarter of this year. We expect that the EAS will achieve its pledged performance target of 92.5% when another batch of trained ambulancemen render service in the second quarter of 1999.

In his main question, Mr Andrew WONG has made an analogy between the 12-minute response time of the EAS and the six-minute response time for fire engines. I wish to clarify that a graded response time has been adopted as the performance indicator for fire appliances, that is, the response time for Grade A and B areas or densely populated urban areas is six minutes, while that for Grade C, D and E areas or scattered and isolated places ranges from nine to 23 minutes. As fire services differ from the EAS in terms of service nature and demand, as well as mode of operation, strict, direct comparison between the two performance indicators would not be appropriate.

(b) The FSD has conducted a trial scheme in September 1997 to March 1998 to test the effectiveness of the trunked radio system in measuring the EAS response time. It was found that two minutes were required for the activation process. Taking account of the performance target of a travel time of 10 minutes, the target response time is set at 12 minutes. This new indicator reflects clearly the necessary procedures involved in completing an emergency response, which comprises a two-minutes activation time and a 10-minute travel time. The 12-minute response time is therefore a clearer performance indicator. There is no regression in the service standard and, to the contrary, a response time indicator is generally accepted as more effective and comprehensive for measuring the performance of the EAS. I believe that there has been general understanding and acceptance of the revised indicator by the public.

The 12-minute response time performance indicator compares favourably with overseas standards. I also note that many metropolitan cities have not set any performance targets for their EAS.

Finally, I would like to take this opportunity to reiterate the FSD's determination to achieve the new performance indicator in the second quarter of 1999, when we will also review the feasibility to further reduce the 12-minute target response time. Madam President, although the performance indicator has been set at responding to 92.5% of emergency calls within a 12-minute response time, our performance records reveal that the EAS response time for over 50% of emergency calls is actually less than eight minutes. The FSD has also issued internal guidelines to increase the utilization of AAMCs for cases where the response time would likely exceed 12 minutes. All these arrangements are made to fulfil the FSD's performance pledge of ensuring that patients are provided with prompt emergency service and conveyed to hospitals as quickly as possible for necessary medical treatment.

PRESIDENT (in Cantonese): Mr Andrew WONG.

MR ANDREW WONG (in Cantonese): Madam President, the main reply seems to have answered the first half of my question only. Although the main reply is divided into parts (a) and (b), it has failed to answer my query. Of course, I do not agree with the first half of the reply. This is because part (a) of my question is concerned with the measures put in place for improving the response time of the EAS, that is, from the existing 12 minutes to a higher standard such as 10 minutes or eight minutes. But part (a) of the reply indicated that no such measures are in place. As for part (b) of my question, it is concerned with whether the public would feel that there is regression in terms of service standards ......

PRESIDENT (in Cantonese): Mr WONG, what do you really want to ask? Please raise your supplementary question directly.

MR ANDREW WONG (in Cantonese): Madam President, would you let me finish this sentence please?

PRESIDENT (in Cantonese): Mr WONG, you were only commenting on the reply. The question time should be used for raising questions only.

MR ANDREW WONG (in Cantonese): Madam President, regarding part (b), I only want to raise a simple supplementary question. The Government said in 1996 that the travelling time was 10 minutes but the activation time was one minute on average, which means that the actual response time was 11 minutes on average. Such being the case, is the Government trying to cheat people as the EAS response time for over 50% of emergency calls is less than eight minutes? In other words, is the current average response time lower than 11 minutes as was needed previously? This is a very specific supplementary question. Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President, first of all, I want to explain and answer the supplementary question raised by Mr Andrew WONG regarding why the consultancy set the activation time at one minute in 1995 but now the Government, in setting the new performance indicator, said the activation time took two minutes and, on top of the 10-minute travelling time, it would take a total of 12 minutes. So, is there a regression of service? First, I have to explain that the random check conducted by the consultancy in 1995 was done over a very short period of time ─ 16 days only ─ the findings of which were used for supporting its claim that the activation time took only one minute. But after putting in place a new trunked radio system, the FSD conducted a test over a long period of time between September 1997 and March 1998 and found that two minutes were actually required for the activation process. Based on this finding, the FSD set the activation time and travelling time at two minutes and 10 minutes respectively, which means that the response time indicator should be set at 12 minutes.

Earlier, I mentioned eight minutes, just because I wanted to explain to Members that although our performance pledge had been set at responding to 92.5% of emergency cases within 12 minutes, the response time for over half of the cases was actually less than eight minutes. But as we are still unable to attain a higher standard for the time being, we need to maintain our performance pledge of responding to 92.5% of emergency cases within a 12-minute response time. Although this indicator has been set for quite some time, we have actually been unable to achieve this over the past few years. But I am pleased to say that our figures for July, August and September this year have exceeded 92.5%. We intend to put the situation under observation for a longer period of time to see if we can constantly reach the target of responding to 92.5% of emergency cases within 12 minutes in the second quarter of 1999. If the findings of the review indicate that we can improve our services with the resources available to us, we might set a higher service indicator.

PRESIDENT (in Cantonese): Mr CHAN Wing-chan.

MR CHAN WING-CHAN (in Cantonese): Madam President, in spite of the fact that the Secretary said in the main reply that additional manpower and ambulances had been provided, the 10-minute travelling time was still replaced by the 12-minute response time. We still doubt that would this be a regression for the Government to do so? We understand that ambulances should shorten the time taken to reach the scene as much as possible because it is most important to save lives. What will the Government do to shorten the travelling time?

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President, to start with, our new performance pledge has not led to a regression in our service standard. Our previous performance pledge of 10 minutes referred to the travelling time only, without taking into account the activation time. Our activation time has all along been set at two minutes. The one-minute activation time was only based on the findings of the consultancy the survey of which covered a mere short period of time. Basically, the activation time takes two minutes. Before the performance pledge changed the travelling time into response time, the time required was also 12 minutes when the activation time was included. In other words, the time required at that time was the same as what is required at the moment and there is actually no change.

The second point I want to raise is that although our performance pledge has not been further improved for the time being, our actual performance shows that from July, August and September onwards, we have been able to respond to over 92.5% of emergency cases within 12 minutes. In the review to be carried out next year, we will look at our actual performance. The FSD has also planned to lodge an application to improve its computer system in the hope that the activation time can be shortened from two minutes to one minute so that the response time can be reduced to less than 12 minutes. As for the 10-minute travelling time, our performance pledge has in fact compared favourably with many other major cities in the world. At the moment, we have no plan to further shorten the travelling time.

PRESIDENT (in Cantonese): Mr James TO.

MR JAMES TO (in Cantonese): Madam President, the Government has all along maintained that the activation time is two minutes. So, in addition to the 10-minute travelling time, the response time thus becomes 12 minutes. The investigation conducted by the consultancy was too short as it only covered 16 days. Is the Government aware that when the Security Bureau or the then Security Branch attended two joint meetings held by the former Legislative Council Panel on Security and Panel on Health Services, it indicated that the 11-minute response time was highly reliable as this was supported by the consultancy's independent findings, which were based on the data collected on a rational basis. Does it mean that the Government has misled or cheated Members at that time? When did the Government come to know that it was not reliable to base on that 16-day investigation? Did the Government submit supplementary documents or explain to the public afterwards that they were being misled?

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President, regarding the report of the activation time to the former Legislative Council, I find it very difficult to speak on behalf of the officials who spoke then and say whether or not they had intentionally misled the former Council. But I can reiterate that the two-minute activation time currently adopted is based on a result of a prolonged period of observation. During the six months between September 1997 and March 1998, we recorded all activation times by means of a new trunked radio system and found that the two-minute activation time was reasonable. At the same time, we took into account the fact that we had failed to reach the target of responding to 92.5% of emergency cases within 12 minutes over the past few years. It is therefore meaningless to raise the target at the moment. On the contrary, we have considered how we can further improve our facilities, such as making efforts to shorten the activation time, so as to further enhance our service standard in the coming year.

PRESIDENT (in Cantonese): Mr LAU Kong-wah.

MR LAU KONG-WAH (in Cantonese): Madam President, I share the view that the Government has made substantial improvements in rendering service in this area. But the question is there exists two standards at the moment: it takes six minutes for fire engines to reach the scene, but 12 minutes for ambulances. Why are there different standards for the same place and the same disaster-stricken area? Why do the authorities concerned allow ambulances to take a longer time to respond?

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President, in fact the performance pledge does not guarantee that fire engines will definitely reach the disaster-stricken area within six minutes on all occasions. Just now I have explained that a graded response time is adopted for fire engines. The six-minute response time is applicable to Grade A and B areas, that is, densely populated or densely erected areas where there is a high risk for fire-spreading, while it will take 23 minutes to respond to relatively remote places where the population, premises and risks are more scattered. Why is the activation time for fire engines shorter than that for ambulances? It is because the activation time required by the two types of services are different. Let me first explain the way that ambulances are activated. When the communication centre of the FSD receives a telephone call, the operator must talk to the caller to find out what services are needed. For instance, if the person concerned is in a coma or having a heart attack, an AAMC may be deployed instead because it can reach the scene faster, and this requires human judgment. The computer system will then indicate which ambulance is nearest to the scene. For instance, if the Sham Shui Po district calls for assistance but the nearest ambulance is in Mong Kok, the staff of the control room will then need to see if any ambulance is nearer to the scene and can deploy it there within a shorter time. After locating from the computer system the ambulance which can reach the scene within the shortest period of time, the staff of the control room will then inform the staff on the ambulance of the whereabouts of the scene and what services are needed. All these involve human judgment and dialogues.

As for fire engines, the situation is, on the contrary, different. After the communication centre of the FSD receives a fire report, it will directly page the relevant fire station from the headquarters by way of direct broadcasting. For instance, it will page the Ngau Chi Wan Fire Station if a fire breaks out in Choi Wan Estate. The alarm of the fire station will then be activated and the firemen there will, as what we see from the movies or television programmes, slide down and rush to the fire engine without having the need to talk to anyone. It is only after the fire engine is on the road that the firemen are informed of the situation in detail. Therefore, the activation procedures for ambulances and fire engines are greatly different.

PRESIDENT (in Cantonese): Mr LEE Cheuk-yan.

MR LEE CHEUK-YAN (in Cantonese): Madam President, the "two-minute activation time" and the "one-minute activation time" mentioned earlier are, in my opinion, very important. This is because a life may be saved within that one minute. As the Secretary is new to the post, I would like to ask her to conduct a thorough investigation to see who was responsible for "inflating the figure". Why do I say something like this? This is because it has been stated in the yearbook of 1989 that: "In most circumstances, the time required for dealing with emergency calls and deploying fire engines can be shortened to less than 60 seconds (that is one minute)". This was again repeated in the yearbooks of 1990, 1991 and 1992. The yearbooks said it is one minute, but now it is said ......

PRESIDENT (in Cantonese): Mr LEE, because of time constraint, please raise your supplementary question directly.

MR LEE CHEUK-YAN (in Cantonese): The yearbooks said the activation time was one minute, but just now the Secretary said it was two minutes. I have a video cassette tape for internal use of the FSD. It is clearly indicated in the tape that the activation time is one minute. Then who was responsible for "inflating the figure"? Why is it necessary to do that? If we count from the year 1989, does it mean that the authorities have deceived the public for more than 10 years? I only hope that the Secretary can investigate the matter. As she is a new official in the post, so she is unable to answer my question. (Laughter)

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President, although I am a new official in the post, I will try my best to answer the supplementary question. The figure mentioned by Mr LEE dates back to many years ago, probably 1989 or 1990. I do not know in what year the video was shot. But one of the main reasons for our failure to raise our service standard is that the growth of the demand for the EAS far exceeds what we have estimated, or even exceeds what our consultancy has estimated. One consultancy estimated that the annual growth would be 5%. But let me read out the information I have at hand: a growth of 13.8% for 1987, 5.4% for 1988, 4.92% for 1989, but surprisingly 0.7% for 1990, -1.76% for 1991, 7.19% for 1992, 7.12% for 1993, 7.57% for 1994, 9.84% for 1995, 9.4% for 1996, and then down to 5.6% for 1997. Most of these figures far exceed what we have originally estimated. This is also one of the main reasons why we have been unable to improve our service.

PRESIDENT (in Cantonese): Mr LEE Cheuk-yan.

MR LEE CHEUK-YAN (in Cantonese): The Secretary has not answered whether she is willing to investigate why there is a difference between the figure of 1989 and the current figure. I only expect her to tell me whether she is willing to investigate the matter. Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Security.

SECRETARY FOR SECURITY (in Cantonese): Madam President, I think I have answered the supplementary question raised by Mr LEE Cheuk-yan. But as he has put forward such a request, I am willing to further investigate why judgments have been different.

PRESIDENT (in Cantonese): I understand Members are greatly concerned about the response time of ambulances. This is also a matter of great concern to the public. I can see that many Members still wish to raise supplementary questions but as we have spent more than 20 minutes on this question, I hope Members can follow up this question by means of other channels.

Third question. Mr Bernard CHAN.

Allocation of Parking Bays

3. MR BERNARD CHAN: Madam President, I have observed that, although some parking bays immediately adjacent to airbridges are left idle, many aircrafts are directed to park at bays far away from the passenger terminal building, thus necessitating the use of airport buses to transfer passengers. In this connection, will the Government inform this Council whether it knows:

(a) how the Airport Authority (AA) allocates parking bays;

(b) the percentages of passengers who are transferred in airport buses; and

(c) if the AA has any plan to minimize the use of remote parking bays after the opening of the Northwest Concourse Extension?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President,

(a) The Airport Authority (AA) allocates aircraft parking stands in accordance with established criteria that seeks to optimize the overall utilization of aircraft parking facilities, particularly "frontal" stands, that is, those served by airbridges. The main criteria used are:

(i) scheduled flights will receive priority over non-scheduled (for example, charter) services;

(ii) wide bodied aircraft and longhaul flights will receive priority over narrow bodied aircraft and shorthaul flights, thereby ensuring that aircraft with more passengers and passengers who have been subjected to a long journey time would have a better chance of being served by airbridges;

(iii) all things being equal, aircraft will be allocated frontal stands on a first come first served basis.

In practice, airlines may for their own operational reasons choose to use a remote stand rather than a frontal stand. There have been occasions on which airlines have chosen to use a remote stand because it is close to the equipment of their ground handling agents, rather than a frontal stand at a location which they consider to be inconvenient to them.

In addition, for operational reasons, scheduling of parking stands has to allow a time gap between the departure of an aircraft and the arrival of another. In case of delay of the arriving aircraft, parking stands might have to be held vacant for a slightly longer period of time. These situations may give rise to an impression of idle airbridges while remote stands are being used.

(b) The AA's statistics show that about 11% of passengers need to use the non-airbridge linked stands which are served by airside buses.

(c) The AA's policy has been to minimize the use of remote stands and its criteria for allocation of stands have taken this into account. At present, the Hong Kong International Airport has 37 frontal stands and 27 remote stands for passenger aircraft. The opening of the Northwest Concourse will increase the number of frontal stands by 11. By then, more aircraft passengers will be able to use airbridges. However, given the air traffic demands at peak times and reasons explained before in relation to (a), there will continue to be a certain percentage of passenger aircraft which will make use of remote stands at the airport.

PRESIDENT (in Cantonese): Mr Bernard CHAN.

MR BERNARD CHAN: We are giving our international travellers an expectation. They are upon arrival to Hong Kong to see one of the most advanced and efficient airports in the world. But I have just been told that there is still at least 11% of passengers who need to use the airside buses. Now, I am sure a lot of you have used the airports in London, New York or even Singapore. Have you ever come across airports using buses? You do. I do not. I mean Paris ─ I did not mention Paris......

PRESIDENT (in Cantonese): Mr CHAN, you should ask your supplementary question now. (Laughter)

MR BERNARD CHAN: Sorry, Madam President, I would like to ask the Administration how they cope with the growing demand of air traffic in the many many years to come. The airport is not just built for today or for 10 years' time. It is for at least 20 years or so. How do they cope with those growing demands to meet the international expectation?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, perhaps I can provide some data for reference about the parking stands in the Hong Kong International Airport compared to those of other countries in the world. Mr CHAN mentioned about the Heathrow in London. 52% of the its stands are airbridge linked, whereas its is 58% in Hong Kong. When the Northwest Concourse is completed next year, the percentage will rise to 64%. So, compared to Heathrow, we actually have a higher percentage. Or we can compare the percentage with the airport in Singapore, in which 64% of the stands are airbridge linked. In other words, after the Northwest Concourse is completed, we will have a percentage comparable to that of Singapore. As regards the future, the existing concourse and the Northwest Concourse on completion will be able to meet demands in the next few years. But as to when another concourse is needed, we will have to leave it to the AA to decide after conducting a detailed review.

PRESIDENT (in Cantonese): Mr Ronald ARCULLI.

MR RONALD ARCULLI: Madam President, I think the question is actually quite timely. But talking about parking bays and empty parking bays, perhaps we should really ask the Secretary who is going to replace the existing AA? Maybe the decision will go on a different plane. But that having been said, I just wonder whether the cost plays a part in the selection by airlines in terms of whether to use the airbridges or to use the buses from remote stands? If so, are we in fact leaving frontal stands empty to the disadvantage of travellers?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, the charge for using airbridge linked stands is $183 per 15 minutes while that for stands not linked with airbridges is $147 per 15 minutes. The minimum charge for one hour for each are $732 and $588 respectively, a difference of only $144. I do not believe that is a reason for airlines not to use the frontal stands. I have answered already why some aircraft cannot use the frontal stands. It is mainly out of operational considerations.

PRESIDENT (in Cantonese): Mr SIN Chung-kai.

MR SIN CHUNG-KAI (in Cantonese): Madam President, I want to follow up on this question. The difference in charges between linked stands and non-linked stands is small. But is the charge for frontal stands different from the charge for remote stands?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, the relevant charges have included all individual fees. If airside buses are used, the charges have included bus charges; and if airbridges are used, the charges have included airbridge charges.

PRESIDENT (in Cantonese): Mr James TIEN.

MR JAMES TIEN (in Cantonese): Madam President, earlier the Secretary explained that the reason for parking stands being left vacant was to allow a time gap. My question is simple. How often are the 37 frontal stands mentioned in paragraph (c) of the main answer left vacant? Is it 30%, 40% or even a higher percentage of the time? If the percentage is very high, will the Secretary arrange for some narrow bodied aircraft to park there?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, I believe if aircraft need to use these stands, they can use any stands, especially during the peak hours. Of course, even if the stands are in heavy use, there will still be time gaps of perhaps half an hour during which the stands seem to be idle but the fact is that a time gap is needed. Even in slower hours, I trust that the parking stands are still fully occupied. When aircraft require the stands, they will be made available.

PRESIDENT (in Cantonese): Mr James TIEN.

MR JAMES TIEN (in Cantonese): Madam President, perhaps my question was not clear enough. Let me explain briefly. The figure can be obtained by multiplying the vacant time in 24 hours by 37.

PRESIDENT (in Cantonese): Secretary, do you have the relevant information?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Perhaps I can provide Mr TIEN with the information in writing. But the most important issue is not whether the parking stands are vacant. When they are vacant, that means no aircraft is using them. In other words, with or without airbridges, these stands are not in use. I will explain this in writing. The most important point is that the AA will utilize the frontal stands as far as possible. (Annex I)

PRESIDENT (in Cantonese): Miss Emily LAU.

MISS EMILY LAU (in Cantonese): Madam President, I share Mr Bernard CHAN's point that travellers come to Hong Kong in anticipation of good services. Although the charges of $183 and $147 do not represent a big difference, but has the Government considered unifying the charges? We do not wish to see airlines using parking stands not served by airbridges for lower costs. Moreover, has anybody complained about the charges being too high? Will the Administration unify the charges to encourage more airlines to use the frontal stands?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, the AA has never heard of any airlines refraining from using non-airbridge linked stands because of costs. The main reason now is not a matter of costs but rather because of operational reasons. That not all passengers can use airbridges is also an international practice. For example, the Heathrow International Airport also adopts this practice under which not all passengers there are served by airbridges.

PRESIDENT (in Cantonese): Mr HO Sai-chu.

MR HO SAI-CHU (in Cantonese): Madam President, although charges are not a big issue but the difference is there. In this circumstance, will the Secretary inform this Council whether the AA will optimize the use of the more expensive parking stands, that is, stands where passengers can alight from the planes directly, so that more revenue is generated and at the same time it will be more convenient to passengers?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, in fact I have already answered this question in my main reply. The policy of the AA is to optimize the overall utilization of frontal stands. Only when all frontal stands are occupied will stands not served by airbridges be used. Since the cost of operating these stands are different, their charges naturally differ.

PRESIDENT (in Cantonese): Mr James TO.

MR JAMES TO (in Cantonese): Madam President, since the difference in the charges is so small, will the Government inform this Council how many scheduled flights opt for the cheaper stands charging $147 for 15 minutes while the counter of their ground handling agents is not located nearby, to the total puzzlement of the AA? Has the AA contacted them to find out whether it is because of the difference of hundred dollars or so?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, we have together with the AA inquired with the airlines in detail and found that they would not refrain from using such stands for costs consideration.

PRESIDENT (in Cantonese): Mr James TO.

MR JAMES TO (in Cantonese): Madam President, I would like the Secretary to tell us how many flights opt for the $147 per 15 minutes stands.

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, perhaps I should supply my answer in writing later after sorting out the supplementary question. Is the Honourable Member asking how many flights voluntarily give up the use of stands served by airbridges and use those non-linked stands? If that is his question, I will answer it in writing. (Annex II)

PRESIDENT (in Cantonese): Mr Howard YOUNG.

MR HOWARD YOUNG (in Cantonese): Madam President, I reckon Members may be surprised but I have been given to understand from individuals that using airside buses takes less time than airbridges. Has the Government made an assessment to find out: Is the time taken by travellers who take the airside bus instead of using the airbridges to reach the immigration counter after alighting from the plane shorter or longer than that taken by those who do the opposite? Has the Government assessed the situation?

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, whether or not airside buses are used depends on the location where the aircraft is parked. The journey takes about three to 15 minutes. I believe many Members have visited the airport and used the airbridges or airside buses. I think that under certain circumstances, it takes less time using the airside buses than walking the long corridor. There is of course the situation that it takes less time to use the airbridges when the airbridges are near the exit. We just cannot generalize all situations.

PRESIDENT (in Cantonese): Fourth question. Miss Cyd HO.

Provision of Professional Psychological Counselling to Students

4. MISS CYD HO (in Cantonese): Madam President, regarding the provision of professional psychological counselling to primary and secondary school students in need, will the Government inform this Council:

(a) in respect of a student receiving such service, of the average number of and length of meetings that he and his parents have with counsellors each month at present;

(b) of the number of students who needed but did not receive psychological counselling in the past three years, together with the reasons for not providing them with such service; and

(c) whether there is any plan to increase the number of counsellors; if so, what the details are?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President,

(a) The Psychological Services Section of the Education Department (ED) mainly provides the following counselling and psychological services:

(1) psychological, social and educational assessment for students;

(2) counselling, study habit training and social skills training;

(3) counselling for parents individually or in groups;

(4) screening and assessment for junior primary students and referral for appropriate remedial and counselling services;

(5) professional support and consultation services to schools on crisis management, casework management and promotion of guidance work; and

(6) teacher training and development.

The nature of counselling work is not only remedial, but also preventive and developmental, the primary aim of which is to promote the personal development and learning of school children. Insofar as casework is concerned, the Department's educational psychologists and educational counsellors deal with all cases referred from the front-line counselling personnel, including Student Guidance Officers/Student Guidance Teachers in primary schools and Guidance Teachers and School Social Workers in secondary schools. Case referrals mainly involve students with learning, emotional or behavioural problems. The mode of follow-up support services comprises individual or small group counselling, assessment service, case conference and discussion with the school teachers or guidance personnel on effective management and follow-up support services. The time spent on interviewing students and parents is primarily for the purpose of diagnosing the problem and offering counselling and more importantly, recommending suitable follow-up services to be undertaken by school teachers, student guidance officers and social workers, who can in their regular contacts with the students, ensure the provision of more effective and longer-term support.

The length of time that an educational psychologist devotes to a student and his parents depends very much on the nature of the case and the mode of follow-up support services. On average, each student and his parents will receive 15 hours of service, spread over a period of several months. As regards the more serious cases, four to five follow-up sessions may be arranged within a month.

(b) The ED is able to provide psychological services to all cases referred. In the past three years, the number of students served in the form of casework support was 5 070. On the preventive side, the "Early Identification Programme" run by the Psychological Services Section also provided 22 300 primary school pupils with detailed assessment service on their learning abilities as well as recommendations on the suitable educational and guidance services.

Other than the Psychological Services Section of the ED, major school sponsoring bodies are also funded by the Government to employ their own educational psychologists. At present, the sponsoring bodies of 102 aided secondary schools and 26 special schools, practical schools and skills opportunity schools have employed educational psychologists to provide counselling services.

(c) There are still 10 vacant educational psychologist posts in the ED and we are continuing with the recruitment work to fill these posts. To attract more prospective candidates to join the profession, we are reviewing the appointment requirements and grade structure of educational psychologist. We will monitor closely the manpower supply situation and the demand for psychological services to determine whether there is any need to create additional educational psychologist posts.

PRESIDENT (in Cantonese): Miss Cyd HO.

Miss Cyd HO (in Cantonese): I should like to follow up on the part on teacher training and development. In view of the fact that we have now 1 100 primary and secondary schools territory-wide but only 22 serving educational psychologists, I do suspect if we could be sufficiently served even after that 10 vacant post have been filled. there have in fact been cases of young people committing suicide in the past, but young people nowadays are burdened with heavier pressure due to the current economic slump. Teachers are front-line workers who have daily contact with the students, but their training at the Institute of education ......

PRESIDENT (in Cantonese): Miss Cyd HO, please come to your supplementary question direct.

Miss Cyd HO (in Cantonese): Here comes my supplementary. The training in psychological counselling that these teachers have received at the Institute of Education might not be enough. In regard to teacher training and development, could the Secretary inform this Council whether the serving educational psychologists have any specific plans to provide training for in-service teachers to help them out; if so, of the content and length of the training course that each teacher is required to take?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, the pre-service training for teachers has in fact included techniques to handle students with learning, emotional or behavioural problems. For instance, the Hong Kong Institute of Education has included appropriate counselling elements in its various training and development programmes for teachers, with a view to further enhancing teachers' abilities in this respect. These elements include pre-service training and other counselling-related items. As for in-service training, a 30-hour elective course on counselling is also available at the Institute for interested serving teachers. In addition, the Institute has started a four-year degree course in education this year and counselling is a compulsory subject for the last two years of study. The number of hours spent in this respect is a considerable 210, representing 11.7% of the entire length of the course. As for the existing certificate courses, about 13% to 16% of the total training time has already been devoted to educational psychology and counselling. We have always attached great importance to this aspect.

In this connection, the ED has also provided relevant courses for teachers such as in-service short-term training, school-based teacher training for individual schools, talks, seminars, workshops and so on, with a view to enhancing the teachers' ability in counselling students. Indeed, all serving teachers would have the opportunity to take part in these training courses. In addition, the Department will, taking account of requests from schools and their specific needs, invite its educational psychologists to conduct school-based workshops for the benefit of enhanced teacher training. Perhaps I should like to supplement some information here, since the Honourable Miss Cyd HO is very much concerned about the training of front-line teachers. In fact, Student Guidance Officers in primary schools will be given full-time training for 110 days during their first year at the posts. This is very important because they will be acquiring basic counselling techniques and the knowledge necessary for providing the school-based mode of counselling services. Apart from that, during their second and third years at the posts, Student Guidance Officers and Student Guidance Teachers are also required to take a one-day course every month to consolidate and enhance their knowledge and ability in providing counselling services. Then in the fourth year, they still have to take a 24-day refresher course which aims at bolstering their confidence at work and better preparing them for co-ordinating and developing the counselling work in their primary schools.

As regards secondary schools, the Department has commissioned the local tertiary institutions to offer in-service training in counselling for Guidance Teachers in secondary schools since 1986. In the 1998-99 academic year, which is the current school year, we are now conducting a total of four one-year part-time certificate courses in school counselling services. By the end of the school term, the number of teachers who have received such training would amount to more than 1 363, representing an average ratio of three teachers per school. Apart from training in the above respects, the Department will also arrange short-term courses for Guidance Teachers specific to their needs. In regard to the workshops I have referred to just now, we will be offering 10 short-term training courses on counselling for the 1998-99 academic year, including four three-day courses entitled "Workshop on helping students cope with stress", four three-day courses known as "Personal growth group", as well as two three-day workshops entitled "Workshop on enhancing self-esteem". Thank you, Madam President.

PRESIDENT (in Cantonese): Miss Cyd HO.

Miss Cyd HO (in Cantonese): Madam President, all I have heard just now was a series of figures ......

PRESIDENT (in Cantonese): Miss Cyd HO, which part of your supplementary has not been answered by the Secretary? If not, I cannot permit you to raise another supplementary now; you have to wait in the line for your turn.

Miss Cyd HO (in Cantonese): I will wait for my next turn then.

PRESIDENT (in Cantonese): Mr CHEUNG Man-kwong.

Mr CHEUNG Man-kwong (in Cantonese): Madam President, so far only 128 schools are able to employ educational psychologists. Could the Secretary inform this Council whether those schools that are unable to employ educational psychologists would be provided with some school-based service on a rotational basis a la School Social Workers, so that these schools could resolve within the school premises some of the psychological problems of their students directly?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, the ED is prepared to provide support for those sponsoring bodies which are not qualified for employing their own educational psychologists; in particular, we will be pleased to offer help to these schools in regard to crisis management. The Psychological Services Section of the Department is also ready to provide services in fields of emergency support, case referral and training.

PRESIDENT (in Cantonese): Mr CHEUNG Man-kwong.

Mr CHEUNG Man-kwong (in Cantonese): The Secretary has not directly answered my supplementary on whether school-based services could be provided on a rotational basis.

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, we could and in fact presently provide such kind of rotational services for special schools at the moment.

PRESIDENT (in Cantonese): Mr CHEUNG Man-kwong.

Mr CHEUNG Man-kwong (in Cantonese): I regret to say that the Secretary is still being evasive. My supplementary asked about all schools, not just special schools.

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, insofar as mainstream schools are concerned, the services we provide would generally include emergency support, case referral and training. These are the three major areas that we are now working on.

PRESIDENT (in Cantonese): Mr YEUNG Yiu-chung.

Mr YEUNG Yiu-chung (in Cantonese): Madam President, part (b) of the main reply mentioned that 102 secondary schools could enjoy the relevant services. My supplementary is: Why could such services not be extended to primary schools as well? Is it because of insufficient resources or is it because primary schools do not need such services? Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, for primary schools, we have already have Student Guidance Officers; besides, I have also given an detailed account of the training and refresher courses for these Officers just now. We believe, with 229 Student Guidance Officers, primary schools should be sufficiently supported in this connection.

PRESIDENT (in Cantonese): Mr LAW Chi-kwong.

Mr LAW Chi-kwong (in Cantonese): Madam President, my supplementary goes in a similar vein though I am asking about part (c) of the main reply. Will the Government consider further enhancing the school social worker programme when it reviews the need to increase the number of counselling personnel in future?

PRESIDENT (in Cantonese): Mr LAW Chi-kwong, the main question is on professional psychological counselling, as for psychologists ......

Mr LAW Chi-kwong (in Cantonese): Madam President, school social workers will also provide psychological counselling services. (Laughter)

PRESIDENT (in Cantonese): Well you may say that.

Secretary for Education and Manpower (in Cantonese): Madam President, school social workers are basically financed by the Social Welfare Department and are the responsibility of the Department. We believe the present ratio is sufficient and that there is no need to implement the one social worker for each school proposal for the time being. As a matter of fact, different schools will have different needs, adopting the proposed ratio may not necessarily be the best solution.

Mr LAW Chi-kwong (in Cantonese): Excuse me, but I am afraid the Secretary has misunderstood my supplementary. I was asking whether the Government would consider providing school social workers with primary schools.

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, as I said before, most of the cases in primary schools would be resolved by the Student Guidance Officers. Generally speaking, most of the problems in primary schools are related to learning and classroom discipline, and our well trained and experienced Student Guidance Officers should be capable of providing suitable services for the students, their parents and teachers. Indeed, out of the cases handled by Student Guidance Officers over the past three years, only 3% needed to be referred to social workers for follow-up. In other words, our Student Guidance Officers are all competent at their work.

PRESIDENT (in Cantonese): Miss Emily LAU.

Miss Emily LAU (in Cantonese): Madam President, the Secretary said in the main reply that there are still 10 vacant educational psychologist posts in the ED. In this connection, are there any great difficulties in recruitment? Besides, the Secretary has also mentioned about reviewing the appointment requirements. Would that imply the Government is considering lowering the requirements?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, the Honourable Member has raised a very good question, since the biggest problem we now have is related to the appointment requirements. We have difficulties in recruiting such staff mainly because the market cannot offer us such people. The existing requirements might perhaps have been set at too high a level, since we require the right candidates to have a master's degree in psychology in addition to a first degree in the discipline. In addition to a diploma in education, the right candidate should have a number of years of practical post-qualification experience. Therefore, our requirements may be regarded as too high by the market, especially when compared to that for clinical psychologists which requires a master's degree only. For this reason, we are now consulting the Hong Kong Psychological Society and holding discussions with the Civil Service Bureau, with a view to adjusting the requirements flexibly without sacrificing the quality of services, thereby filling expeditiously the 10 vacant posts to enhance our front-line service further.

PRESIDENT (in Cantonese): Mr Michael HO.

Mr Michael HO (in Cantonese): Madam President, part (c) of the main reply has referred to the question of appointment requirements and the grade structure of educational psychologists. In this connection, I could recall that a Legislative Council Panel discussed at least three to four years ago the appointment requirements to which the Secretary referred just now. My supplementary is: Why has the review yet to be completed after so many years; when will the Government complete reviewing the requirements; and when will it put forward formal proposals to the Standing Commission on Civil Service Salaries and Conditions of Service?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, just now I have mentioned that we are now consulting the Hong Kong Psychological society and holding discussions with the Civil Service Bureau since we have entered a rather mature stage. We believe we could put forward our proposal to the relevant bodies for further consideration very soon.

PRESIDENT (in Cantonese): A number of Members still wish to raise their supplementary questions, including Miss Cyd HO. However, in view of the time constraint, I am afraid we have to move on to the fifth question. Miss CHAN Yuen-han.

Provision of Passageways for Physically Handicapped Persons

5. MISS CHAN YUEN-HAN (in Cantonese): Madam President, regarding the provision of passageways for physically handicapped persons, will the Government inform this Council:

(a) whether it has plans to carry out improvement works on pedestrian ways which do not have kerb ramps at present; if so, what the specific timetables are;

(b) whether it has plans to carry out improvement works on pedestrian footbridges, pedestrian subways and passages which do not have passageways for physically handicapped persons at present; and to install indication signs on those facilities on which improvement works cannot be carried out, or those which have passageways for physically handicapped persons on one side only; and

(c) in view of the fact that the relevant code of design practice which was implemented last year is not applicable to buildings which were completed before the code came into effect, whether the Administration will encourage owners of these buildings, through the provision of an allowance, to improve the facilities for physically handicapped persons at their buildings?

PRESIDENT (in Cantonese): Secretary for Transport.

SECRETARY FOR TRANSPORT (in Cantonese): Madam President,

(a) Dropped kerb has been made a standard provision for all new pedestrian crossings. For existing pedestrian crossings which do not yet have dropped kerbs, they will be provided in conjunction with road maintenance and reconstruction projects which average about 40 per year. In addition, about 400 dropped kerbs are provided every year at existing crossings outside the road maintenance and reconstruction programme to meet requests made in respect of individual crossings which are frequently used by disabled persons. In the last 12 months, 434 dropped kerbs have been constructed in response to such request from the public. Priority will be given to crossings located in the vicinity of major public transport terminals and facilities frequently used by the disabled.

(b) For newly constructed footbridges and subways owned by the Government, ramps for the disabled will normally be provided. If a ramp cannot be provided owing to site constraints, and a reasonably convenient alternative crossing point is not available, consideration may be given to the provision of a lift for the disabled. For privately owned footbridges and subways, the Government will stipulate a mandatory requirement in the lease conditions for the owner to provide 24-hour access to the disabled through the property development if they are connected to footbridges and subways with facilities for the disabled. Site constraints sometimes make provision of ramps on existing footbridges and subways on one end or both ends impractical. There are 53 footbridges and subways which have access facilities only at one end. A programme is now in hand to put up advisory signs at these footbridges and subways to alert the disabled persons and advise them the direction to the most convenient alternative crossings. It is expected that the programme will be completed in about 12 months.

(c) Although the code of design practice cannot be applied to buildings completed before it came into effect, the Building Authority is empowered by the Building (Planning) Regulations and the Disability Discrimination Ordinance not to approve building plans for alterations and additions to an existing building unless the person seeking approval satisfies him that access for persons with a disability as is reasonable in circumstances to the building will be provided. We envisage access to existing buildings will be gradually improved. It should be noted in many existing buildings it is not the lack of money but technical constraints which make it difficult for them to be upgraded for the easier access of persons with a disability unless they undergo major alterations. The Administration does not consider it appropriate to offer monetary allowance to owners of private property for such alterations.

PRESIDENT (in Cantonese): Miss CHAN Yuen-han.

Miss CHAN Yuen-han (in Cantonese): Madam President, the Government has not indicated whether there are any specific timetables. Should the Government give me an affirmative answer later on, I should like to know if it would consider expediting the implementation, bearing in mind that a large number of people are still unemployed and so doing could provide more job opportunities for many of them; but if I receive a negative answer, I should like to know the reason why.

PRESIDENT (in Cantonese): Secretary for Transport.

Secretary for Transport (in Cantonese): Madam President, actually we will review the road maintenance and reconstruction needs from time to time. As a matter of fact, different roads will have different maintenance and reconstruction needs, depending on the volume of pedestrian traffic. However, major roads would require maintenance or reconstruction in 15 to 20 years' time. As I said earlier, about 400 road maintenance and reconstruction projects will be implemented each year; our standing projects will normally be proceeded with at this pace. As regards other items of work, we will also provide dropped kerbs outside the road maintenance and reconstruction programme to meet requests made by members of the public.

PRESIDENT (in Cantonese): Miss CHAN Yuen-han.

Miss CHAN Yuen-han (in Cantonese): The reply provided by the Secretary has not addressed my supplementary at all. Could the Secretary inform this Council whether he was implying that the Government did not have any specific timetables?

PRESIDENT (in Cantonese): Secretary for Transport.

Secretary for Transport (in Cantonese): Madam President, if the Honourable Member's supplementary was on whether the Government has any specific timetables for road maintenance and reconstruction projects territory-wide, the answer is a simple "no", because there are roads that are less used by pedestrians and hence do not need to be repaired or reconstructed very frequently. But for the major roads in the urban area, we will review their respective maintenance and reconstruction needs every year and schedule the necessary maintenance and reconstruction works in accordance with their respective estimated lifespan.

PRESIDENT (in Cantonese): Mr TAM Yiu-chung.

Mr TAM Yiu-chung (in Cantonese): Madam President, could the Secretary inform this Council whether the Government has any undisclosed figures indicating the number of pedestrian crossings that should have dropped kerbs but the construction work has yet to be conducted?

PRESIDENT (in Cantonese): Secretary for Transport.

Secretary for Transport (in Cantonese): Madam President, in fact a total of 2 250 pedestrian crossings have already been provided with dropped kerbs. As regards the number of locations which require but have yet to be provided with dropped kerbs, it would all depend on the actual needs, since there are so many pedestrian crossings territory-wide. Indeed the requests for provision received before September this year have all been met.

PRESIDENT (in Cantonese): Mr Fred LI.

Mr Fred LI (in Cantonese): I should like to follow up on part (c) of the main question. There are still a number of government buildings that do not have any passageways for physically handicapped persons, some of which are service buildings like post offices and police stations where the public would need to visit. In this connection, could the Secretary inform this Council whether the Government has any figures on number of government properties that have yet to be provided with passageways for physically handicapped persons; and whether the Government has any plans to take the lead and set a specific date by which all government buildings should be fully equipped with facilities for physically handicapped persons?

PRESIDENT (in Cantonese): Secretary for Transport.

Secretary for Transport (in Cantonese): I am afraid I do not have such information on hand, and I believe the Secretary for Planning, Environment and Lands, who is also attending the meeting, does not have that with him either. I will provide the Honourable Fred LI with the information in writing after the meeting. (Annex III)

PRESIDENT (in Cantonese): Mr CHAN Kwok-keung.

Mr CHAN Kwok-keung (in Cantonese): Madam President, although the Government introduced the relevant code of practice last year to require newly constructed buildings to provide passageways and other facilities for physically handicapped persons, the Buildings Department only inspect on average one building per month. In this connection, could the Secretary inform this Council whether the Government consider it necessary to spend more time on building inspections; and of the number of buildings found breaching the relevant requirement by not providing passageways for physically handicapped persons during the inspections?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

Secretary for Planning, Environment and Lands (in Cantonese): Madam President, I should like to clarify the meaning of "inspection" first. Since the code of practice is applicable only to newly constructed buildings, in examining the building plans, the Building Authority will check if the plans have already included such facilities; as such, the so-called site visits are not conducted to inspect the newly completed buildings; most probably such visits are conducted after complaints have been received. On the other hand, although the code of practice does apply to buildings completed before it came into effect, the Building Authority is empowered to require the installation of such facilities be included in the building plans for alternations, additions and so on under reasonable circumstances before approving the relevant plans. the kind of "inspection" referred to by the Honourable Member might be related to those cases in which the property owners or management companies have not properly made those necessary facilities installed during the building alternation process available to the physically handicapped persons, thus upon receipt of complaints, the Building Authority will then conduct site vists to inspect the relevant buildings.

PRESIDENT (in Cantonese): Mr Albert HO.

Mr Albert HO (in Cantonese): Madam President, part (b) of the main reply has referred to a programme under which footbridges and subways which have access facilities for the physically handicapped at one end only will be equipped with the necessary facilities on the other end within 12 months' time. Could the Secretary inform this Council of the length of time which has lapsed since that "12-month period" began, or of the length of time we still have to wait before such facilities could finally be provided? Just now the Secretary told us that the programme was expected to be completed in about 12 months, how much longer would it take to complete the work from now; and whether the Government will consult district boards upon the completion of those 53 passageway projects to see if any other locations still have such need, so as to carry on with the programme to provide passageways for physically disabled persons on both ends of footbridges and subways when circumstances permit?

PRESIDENT (in Cantonese): I have indicated clearly at the beginning of the meeting that Members should not ask more than one supplementary at a time, but Mr Albert HO has raised two just now. In order to save time, could the Secretary try to answer the two supplementaries together?

Secretary for Transport (in Cantonese): Madam President, perhaps I need to make a clarification. The 12-month programme I referred to earlier was one implemented to put up advisory notice or signs at those footbridges and subways which can and actually have access facilities at one end only but not the other to alert the disabled persons of the possible difficulties they may encounter at the other end, as well as to advise them of the location of access facilities nearby. The programme to put up those notices or signs is 12 months and is scheduled to be completed within 12 months from now.

As regards the second question, we would of course consult the district boards on issues regarding the needs of physically disabled persons. However, I should like to point out that in many cases, it is due to the site constraints that no access facilities for physically disabled persons could be provided. For instance, some pedestrian ways are either too narrow or located on slopes that are too steep to meet our requirements, and in other cases, we might have difficulties linking the facilities with private buildings. Nonetheless, we will certainly consult the district boards in this connection.

PRESIDENT (in Cantonese): Mr LAU Kong-wah.

Mr LAU Kong-wah (in Cantonese): Madam President, according to part (c) of the main reply, private buildings might have more difficulties in this respect, I would therefore like to know if all passageways in those public housing estates run by the Government or the Housing Authority have been fully equipped with access facilities for physically disabled persons?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

Secretary for Planning, Environment and Lands (in Cantonese): Madam President, for all newly constructed buildings, residential buildings or otherwise alike, if there are possibilities that physically disabled persons would visit the place and not be discriminated against there, they are required to provide passageways and facilities for physically disabled persons. The present problem lies in those buildings completed before the Code of Practice came into effect, since the building design or site constraints may make it impossible for them to make additions or undergo major alternations. Nevertheless, these buildings are required by law to provide access facilities for physically disabled persons when they undergo other alternation works. In this connection, the existing legislation has already provided a mechanism for persons with a disability to lodge complaints with the Equal Opportunities Commission should they consider themselves being discriminated against in respect of access to places. Upon receipt of complaints, the Commission will investigate into the matter; and if necessary, the investigations will be conducted jointly with the Building Authority.

PRESIDENT (in Cantonese): Mr HO Sai-chu.

Mr HO Sai-chu (in Cantonese): Madam President, I should like to follow up on part (a) of the main reply. It seems that the Secretary has been unable to provide figures in his replies to certain supplementaries. I understand that those figure might be rather big, but the Government should at least try to estimate the number of dropped kerbs that have yet to be made. The figure in this respect may still be very big, but with the Government providing some 400 dropped kerbs per year, we would at least know that the programme could be completed in 10 or 100 years' time. The importance we attach to the issue depends to a large extent on the need to strike a balance under the circumstances. For this reason, even though the calculation method would be very complicated, we would still want to have at least an approximate figure. Could the Secretary do that for the Council?

PRESIDENT (in Cantonese): Secretary for Transport.

Secretary for Transport (in Cantonese): Madam President, I will see if we could provide some information in writing. (Annex IV)

PRESIDENT (in Cantonese): Mr LAW Chi-kwong.

Mr LAW Chi-kwong (in Cantonese): Madam President, my supplementary is quite similar to that raised by Mr Fred LI. Perhaps the public officers may not be able to provide me with an answer right away, but I still hope they could give me a written reply. My supplementary is: Other than government buildings, how many of the premises or offices rented by the Government open to frequent visits by the public have yet to provide access facilities for persons with a disability and fail to comply with the existing requirements?

PRESIDENT (in Cantonese): Secretary for Transport.

Secretary for Transport (in Cantonese): Madam President, I will provide the information in writing. (Annex V)

PRESIDENT (in Cantonese): Last supplementary. Miss CHAN Yuen-han.

Miss CHAN Yuen-han (in Cantonese): Madam President, as referred to in part (c) of the main reply, the Government does not want to offer monetary allowance to owners of private property to carry out alternations due to certain technical constraints. In this connection, I am afraid the Government is employing double standards. I should like to remind the Government that owners of private property could apply for allowance to carry out external wall works, since it has set up a fund for the purpose. Why could those projects be funded but not the ones in question? Why is the Government employing two sets of standards. Is it because it believes persons with a disability could be neglected?

PRESIDENT (in Cantonese): Secretary for Planning, Environment and Lands.

Secretary for Planning, Environment and Lands (in Cantonese): Madam President, the main question was on the provision of an allowance to encourage owners of private property to provide the relevant facilities. Insofar as I understand it, "allowances" are cash grants. However, the monetary resources provided for owners to improve the buildings as referred to by the Honourable Member are not allowances; they are loans provided by the Government for the said purposes. The owners have to repay the loans to the Government eventually. However, should any buildings need to apply to the loan scheme for building improvement, the scale of the improvement project would be taken into account, and in some cases the projects would be consider as reconstructions or major alternations, if so, they would then be subject to the Building (Planning) Regulations and the Disability Discrimination Ordinance and required to include the provision of access facilities for persons with a disability. In that case, the owners could include the provision of such facilities as one item of work under the relevant projects in their loan applications.

PRESIDENT (in Cantonese): Last question seeking an oral reply. Mr CHAN Kwok-keung.

Occupational Safety and Health in Hospitals

6. MR CHAN KWOK-KEUNG (in Cantonese): In relation to the occupational safety and health of employees of the hospitals under the Hospital Authority (HA), will the Government inform this Council:

(a) of the number of random inspections carried out by the Administration in the past two years in regard to the HA's supervision of its hospitals in the compliance with the Occupational Safety and Health Regulation (the Regulation); whether any prosecutions have been instituted in relation to cases of non-compliance; if so, of the number of these prosecutions;

(b) of the total amount of employees' compensation arising from injury at work and the total number of days of sick leave granted to the employees of these hospitals in the past two years; and

(c) whether it has assessed if the existing ward design and layout of the hospitals may constitute potential risk to employees involved in manual handling operation; and of the measures taken to reduce such risk?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, the Regulation, which was gazetted on 20 June 1997, provides for standards on the general safety, health and welfare as well as manual handling operations in the non-industrial workplaces for the first time. In order to allow sufficient time for employers and employees to familiarize themselves with the requirements of the new regulation, the Administration provided a grace period for its implementation. The main body of the Regulation came into effect on 1 January 1998 while the part on manual handling operations came into effect on 1 July 1998.

(a) Hospitals are complex workplaces where a wide range of facilities are housed and activities conducted. Based on overseas experience, the Labour Department considers that, for the purpose of the HA's supervision of its hospitals in compliance with the Regulation, it will be more efficient and cost-effective to conduct a structured inspection programme of the safety and health management system in the hospitals under the HA rather than through random inspections. This approach has the full support of the HA.

Each inspection to a hospital involves a multi-disciplinary team from the Labour Department and, depending on the size of the hospital, takes about two to four working days to complete. It covers a briefing by hospital management, documentation check and an on-site inspection of a number of selected workplaces to verify the extent of implementation of the system by front-line staff.

Since July this year, nine hospitals have been inspected. According to our agreed schedule, the remaining 33 hospitals and two institutions under the HA will be inspected by May 1999.

This new multi-disciplinary approach is intended to encourage self-regulation at the enterprise level and is in keeping with the Government's new policy direction in managing workplace safety and health. The emphasis is on assisting the hospitals to put in place a safety management system. However, once the system is fully operational, surprise checks and enforcement on compliance with the relevant regulation will follow. In the meantime, however, we will take necessary enforcement action against a hospital if any blatant disregard of the law is found.

(b) According to the Labour Department's record, hospitals under the HA reported a total of 2 970 cases with sick leave exceeding three days under the Employees' Compensation Ordinance between January 1997 and October 1998. Of these, 1 766 cases were resolved, involving a total compensation amount of $17.55 million and 22 503 sick leave days.

(c) We agree that poorly designed or congested wards may cause workplace injuries to staff while undertaking manual handling operations. In the nine hospitals inspected so far, no such imminent risks were observed. We noted also that in order to enhance safety awareness among employees and to minimize the risk of occupational injuries, improvement measures were being taken in individual hospitals, such as the publication of guidelines and educational pamphlets on manual handling, structural modifications to bathrooms and toilets, the trial use of different models of mechanical aids for patient handling, and the phased replacement of standard hospital beds with height-adjustable ones. We understand that as a longer-term objective, the HA is committed to providing adequate mechanical aids to reduce the risks of manual handling. On the training side, some 150 HA staff have been trained up so far under a special programme. They have in turn trained about 1 500 front-line supervisors in the assessment of risks associated with manual handling. These supervisors are responsible for training nurses, ward assistants and other staff on proper manual handling techniques and the correct use of these mechanical aids in various hospitals. Most of the front-line staff are expected to have received such training by early next year.

PRESIDENT (in Cantonese): Mr CHAN Kwok-keung.

Mr CHAN Kwok-keung (in Cantonese): Madam President, some hospitals have to increase the number of beds to cater for the patients' needs. According to some trade unions, some hospitals have even increased the number of beds from 32 per ward to 50 per ward with all the additional iron beds being accommodated along the narrow passageways, thereby making the medical staff and other people working there vulnerable to injuries. Could the Secretary inform this Council whether the Government has formulated any internal guidelines regarding the number of beds and safety facilities for staff members; and whether there are any guidelines regarding fire hazards?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, in addition to the management committee on Occupational Safety and Health, an Occupational Safety and Health Co-ordinator has also been placed in each and every hospital to co-ordinate efforts in this connection. With regard to the situation to which the Honourable CHAN Kwok-keung referred just now, we would very much concerned ourselves with the matter if that is really the case, since people will be easily injured by the metal beds in congested wards. Therefore, we have advised the hospitals concerned to improve the situation as far as practicable and to take the necessary actions promptly during our general inspections. Regarding the problem of passageway blockage referred to by Mr CHAN, we have already provided the hospitals with the relevant guidelines. In fact, hospitals are provided with guidelines in various aspects. Through the Management Committee, the HA has instructed each and every hospital the proper procedures to handle the various situations; besides, booklets containing such procedures have also be published for the hospitals' reference. I have in fact referred to the provision of guidelines in my main reply just now.

PRESIDENT (in Cantonese): Dr TANG Siu-tong.

DR TANG SIU-TONG (in Cantonese): Madam President, as referred to by the Secretary in part (b) of the main reply, 1 766 cases of claims under the Employees' Compensation Ordinance have been settled, involving a total compensation amount of $17.55 million and 22 507 sick leave days. In regard to the average number of sick leave days which amounts to 15 per case, I should like to know under what circumstances had the relevant staff members been injured that they needed to take such a long time to rest?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, generally speaking, in most of the cases the staff members suffered from back pains and low back pains, which means they have injured their backs; and the technical term for that is tendonitis. Since the injury involved are mostly spraining and crushing, recovery would take quite some time.

PRESIDENT (in Cantonese): Mr LEE Kai-ming.

Mr LEE Kai-ming (in Cantonese): Madam President, we all know that a hospital is a labour-intensive workplace. In regard to the 22 503 days of sick leave referred to in part (b) of the main reply, which is a rather substantial figure, are there any replacements for the employees on sick leave? Should there be no replacements, would the work of the employees involved be shared among their colleagues?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for EDUCATION and MANPOWER (in Cantonese): Should there be employees who need to take sick leave, the HA will make arrangement for appropriate staff members to take care of the workload involved. This is also one of the areas that the Management Committees on Occupational Safety and Health need to look into.

PRESIDENT (in Cantonese): Mr CHAN Wing-chan.

Mr CHAN Wing-chan (in Cantonese): Madam President, I would also like to follow up on part (b) of the main reply which has indicated that 1 766 of the 2 970 cases of injury at work have been settled. According to my understanding, there should not be any problem if the injured employees are provided with sick leave and compensations under the Employees' Compensation Ordinance; why then should there be any cases that need to be settled? Was it because the HA has to settle those cases brought to court due to its failure to compensate the relevant employees in accordance with the Ordinance?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, perhaps I should apologize for the misunderstanding. However, if Honourable Members had listened carefully to the main reply I gave just now, they should have heard I said the 1 766 cases were resolved. The term "settled" as appeared in the written copy of the main reply was a mistake which should but has yet to be rectified, since I was not referring to any settlement at all. The Honourable CHAN Wing-chan was right to point out that the cases should be "resolved" if we have handled the cases in accordance with the provisions under the Ordinance. As a matter of fact, I have also said so in my main reply.

PRESIDENT (in Cantonese): Mr CHAN Wing-chan.

MR CHAN Wing-chan (in Cantonese): Madam President, could more accurate papers be provided in the future to avoid misleading the Council? In our understanding, only court cases would need to be "settled".

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, we will make sure papers issued in the future be accurate and mistake-proof. I am sorry that we were unable to revise the terms involved and circulate the rectified document to Honourable Members due to the time constraint. I should like to stress again that there would not be any misleading terms in our papers in the future.

PRESIDENT (in Cantonese): Mr Michael HO.

Mr Michael HO (in Cantonese): Madam President, the Secretary has referred to back and low back pains in his reply to a supplementary just now. He has also mentioned that back and low back pains are one of the reasons why employees would take so many days of sick leave. In this connection, could the Secretary inform this Council whether the Government would consider including back and low back pains as an occupational disease in view of the data collected so far; if not, of the number of cases needed to support the inclusion of such pains as an occupational disease?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, we are fully aware of the problem and are looking into the situation with a view to actively addressing it in the same direction as suggested by the Honourable Member.

PRESIDENT (in Cantonese): Mr Michael HO.

Mr Michael HO (in Cantonese): My supplementary was on the number of cases that could convince the Government of the need to consider including back and low back pains as an occupational disease, which should be a further step beyond active consideration.

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, we have not specified any figures as the basis for consideration at the present stage; however, I could promise Honourable Members that we will take active actions to follow up on the matter.

PRESIDENT (in Cantonese): Mr LEE Cheuk-yan.

Mr LEE Cheuk-yan (in Cantonese): Madam President, part (c) of the main reply said in the nine hospitals inspected so far, no such imminent risks were observed. Could the Secretary inform this Council of the facts that the Government has observed; and of the reasons behind the large number of tendonitis cases that the Government has observed? In regard to the cases of tendonitis and back and low back pains the Secretary has referred to just now, has the Government observed from such cases anything unusual or any potential risks?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): We have inspected nine hospitals and found their situations satisfactory. There are of course much room for improvement though. In regard to the injuries related to manual handling, in most cases the problems have to be dealt with by both the employers and the employees concerned. In this connection, staff members could easily get injuried when transporting the patients, bathing them or helping them turn over or get down from their beds. Therefore, I have referred in my main reply just now that the HA has been considering actively the possibility of installing additional facilities to help the employees out. For instance, geriatric ward beds will be equipped with height-adjustment devices for the elderly patients to adjust the height of the beds with ease during meal-time, or electrical devices will be installed to raise the beds so as to obviate the need for manual handling. In addition, frames or devices similar to small cranes may be installed in future to transport the patients from their beds to wheel chairs when taking them to the bathroom for bathing. The study into these proposals are now in full swing. All the HA needs now is more time. In the meantime, they are now inviting tenders for the relevant projects, with a view to collecting more information for the comprehensive improvement to the mechanic equipment of all hospitals.

PRESIDENT (in Cantonese): Miss CHAN Yuen-han.

Miss CHAN Yuen-han (in Cantonese): Madam President, part (b) of the main reply pointed that there have been a total 2 970 cases with sick leave exceeding three days over the past 22 months. Could the Secretary inform this Council of the number of cases with sick leave less than three days during the same period? With 2 970 cases of injury at work over 22 months, that would mean an average of 135 cases per month, which is a considerably high figure; as such, I really could not understand why the Secretary has found the situation so far satisfactory. I am really very much surprised. Could the Secretary inform this Council of the number of cases requiring sick leave of less than three days; and whether the objective situation in reality is as good or as satisfactory as referred to in the main reply?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, regarding the number of cases involving sick leave of less than three days, I am sorry to say that we have only the 1998 figures, since our computer data for the year 1997 was not complete. From January to October 1998, 1 065 cases of injury at work with sick leave less than three days have been reported, involving a total compensation amount of $1.07 million. These are the data we have in this respect.

PRESIDENT (in Cantonese): Miss Cyd HO.

Miss Cyd HO (in Cantonese): Madam President, of the 2 970 reported cases referred to in part (b) of the main reply, how many have been determined as being rendered permanently disabled or suffering from a 100% loss of working capacity?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, I do not have at hand the detailed information in that respect. However, according to our initial understanding, there have not been any cases involving permanent disability, since the employees were able to resume duty after taking some long leave. We will confirm the information later and provide the Honourable Miss Cyd HO with an written reply. (Annex VI)

PRESIDENT (in Cantonese): Mr Michael HO.

Mr Michael HO (in Cantonese): In regard to the figures of injury at work, could the Secretary inform this Council whether there are any data showing how we compare with hospitals overseas; and whether our number of injury at work cases would be considered normal or too high for an institution with 50 000 employees?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, I do not have the information at hand. However, I could inform Honourable Members that after contacting my colleagues at the Labour Department, I have gathered an impression that we are neither the best nor the worst in that respect; we are somewhat in the middle of the road. There are still a lot of work that we need to do, and for this reason, we should never be self-complacent. In this connection, we need to observe the standard of all hospitals in a comprehensive manner, and we hope to complete our inspection of all hospitals under the HA by May next year.

PRESIDENT (in Cantonese): Mr Michael HO.

Mr Michael HO (in Cantonese): My supplementary was on the specific data, not on the general impression. Could the Secretary provide this Council with some data?

PRESIDENT (in Cantonese): Secretary for Education and Manpower.

Secretary for Education and Manpower (in Cantonese): Madam President, as I said before, I do not have any data at hand. However, I will provide the Honourable Member with that after the meeting. Just now I have referred to my impression because I wanted to supplement Members with information concerning my initial view of the situation. (Annex VII)

PRESIDENT (in Cantonese): I understand that a number of Members still wish to raise their supplementaries. However, since we have already spent more than 17 minutes on this question and our question time has in fact long exceeded the scheduled one and a half hours, I wish Members would follow up on the matter through other channels.

WRITTEN ANSWERS TO QUESTIONS

Trading Activities of Local London Gold

7. MR LEE CHEUK-YAN (in Chinese): It is reported that there is an upward trend in the number of fraud cases in Hong Kong involving the trading of local London gold. In this connection, will the Government inform this Council:

(a) of the total number of complaints received over the past two years about fraudulent practices in the trading of local London gold, and the average amount of money involved in each case;

(b) whether any prosecutions have been instituted by the authorities in connection with these complaints; if so, of the number of such prosecutions and the average penalty imposed on the convicted persons; if not, why not; and

(c) whether it has plans to introduce legislation to step up the regulation of the trading activities of local London gold, if so, of the specific timetable for introducing such legislation; if not, why not?

SECRETARY FOR FINANCIAL SERVICES (in Chinese): Madam President,

(a) The requested information is given in the table below:

	1996	1997	19981
No. of complaints received by the police	142	129	161
Average amount involved per complainant	$150,000	$270,000	$150,000

(b) The police have conducted investigations into all complaints where there is prima facie evidence of illegal activities. Currently, police investigations into a total of 23 companies are still on-going. Arising from these investigations, the police have taken prosecution action in two cases: One in 1996 in which one person was convicted under the Protection of the Investors Ordinance² (Cap. 335) and was fined $75,000; and another one currently being charged under the same Ordinance. The hearing date of the latter case is being fixed.

(c) The Loco London Gold market was established in Hong Kong in the mid-1970s and has since been operating effectively. Currently, it is the largest London gold trading centre for Asia and the rough market estimates as at end 1997 suggested a turnover of about US$190 million per day, or about seven times of the daily turnover of the Chinese Gold and Silver Exchange Society.

1 Up to September.



2 Charged with one count of "recklessly to induce persons to invest money" under section 3(1)(b) of the Protection of the Investors Ordinance.

As in the case of other major London gold trading centres such as New York and London, the Loco London Gold market in Hong Kong is essentially unregulated. It is a highly sophisticated market where trades are conducted almost exclusively among a group of seasoned and specialized traders and essentially at the wholesale level. Currently, the local market has about 70 active players with no restriction on access to new entrants.

Complaints against trading of Loco London gold are primarily concerned about fraudulent and deceptive activities mostly in the form of employment traps in the disguise of Loco London gold rather than the trading system of the genuine market itself. These malpractices are already covered by the Theft Ordinance (Cap. 210) enforceable by the police and may lead to criminal punishments upon conviction. Where the "fraudsters" make fraudulent or reckless misrepresentation to induce other persons to trade in Loco London gold, they might also be caught by the Protection of Investors Ordinance.

Given the nature of the genuine Loco London Gold market and the fact that the complaints are essentially suspected cases of frauds with no relation to genuine London Gold trading, the Administration's view remains that the best solution to the problem lies in public education, instead of regulation over the genuine market itself. In this context, considerable efforts have been made to increase public awareness of fraud cases in relation to Loco London gold trading. These include issuing press release and booklets, and organizing seminars on a regular basis to alert job seekers of the various forms of employment traps, including those in Loco London gold and other financial investment. Television programmes such as "Police Call" and general investor education programmes produced by the Securities and Futures Commission also remind the public of frauds and investment traps under the disguise of Loco London gold trading.

The Financial Services Bureau has also produced a pamphlet specifically listing out the commonly seen fraudulent activities in relation to Loco London gold trading. The pamphlets have been distributed to the public through District Offices, public housing estates, secondary schools and post-secondary institutions. Teachers have in particular been encouraged to discuss with their students about possible employment traps when seeking summer or part-time jobs. The pamphlet also lists out the contact numbers of designated officers at the Financial Services Bureau, Labour Department and the police in case of question or complaint concerning Loco London gold trading.

It is worth underlining that fraudsters may set up employment traps in many different forms and under varying disguises. Loco London gold is one of the many vehicles that the fraudsters find convenient to exploit. There could well be many other forms of commercial activities that might be used as a substitute should regulation be imposed on the Loco London Gold market. We therefore believe the correct response lies in increased awareness of the public through education to protect themselves against deceptive and fraudulent activities than subjecting an otherwise long-established, effective and efficient market under unnecessary regulation.

Construction of Quarry Bay Park Phase II

8. MISS CHOY SO-YUK (in Chinese): Will the Government inform this Council of the specific plan and timetable for the construction of Quarry Bay Park Phase II works, including the time for relocating the Urban Services Department's temporary vehicle depot which is currently occupying the site in question?

SECRETARY FOR HOME AFFAIRS (in Chinese): Madam President, on the basis of information provided by the Urban Services Department, the answers to the Honourable Miss CHOY So-yuk's question are set out below.

The site proposed for the Quarry Bay Park Phase II is located near the Eastern Harbour Crossing and next to the Island Eastern Corridor. It has an area of about 5.2 hectares and comprises several pockets of land with different availability dates. The Provisional Urban Council plans to develop the whole site in three stages:

(a) Stage I (2.9 hectares) ─ this area is occupied by Short Term Tenancies and temporary government land allocations which can be terminated by giving notices to the existing occupants. The Provisional Urban Council has drawn up a detailed layout design for development of this area. Subject to approval of funds, construction can start in about mid-1999 for completion in about early 2001;

(b) State II (1.3 hectares) ─ most of this area is allocated to the police on a temporary basis for use as a Police Vehicle Pound. The temporary allocation will expire in December 2000. The Provisional Urban Council plans to develop this area when the site becomes available; and

(c) Stage III (1 ha) ─ this portion is occupied by an Urban Services Department Temporary Vehicle Depot. The Depot will be relocated to a permanent site in Chai Wan in 2005.

Closed Road Permits for Boundary Crossing Vehicles

9. MR JAMES TIEN (in Chinese): Regarding the "Closed Road Permits for Boundary Crossing Vehicles" issued by the Immigration Department, will the Government inform this Council:

(a) of the respective numbers of applications for the above Permits received and approved by the authorities in the past five years;

(b) of the average and the longest time taken for vetting and approving the above applications, and of the reasons for the relatively longer time taken for some of the applications; and

(c) of the measures in place to expedite the procedure for vetting and approving such applications?

SECRETARY FOR TRANSPORT (in Chinese): Madam President,

(a) The number of applications for Closed Road Permits received and approved in the past five years were:

Year	Applications Received	Applications Approved
1993	1 680	1 680
1994	1 821	1 821
1995	1 992	1 983
1996	3 260	3 255
1997	4 386	4 326

(b) In the last five years, processing of applications for Closed Road Permits took on average four to six weeks to complete. The longest waiting time in the last five years for such applications was nine months.

(c) Since February 1997, there is a standing agreement between Hong Kong and the Guangdong authorities that the number of new quotas for cross-boundary private cars should be set at 55 per month. This quota arrangement is needed to ensure that cross-boundary private cars grow at a measured pace so that the boundary crossing facilities will not be overloaded and congestion will not reach an unacceptable level in the road network in the vicinity of the boundary crossings.

Applications for Closed Road Permits will not be processed by the Immigration Department unless accompanied by approval documents issued by the Guangdong authorities. When the number of applications supported by approval documents received in Hong Kong exceeds the monthly agreed quota of 55, the excess cases will be put on the waiting list. Hence, if the issue of approval documents does not exceed the agreed quota, the waiting time will be shortened. We will continue to discuss with the Guangdong authorities on ways to smoothen the administration of the Closed Road Permit issuing process.

Funding Provided by the Hong Kong Sports Development Board

10. MR ANDREW CHENG (in Chinese): In its Strategic Plan covering the period 1991-1995 (the Strategic Plan), the Hong Kong Sports Development Board (SDB) stated that, among the two types of National Sports Associations (NSAs) registered respectively under the Societies Ordinance (Cap. 151) and the Companies Ordinance (Cap. 32), it would prefer to provide funding for NSAs set up under the Companies Ordinance. In this regard, will the Government inform this Council whether it knows:

(a) if the Board has provided funding in the past three years to the Amateur Sports Federation and Olympic Committee of Hong Kong, China (ASFOC) which is registered under the Societies Ordinance; if so, of the amount allocated each year; if it has evaluated whether such funding was in line with the funding principles specified in the Strategic Plan of the Board; and

(b) if the ASFOC has transferred a sum in the amount of HK$30 million to a Trust Fund, with its Chairman at that time appointed as the Permanent Honorary President of the Fund; if so, whether the SDB has assessed if such arrangement made by the ASFOC was in line with the funding conditions and spirits which the Board adopted; if an assessment has not been made, what the reasons are?

SECRETARY FOR HOME AFFAIRS (in Chinese): Madam President, from its recurrent subvention from the Government, the SDB provides funding to the ASFOC to help meet the latter's administrative and programme expenses as well as expenditure arising from participation in major games such as the Olympic or Asian Games. The amount distributed to the ASFOC in the past three years is as follows:

Year	Amount ($ million)
1995-1996	1.481
1996-1997	1.768
1997-1998	1.887

One of the criteria adopted by the Board in allocating government subvention to the NSAs, as well as to the ASFOC, is that these organizations should be non-profit making, registered under the Societies or the Companies Ordinance and have a proper constitution. All organizations which receive subvention through the SDB are required to submit returns showing how the money has been spent in the form of properly audited accounts. The ASFOC is required, just like the NSAs, to submit to the Board an audited annual return on its subvented activities.

The ASFOC operates with full autonomy under mandate from the International Olympic Committee (IOC). It works with the SDB and the sports community to promote and develop sport in Hong Kong. While the ASFOC is fully accountable to the SDB for the money it receives from the Board, it also has its own resources deriving from its membership of the IOC and also from private donations. The way in which it manages these resources is outside the purview of the Board.

Environmental Pollution Caused by Styrofoam Containers

11. DR RAYMOND HO (in Chinese): At present, most of the food containers used for serving lunch ordered by whole-day primary school students through their schools are made of styrofoam. As styrofoam waste causes environmental pollution, will the Government inform this Council:

(a) whether it has estimated the amount of such styrofoam containers discarded by schools each year;

(b) whether it has estimated the average amount of such styrofoam containers to be discarded each year when whole-day primary schooling is fully implemented in the 2007-2008 academic year; and

(c) whether schools will be requested to encourage students and to require lunch suppliers to use environmentally-friendly food containers?

SECRETARY FOR EDUCATION AND MANPOWER (in Chinese): Madam President,

(a) According to the Environmental Protection Department, 110 tons of styrofoam waste were discarded at landfills in Hong Kong last year, and of which 80 tons were styrofoam containers. However, the Government does not have further information as to how many of these styrofoam containers were discarded by schools.

In 1996, the Education Department (ED) conducted a survey of lunch arrangements adopted by all whole-day primary schools in Hong Kong. The findings showed that about 47% of students in these schools ordered lunch-boxes. However, the survey did not collect any statistics on the number of lunch-boxes which were made of styrofoam.

(b) and (c)

There is not sufficient information for the Government to estimate the number of styrofoam containers to be discarded by schools each year when whole-day primary schooling is fully implemented by the 2007-2008 academic year. Nevertheless, the Government will request schools and appeal to food suppliers not to use styrofoam food containers as far as possible.

Indeed, the ED issued a "Guidelines on Meal Arrangement in Schools" to all schools in 1996. The guidelines encourage parents to prepare lunch for their children and to help them develop a healthy and hygienic dietary habit. In 1997, the ED also issued letters to all schools, reminding them of the need to protect the environment and, in the interests of students' and teachers' health, to request food caterers and school tuckshop operators not to use styrofoam food containers.

The ED has been fostering environmental education at all levels in schools. A "Guidelines on Environmental Education in Schools" issued by the Curriculum Development Council sets out detailed suggestions on the promotion of environmentally-friendly behaviour in schools, which include discouraging the use of disposable utensils like styrofoam containers and wooden chopsticks. Seminars and experience-sharing sessions on environmental protection issues are jointly organized by the ED, other government departments and green groups on a regular basis for primary and secondary schools. The main contents of these sessions include waste disposal.

In concert with other relevant departments and organizations, the ED will continue to step up publicity and promote environmental education in schools.

Illiteracy Rate in Hong Kong

12. MR CHAN KAM-LAM (in Chinese): It was reported that the latest Human Development Report issued by the United Nations stated that the current illiteracy rate in Hong Kong has reached 8% and Hong Kong's ranking in the education index has dropped from 60 last year to 75. In this connection, will the Government inform this Council:

(a) whether it has conducted any statistical survey on the illiteracy rate in Hong Kong; if so, what the details are; if not, why not;

(b) whether it has examined the relationship between the illiteracy rate and the increase in the number of newly arrived residents; and whether it has any plans to offer appropriate education courses for those new arrivals who are of a relatively low education level; and

(c) of the specific plans to lower the illiteracy rate in Hong Kong?

SECRETARY FOR EDUCATION AND MANPOWER (in Chinese): Madam President,

(a) In the fourth quarter of 1984, the Census and Statistics Department conducted a special topic enquiry on illiteracy rate as part of the General Household Survey. An illiterate person is defined as one who cannot, with understanding, both read and write short and simple statements on his or her everyday life. Based on this definition, it was estimated that about 12% of the Hong Kong population aged 15 or above were illiterate then.

In addition, a census is conducted every 10 years in Hong Kong, and with a bi-census in between. Although data on illiteracy are not directly collected in these surveys, the education level of the public is covered. According to these surveys, those who were aged 15 or above and had not received any education or had only received kindergarten education accounted for the following percentages of the total population in the relevant age group:

Year	Percentage
1976	20.2%
1981	16.1%
1986	14.1%
1991	12.8%
1996	9.5%

The above figures indirectly show that the illiteracy rate in Hong Kong has been dropping steadily. According to the bi-census in 1996, over 72% of those persons aged 15 or above who had not received any education or had only received kindergarten education were aged 60 years or above.

The Human Development Report issued by the United Nations Development Programme states that the illiteracy rate in Hong Kong is 8% and that Hong Kong's ranking in the education index has dropped from 60 last year to 75. We do not know the source of data for compiling these figures. The Census and Statistics Department has written to the relevant organization to enquire about the matter.

(b) As the annual figure of newly arrived residents from mainland China who are 15 years old or above accounts for far below 1% of Hong Kong's total population, their education level has negligible effect on the overall education level of Hong Kong. Newly arrived residents who are 15 years old or above and who have not received any education or have only received kindergarten education may enrol in local adult education courses (see paragraph (c) below for details).

(c) Apart from offering nine years' free and universal basic education to all children between the ages of six and 15, the Government has been raising the education level of the public through various measures. For example, the Adult Education Section of the Education Department provides adult education at primary and secondary levels and English courses for interested persons aged 15 or above. It also subvents non-government organizations in providing adult education courses, including literacy class. Besides, adult education programmes are provided by other private institutions.

Fees Charged for Private Agricultural Land Used for Industrial Purposes

13. MR LAU WONG-FAT (in Chinese): Will the Government inform this Council:

(a) of the number of cases in which approval has been given for changing the use of private land from agricultural to industrial;

(b) of the basis adopted by the Administration for determining the annual fee payable in respect of the land concerned after it has been changed to industrial use; and

(c) whether the level of fee payable in respect of such private land is on a par with the level of rent payable for the industrial land leased under short term tenancy; if so, the basis of determination by the Administration and whether the income receivable for agricultural use of the land should form a deducting factor in the fee calculating formula?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Chinese): Madam President,

(a) During the past five years, no application was received to rezone "agriculture" land to industrial use. Nevertheless, there are currently 1 116 cases in which private agricultural land is temporarily allowed to be used for industrial purpose by way of a short-term waiver.

(b) Private agricultural land temporarily allowed to be used for industrial purpose by way of a short term waiver is charged a short-term waiver fee which reflects the enhancement in the annual value of the land arising from the change in land use. The Lands Department has prepared standard rates for each district according to the location of and permitted structures on a site.

The standard rates are assessed on a full market value basis by reference to the rentals for similar short term tenancy sites granted by way of open tender or rentals agreed upon rent review for these types of short term tenancies in the previous 12 to 24 months. The standard rates are applied to the sites upon the commencement date of the waivers and are subject to review every three years.

(c) The banding system and rate zoning for the assessment of standard short term tenancies and short term waivers rates are by and large similar. The short term waiver fees are designed to take account of the value of the agricultural land to which the owner is entitled, and the short term waiver rates are assessed at about 50% of the levels of the short term tenancy rents.

Community Rehabilitation Network

14. MR LEUNG YIU-CHUNG (in Chinese): Will the Government inform this Council:

(a) of the estimated number, by the types of diseases, of residents in the New Territories East and West regions who are suffering from chronic diseases and, among them, of the number who are staying in hospitals;

(b) how it is currently providing rehabilitation service to these people in these two regions; and whether the Administration has plans to set up community rehabilitation network centres for people suffering from chronic diseases in these two regions; and

(c) whether it knows the progress of the study undertaken by the Chinese University of Hong Kong commissioned by the Administration on current services and future developments of the community rehabilitation network in Hong Kong; and when the findings of the study will be published by the university?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) The assessment of prevalence or incidence of chronic disease requires dedicated population based studies. This is because chronicity is not by itself a disease diagnosis. Moreover, chronic disease is not necessarily recognized by the individual and the individual may not seek medical care. If treatment is needed, the individual may receive treatment either in a primary care setting or by specialists in an ambulatory or hospital setting in the public or private sectors. Based on information available, the number of patients who were admitted to hospitals operated by the Hospital Authority in the New Territories and who suffered from one of the 10 common chronic diseases in 1996 is shown below:

Disease Diagnosis	No of Patients Admitted to Hospital
	New Territories East	New Territories North	New Territories South
Mental Disorder	1 614	2 672	3 171
Chronic obstructive pulmonary disease	962	1 490	2 409
Diabetes mellitus	1 390	1 187	2 455
Asthma	1 053	1 067	1 892
Heart failure	790	983	1 510
Chronic rental failure	539	589	826
Epilepsy	430	670	853
Chronic liver diseases and cirrhosis	216	253	408
Mental handicap	94	239	208
Parkinson's disease	81	91	236
Total	7 169	9 241	13 968

(b) At present, persons with visceral disability or chronic illness can receive necessary support and direct services from a variety of sources. These include the 30 existing Hospital Authority patient resource centres (11 are in the New Territories region), medical social workers stationed in hospitals and clinics, social workers operating out of family service centres of the Social Welfare Department, and the three existing Community Rehabilitation Network (CRN) centres. The latter also run out-reach programmes, such as health talks and social gatherings, in response to the demand for specific support services in the New Territories.

The Administration has recently commissioned a consultancy study to review the long-term development of CRN and the cost-effectiveness of existing CRN operations. In addition, the consultancy will also examine the interface with similar services provided by patient resource centres operated by the Hospital Authority, health centres provided for the elderly and for women and so on, which have seen rapid growth in recent years. The Administration will consider the future establishment of CRN centres in the New Territories in the light of the consultant's findings and recommendations.

(c) The fact finding stage of the consultancy study has been completed and the exercise will be completed by the end of this year. The consultants' report will be published and made available to the public once the Administration has examined the findings and recommendations and developed its response.

Assessment of Housing Demand

15. MR LEE WING-TAT (in Chinese): As the economy of Hong Kong has shown negative growth in each quarter this year and there is generally a fall in people's income, will the Government inform this Council whether, based on the housing demand model formulated by the interdepartmental Working Group on Housing Demand in January 1997, it has recomputed the housing demand of the public from now until 2005-2006? If so, please give a breakdown of the figures by classifications of public and private housing and by different components as listed in the schedule.

	Number of Households (1998-99 - 2005-06)
Components	Total			Annual
	Public Housing	Private Housing	Total	Public Housing	Private Housing	Total
(1) New Housing Demand
(a) Marriages
(b) Divorces
(c) Legal Immigrants from China
(d) Expatriates
(e) Splitting of Existing Households
(f) Inadequately Housed Households
Sub-total
(2) Generated Housing Demand
(a) Redevelopment of Public Rental Estates
(b) Clearance of Temporary Housing Areas/Cottage Areas
(c) Clearance of Squatters
(d) Emergency/Natural Disaster and Compassionate Cases
(e) Redevelopment of Private Properties
Sub-total
(3) Adjustments of Housing Demand
(a) Net Outflow of Hong Kong Residents
(b) Dissolution of Households
(c) Intersectoral Transfers of Adequately Housed Households
(d) Double Counting
Sub-total
Total Housing Demand {(1)+(2)+(3)}
Total Flat Production Requirements

SECRETARY FOR HOUSING (in Chinese): Madam President, the Government's latest assessment of housing demand was made public in February 1998. According to the projections for the 10-year period from 1997-1998 to 2006-2007, total flat production requirement is 799 000 flats, comprising 456 000 flats in the public sector and 343 000 flats in the private sector. In order to take into account the effect of the recent economic downturn and initiatives in housing policy, we shall commission a new survey of housing aspirations within this year. Its findings will be used to update the data and assumptions used in calculating the earlier projections. As stated in the 1998 Housing Policy Objective, we intend to publish the projection results in 1999.

While it is too early to anticipate the results of this exercise, it is clear that the main effect of the economic downturn on housing demand is to suppress demand for private sector housing in the short term. Because the Government's assessment model is designed to project housing demand based on long-term population growth, such projections are not likely to be affected significantly by short-term changes in the economic climate.

Actions upon Flood Warnings in Northern New Territories

16. MR LAU KONG-WAH (in Chinese): Regarding the relief actions taken by the Government for the residents in Northern New Territories when flooding occurs, will the Government inform this Council:

(a) of the actions that will be taken by the Administration when it is anticipated that flooding will soon occur in Northern New Territories, as well as the actions that will be taken after the Hong Kong Observatory has issued flood announcements for areas in Northern New Territories; and

(b) whether regular reviews of the effectiveness of these actions have been conducted; if so, what the results of the reviews are?

SECRETARY FOR SECURITY (in Chinese): Madam President,

(a) The Hong Kong Observatory (HKO) keeps a 24-hour continuous watch on the weather in and around Hong Kong. When rain clouds affect Hong Kong, the HKO will analyse the rainfall distribution based on the latest rainfall data obtained from weather radar and rain gauges. When serious flooding is anticipated particularly in the low-lying plains of the Northern New Territories, a Special Announcement on Flooding in the Northern New Territories (SAF) will be issued by the HKO.

A SAF will be broadcast to the public through the electronic media. It will also be updated at regular intervals until heavy rain ceases.

Upon notification of a SAF, relevant government departments and organizations will stand ready and consider the need for appropriate actions such as closure of individual schools, opening of temporary shelters, arrangements for emergency rescue operations and other relief work. Specific actions undertaken by the government departments are summarized as follows:

(i)	Hong Kong Observatory:	vigilantly monitors the weather condition and updates its SAF for relevant government departments and the general public through the electronic media;
(ii)	Drainage Services Department (DSD):	monitors the water level of flood prone areas in the Northern New Territories where 13 river stage gauges have been installed at strategic locations, such as the Shenzhen River, River Beas and River Indus. Should any river stage exceed the alarm level, the DSD will alert the Fire Services Department (FSD) and the Home Affairs Department (HAD), and inform the HKO. Furthermore, the Department's Mainland North Region Emergency Storm and Damage Organization will be activated. At least two teams of the DSD and contractor staff will stand ready in Yuen Long and North Districts to clear blocked drains, if necessary;
(iii)	Home Affairs Department, North and Yuen Long District Offices:	liaise closely with villagers through their village representatives and provide temporary shelters. The two district offices work closely with the FSD, the police and the DSD in case evacuation and other rescue operations may be required. Upon receipt of a flood alert notice, the district office staff will attend the scene and co-ordinate the provision of necessary relief services as required. The District Emergency Co-ordination Centre will also be activated in case of severe flooding;
(iv)	Fire Services Department, the police, Government Flying Service (GFS), Civil Aid Service (CAS):	provide evacuation and rescue services for flood victims, and emergency treatment to casualties before their conveyance to hospitals.
		The FSD will deploy special rescue and ambulance resources including eight dinghies in fire stations close to the flood prone areas in the Northern New Territories to expedite emergency response to possible flood incidents. Furthermore, a Forward Command Post may be established in the nearest fire station to enhance the command and control of rescue operations and to facilitate effective mobilization of emergency resources.
		The police will make available boats and rescue crafts in response to flood incidents. Police Command Posts will be set up at flood scenes to enhance communication with the Police Regional Command and Control Centre and Divisional Headquarters. It will also take appropriate actions such as closing road, directing traffic, disseminating information to relevant parties, and so on.
		The GFS will reserve three helicopters for performing air surveillance over flooded areas and assisting in rescue operations.
		A total of four flood rescue teams with rescue crafts will be made available by the CAS. They will standby at the Sheung Shui Fire Station and the CAS Fanling and Yuen Long District Headquarters to facilitate rescue operations as required;
(v)	Information Services Department (ISD), Transport Department (TD):	help disseminate the SAF and traffic related information to government departments, news media and public transport operators.
		The ISD is also responsible for sending out other public announcements through the media, including advice to flood victims awaiting rescue and relief measures; and
(vi)	Social Welfare Department (SWD):	provides temporary shelters and emergency relief services in co-operation with the HAD.

Local villagers and members of the public in general are regularly advised on the precautionary measures they should take and useful emergency telephone numbers they may use through a booklet on Weather Warnings and Precautionary Measures and a pamphlet on the Special Announcement on Flooding in the Northern New Territories distributed through the district offices. District offices concerned will inform the rural committees and village representatives of the precautionary measures to be taken in case of flooding. The Education Department will also keep schools in the Northern New Territories on the alert and remind them of the need to make timely arrangements for school closure based on the advice of the HKO and the DSD.

(b) Regular reviews have been and will continue to be conducted both by individual departments and at an interdepartmental level with a view to further improving the arrangements for flood rescue operations and emergency relief services. For example, the HKO keeps its weather monitoring and warning services under regular review. Indeed, the SAF system, newly introduced this year, was the result of the HKO's review of the Rainstorm Warning System last year. Arrangements for the SAF will be brought under the HKO's annual review to be conducted at the end of the year.

Pursuant to each major flood rescue operation, the Security Bureau will conduct a joint review with departments concerned of the emergency response by the departments and co-ordination of the rescue and relief arrangements to identify areas for improvement.

A case in point was the extensive flooding in the Northern New Territories on 24 May 1998. The joint review among the government departments and related organizations has confirmed the effectiveness of the emergency response by parties concerned, but proposed further improvements to the communication network to facilitate the prompt updating of weather information to the rescue services. Recommendations arising from the joint review have since been put in place.

Major findings of these reviews will be incorporated into the Hong Kong Contingency Plan for Natural Disasters, which prescribes the responsibilities of individual government departments and related organizations in response to adverse weather conditions such as typhoon and flood warning. The Contingency Plan is subject to annual review after the rainy season.

Safety of Children Travelling in Nanny Vans

17. MISS CHRISTINE LOH: Regarding the safety of children travelling in school private light buses (commonly known as "nanny vans"), will the Government inform this Council:

(a) of the maximum number of children passengers under the age of six allowed in a nanny van;

(b) of the total number of traffic accidents involving nanny vans without seat belts during the past five years, and of the respective numbers of children passengers who died or were injured in these traffic accidents; and of the prognosis of the seriously injured children who are still under medical care;

(c) whether it will consider stipulating that children passengers in nanny vans must wear seat belts; if not, why not, and whether the absence of escorts constitutes a major reason for not implementing that stipulation;

(d) whether it will consider stipulating that nanny vans must have an escort on board; if not, why not; and

(e) whether the rationale for the stipulation that school buses must have an escort on board is also applicable to nanny vans?

SECRETARY FOR TRANSPORT: Madam President, the legal seating capacity of any vehicle is specified in the registration document of the vehicle. In general, the seating capacities of nanny vans range between 12 and 16. Nevertheless, it is stipulated in the Road Traffic (Traffic Control) Regulations of the Road Traffic Ordinance (Cap. 374) that:

(i) a child under the age of three years shall not be counted as a passenger; and

(ii) three children aged three years or above but not exceeding 1.3 m in height shall be counted as two passengers.

The maximum number of children passengers under the age of six which can be lawfully carried in a nanny van therefore depends on the legal seating capacity of the vehicle and the age and height of children passengers.

As nanny vans are not required by law to be equipped with seat belts, the Government does not keep accident statistics on nanny vans based on whether they have seat belts or not at the time of the accidents. Nevertheless in the past five years, 131 passengers under the age of 15 were found not wearing seat belts (irrespective of whether seat belts have been installed) when the nanny vans they were riding got involved in traffic accidents. Of these 131 passengers, five were seriously injured and the rest were slightly injured. The Government does not keep track of whether these five seriously injured passengers are still under medical care.

The provision of escort service on school buses carrying primary or kindergarten pupils has been made mandatory since 1 February 1997. The capacity of a nanny van is considerably less than a school bus and there is no similar requirement for nanny vans to provide escort on board because at the time the legislation was drawn up, there were strong concerns from the nanny van trade about costs arising from the compulsory requirement of an escort.

A working group chaired by the Transport Department is reviewing the safety requirements for nanny vans. Amongst other things, the extension of mandatory escort requirement and seat belts for passengers will be examined by the working group. The concerned parties, including the nanny van trade, will be consulted on proposals arising from the review.

Measures to Avoid Budget Deficits

18. DR DAVID LI: Will the Government inform this Council whether, in order to increase its incomes and to avoid budget deficits in the next few years, it will consider selling or listing on the Hong Kong Stock Exchange some of its quality assets, such as the toll tunnels, the Kowloon-Canton Railway Corporation, the Mass Transit Railway Corporation, the Hongkong Post and the airport at Chek Lap Kok?

SECRETARY FOR THE TREASURY: Madam President, the Government will give careful and serious consideration to the possibility of privatization, either in part or in whole, of some of its assets, such as railway corporations and toll tunnels, through selling or listing on the Hong Kong Stock Exchange. The Government recognizes that such action will increase its income in the particular year when privatization takes place, as well as generating wider economic benefits for the community. It also recognizes that other factors, for example, legislation, will need to be taken into account in the consideration of any privatization proposal.

Interest Rate Rules for Bank Deposits

19. MR FRED LI (in Chinese): In connection with adjustments to the best lending rate and the deposit rates offered by banks in Hong Kong, will the Government inform this Council:

(a) whether consideration will be given to removing the stipulation that the rates cap for bank deposits with a maturity or call period of less than seven days are to be determined by the Hong Kong Association of Banks in accordance with the Interest Rate Rules, so as to allow the relevant rates to be determined by the market; if so, of the specific timetable; if not, why not;

(b) whether any assessment has been made to determine if the current differential between the one-month interbank interest rate and the best lending rate is at a reasonable level;

(c) whether measures will be adopted to narrow down the current differential between the deposit rate and the lending rate to the 2% level which was the prevailing interest rate spread prior to the financial turmoil; if so, what the details are; if not, why not; and

(d) whether any assessment has been made as to the effects of the best lending rate on economic growth; if an assessment has been made, what the details are; if not, why not?

SECRETARY FOR FINANCIAL SERVICES (in Chinese): Madam President,

(a) The Hong Kong Monetary Authority (HKMA) is committed to greater liberalization of the banking system to promote competition and product innovation. However, it is equally important to strike the right balance between healthy competition and the stability of the banking and monetary systems. Such a prudent approach is appropriate especially in the light of the current volatile and uncertain environment surrounding the financial sector.

Since the advent of the Asian financial crisis, we have witnessed significant volatility in the banking market and the competition for time deposits has placed banks under severe pressure. If the remaining Interest Rate Rules (IRRs) were to be removed in this kind of environment, there is a real risk that it will add to the uncertainty and volatility in the banking system. This runs against the public interest of Hong Kong.

Although interest rates have moderated recently, the market remains uncertain. There are also a number of other policy issues which are being reviewed at present, for example, the three tier system, market entry requirement, "one branch condition" for foreign banks and so on. These will also have impact on the competitive environment of the banking sector.

Accordingly, it seems clear that decisions towards further deregulation should not be taken in isolation. Instead, they should be reviewed in the broader context of the strategic direction of the Hong Kong banking sector, the state of the economy as a whole, and other possible policy changes. Consequently, the HKMA has commissioned a consultancy study on the future direction of the banking sector. The study will address various policy issues including the IRRs. The result of the study should be finalized by the end of the year. After considering the consultant's findings and recommendations, the HKMA will publish a report in due course.

(b) Although the HKMA does not assess whether the interest spreads are at a reasonable level, it does monitor the net interest margins¹ of Hong Kong banks which are published on a quarterly basis in the HKMA's Quarterly Bulletin. The general observations arising from these statistics are that the average net interest margin of Hong Kong banks is lower than that of the United States and is comparable with those in the United Kingdom and Australia for the period 1995 to 1997. In other words, the net interest income earned by banks in Hong Kong does not seem to be out of line with their international counterparts.

It should be noted that it may be misleading to look at the interest spread at any one point in time. During the Asian financial crisis, banks in Hong Kong have experienced tremendous pressure arising from interest rate volatility. For example, the spread between the Best Lending Rate (BLR) and one-month time deposit rates² varied between 4.37% and 1.42% from July 1997 to September 1998. In fact, there were instances where time deposit rates were higher than the BLR. This has particularly been the case for the larger deposits where banks have been prepared to offer preferential rates well in excess of Hong Kong Dollar Interbank Offered Rates (HIBOR) in order to attract deposits. Although the interest rate environment has recently become more stable, the time deposit rates are still higher than precrisis levels.

In addition, the interbank market is also a significant source of funding for banks. The spread between the BLR and one-month HIBOR (average monthly figures) has fluctuated in the range of 4.6% in March 1998 to minus 2% in August 1998. These average figures actually mask the substantially higher daily volatility of the interest spread.

(c) The HKMA does not attempt to regulate the interest margin earned by banks. In fact, the interest margin in the recent period is lower than that before the financial crisis. The spread between one-month HIBOR and BLR averaged 2.98% in 1995, 3.22% in 1996 and 2.55% in the first nine months of 1997, prior to the financial crisis. In the year to September 1998, the same spread has averaged only 1.53%, that is, much lower than precrisis levels. In addition, as noted in part (b), the banks have been offering rates above HIBOR for much of their deposits during the past year, further compressing interest margin. This has contributed to the sharply lower profits reported by the banks in the first half of 1998.

(d) In our regular economic analysis, interest rates (including the BLR), are treated as a variable that will affect private consumption expenditure as well as private sector investment. Given that consumption and private sector investment are important components of domestic demand and hence of Gross Domestic Product, the level of interest rate has a direct bearing on overall economic activity. But interest rate is only one of the many factors that will affect our economic performance. Other significant factors include the economic situation in our major export markets, the movement of exchange rates, price competitiveness, inflation in our major import supplier economies, the pace and nature of structural change, and so on. The impact of interest rate movements on our economic performance is therefore often intertwined with those from the various external and domestic factors, and hence not readily separable for assessment in isolation.

1 Net interest margin is defined as net interest income (that is, interest income less interest expense) divided by average interest bearing assets. This is one of the internationally recognized measures of bank profitability.



2 The various interest rates quoted in this response represent their respective monthly average figures between July 1997 and September 1998. The average interest rates for one-month time deposits were compiled based on the board rates for deposits less than HK$100,000 offered by 10 leading banks. The BLR refers to the rate quoted by the Hongkong and Shanghai Banking Corporation Limited.

Law and Order at Lo Wu Bridge

20. MR ERIC LI (in Chinese): Regarding the maintaining of law and order at Lo Wu Bridge, will the Government inform this Council:

(a) of the respective numbers of robbery, theft, indecent assault and affray cases which occurred last year at the section of Lo Wu Bridge within the jurisdiction of Hong Kong, and whether all such cases were dealt with in accordance with the laws of Hong Kong;

(b) of the measures in place to maintain law and order at the section of Lo Wu Bridge within the jurisdiction of Hong Kong; and

(c) whether it will discuss and work with the relevant mainland departments to formulate measures to improve law and order along the entire Lo Wu Bridge?

SECRETARY FOR SECURITY (in Chinese): Madam President,

(a) During the period from November 1997 to October 1998, there was only one wounding case which occurred at the section of the Lo Wu Bridge under the jurisdiction of the Hong Kong Special Administrative Region (SAR). The case was dealt with by the Hong Kong Police in accordance with the laws and procedures of the SAR.

(b) The Hong Kong Police Force station uniformed officers at this section of the Lo Wu Bridge to closely monitor the situation thereat and to maintain law and order in the area.

(c) All along the Hong Kong Police have co-operated and liaised closely with the Shenzhen authorities, through the Border Liaison Channel, to maintain law and order on the Lo Wu Bridge.

BILLS

First Reading of Bills

PRESIDENT (in Cantonese): Bills: First Reading.

ADAPTATION OF LAWS (NO. 5) BILL 1998

ADAPTATION OF LAWS (NO. 4) BILL 1998

ADAPTATION OF LAWS (NO. 6) BILL 1998

BUSINESS REGISTRATION (AMENDMENT) BILL 1998

ADAPTATION OF LAWS (NO. 3) BILL 1998

MARRIAGE (CERTIFICATE OF ABSENCE OF MARRIAGE RECORD) BILL 1998

CLERK (in Cantonese):

Adaptation of Laws (No. 5) Bill 1998 Adaptation of Laws (No. 4) Bill 1998 Adaptation of Laws (No. 6) Bill 1998 Business Registration (Amendment) Bill 1998 Adaptation of Laws (No. 3) Bill 1998 Marriage (Certificate of Absence of Marriage Record) Bill 1998.

Bills read the First time and ordered to be set down for Second Reading pursuant to Rule 53(3) of the Rules of Procedure.

Second Reading of Bills

PRESIDENT (in Cantonese): Bills: Second Reading. Secretary for Justice.

ADAPTATION OF LAWS (NO. 5) BILL 1998

SECRETARY FOR JUSTICE (in Cantonese): Madam President, I move that the Adaptation of Laws (No. 5) Bill 1998 be read the Second time.

The Bill seeks to bring terminological amendments to the Lands Tribunal Ordinance, the Labour Tribunal Ordinance, the Municipal Services Appeals Boards Ordinance, the Magistrates Ordinance, the Administrative Appeals Boards Ordinance and the Coroners Ordinance.

To bring the laws of the Hong Kong Special Administrative Region (SAR) into conformity with the Basic Law and with Hong Kong's status as a Special Administrative Region of the People's Republic of China, the Hong Kong Reunification Ordinance provided, inter alia, for the inclusion of Schedule 8 in the Interpretation and General Clauses Ordinance. The Schedule sets out the principles for interpreting laws which continue to remain as the laws of the SAR. Despite this interim arrangement and the subsequent adaptation of court-related nomenclature and titles of judges under the Adaptation of Laws (Courts and Tribunals) Ordinance, it is considered unacceptable to retain terminologies which are inconsistent with the Basic Law in our statute books after the Reunification. We therefore propose legislation to bring about the necessary terminological amendments.

The Bill, when passed into the law, shall take effect retrospectively, as from the date of the establishment of the SAR.

Madam President, this Bill is important not only for bringing the above six Ordinances into full conformity with the Basic Law and with Hong Kong's status as a SAR, but is also required to obviate the need for cross-referencing to the Hong Kong Reunification Ordinance and the Interpretation and General Clauses Ordinance. I therefore commend it to this Council for early passage into law.

Thank you, Madam President.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Adaptation of Laws (No. 5) Bill 1998 be read the Second time.

In accordance with the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

PRESIDENT (in Cantonese): Secretary for Justice.

ADAPTATION OF LAWS (NO. 4) BILL 1998

SECRETARY FOR JUSTICE (in Cantonese): Madam President, I move that the Adaptation of Laws (No. 4) Bill 1998 be read the Second time.

The purpose of the Bill is to adapt the provisions of three Ordinances to bring them into conformity with the Basic Law and with the status of Hong Kong as a Special Administrative Region of the People's Republic of China.

The Legal Officers Ordinance, the Legal Practitioners Ordinance and the Official Solicitor Ordinance are some of the laws previously in force in Hong Kong which have been adopted as laws of the Hong Kong Special Administrative Region (SAR). They contain a number of provisions which require adaptation. Although the Interpretation and General Clauses Ordinance specified how terminology inconsistent with the Basic Law or with the status of Hong Kong as a SAR of the People's Republic of China is to be construed, it is considered unacceptable to retain such terminology in our laws. Accordingly, we now need to introduce further legislation to effect the necessary textual amendments.

I will now describe the main provisions of the Bill and the reasons for them. The Bill provides that most of the proposed adaptations should have retrospective effect to cover the interim period between 1 July 1997 and the enactment of the Bill. This retrospectivity will ensure that there is consistency of interpretation of all laws on and after 1 July 1997. However, this retrospectivity will not apply to criminality. This restriction is in line with the requirements in the International Covenant on Civil and Political Rights as applied to Hong Kong. Adaptations which introduce provisions that have yet to come into operation will take effect as from the date when the relevant provisions come into operation.

The Bill repeals provisions which are either obsolete or contain colonial connotations and replaces them, where necessary, with new terms. The old references to "Governor" are replaced by "Chief Executive" or "Chief Executive in Council", as appropriate. References to United Kingdom Acts or authorities are replaced by references to local legislation or authorities.

The Bill amends the Legal Officers Ordinance to provide that all rights which were enjoyed by the Attorney General immediately before 1 July 1997 in the courts of Hong Kong, except for those that are inconsistent with the Basic Law, shall on or and after that date be exercisable by the Secretary for Justice.

The Bill further amends the Legal Officers Ordinance to provide that all rights and duties which were exercisable or dischargeable by the Attorney General immediately before 1 July 1997, so far as regards any proceedings over which the courts of Hong Kong had jurisdiction by or by virtue of the Matrimonial Causes Ordinance, except for those that are inconsistent with the Basic Law, shall on and after that date be exercisable or dischargeable by the Secretary for Justice.

The Bill repeals the Schedule to the Legal Officers Ordinance and replaces it with new titles of legal officers such as "Secretary for Justice" and "Government Counsel".

The Bill also provides that references to the "Department of Justice" in the Legal Practitioners Ordinance in relation to the period before 1 July 1997 are deemed to be references to the former Legal Department.

The Bill also repeals references to the "Attorney General's Chambers" and substitutes references to the "Department of Justice" in the Barristers (Qualification) Rules.

Madam President, the majority of the amendments that the Bill seeks to make are terminological changes. They aim to remove any uncertainties in interpreting our laws, and are therefore essential for the smooth operation of the SAR. I commend this Bill to Members for early passage into law. Thank you, Madam President.

PRESIDENT (in Cantonese): I now put to the question to you and that is: That the Adaptation of Laws (No. 4) Bill 1998 be read the Second time.

In accordance with the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

PRESIDENT (in Cantonese): Secretary for the Treasury.

ADAPTATION OF LAWS (NO. 6) BILL 1998

SECRETARY FOR THE TREASURY: Madam President, I move that the Adaptation of Laws (No. 6) Bill 1998 be read the Second time.

The Bill aims at adapting 12 Ordinances and their subsidiary legislation which are related to government revenue in order to make them consistent with the Basic Law and the status of Hong Kong as a Special Administrative Region (SAR) of the People's Republic of China. All the Ordinances included in the Bill have already been adopted as laws of the Hong Kong SAR. Some of the references in these Ordinances, for example, references to the Governor, the Governor in Council and the Crown, are inconsistent with the Basic Law or the status of Hong Kong as a SAR of the People's Republic of China.

Although the Hong Kong Reunification Ordinance and the Interpretation and General Clauses Ordinance have laid down how these references should be construed, it is considered unacceptable to retain such references in the Ordinances included in the Bill. Therefore, we have introduced the Bill to effect textual amendments to these Ordinances. When the adaptation amendments set out in the Bill are passed into law, they will take effect retrospectively as from the date of the establishment of the Hong Kong SAR.

The Bill enables us to dispense with the need to make reference to the Hong Kong Reunification Ordinance and the Interpretation and General Clauses Ordinance when referring to the 12 Ordinances. I hope that Honourable Members will support the Bill. Thank you.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the Adaptation of Laws (No. 6) Bill 1998 be read the Second time.

In accordance with the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

PRESIDENT (in Cantonese): Secretary for the Treasury.

BUSINESS REGISTRATION (AMENDMENT) BILL 1998

SECRETARY FOR THE TREASURY: I move that the Business Registration (Amendment) Bill 1998 be read the Second time.

We have recently reviewed the operation of the business registration system to identify areas which can be simplified and modernized. We intend to install a new computer system and revamp the office procedures in order to rationalize the operation of the business registration system and to keep pace with the development of today's business environment. As a result, we expect that the time taken for effecting a new business registration will be shortened from six to four days.

The Business Registration Ordinance and its subsidiary legislation contain some restrictive provisions which have limited the scope for the Inland Revenue Department to implement these streamlining measures. The Bill aims at amending those provisions in order to implement the various improvement proposals. One of the major amendments of the Bill is to establish an open Business Index which will be assessable to the public for the search of Business Registration Numbers of businesses on a self-service basis. At present, any person may request the Department to extract any information on the Business Register provided that the person can identify the particular business required, such as by furnishing the Department with the Business Registration Number of the business concerned. If the number is not known, the person has to request the Department to conduct a search for the number before any further search can be done. The Department receives around 100 000 such requests each year.

The proposed Index will enable the public to obtain the required information in a timely manner and reduce the workload of the Department. The Index may, in due course, be published in electronic form such as on the Internet. It will only include minimal particulars of the registered businesses which enable such businesses to be identified. As the Department has already been providing information from the Business Register upon request, the proposed Index will not violate the secrecy principle upheld by the Department.

The Bill also proposes to allow the Department to supply extract of business particulars from the Business Register in uncertified form. The dispensation with the certifying process, which has to be done manually, will enable full automation of extraction of information from the Register and will shorten the processing time. It will also enable the particulars to be transmitted to information seekers electronically.

The purpose of the Bill is to simplify procedures and improve services. I hope that Honourable Members will support the Bill. Thank you.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Business Registration (Amendment) Bill 1998 be read the Second time.

In accordance with the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

PRESIDENT (in Cantonese): Secretary for Security.

ADAPTATION OF LAWS (NO. 3) BILL 1998

SECRETARY FOR SECURITY (in Cantonese): Madam President, I move that the Adaptation of Laws (No. 3) Bill 1998 be read the Second time.

The Bill seeks to repeal the Foreign Jurisdiction (Expenses) Ordinance and the Smuggling into China (Control) Ordinance and its subsidiary legislation, which are not in conformity with the status of Hong Kong as a Special Administrative Region of the People's Republic of China.

The Foreign Jurisdiction (Expenses) Ordinance made under the United Kingdom Foreign Jurisdiction Acts provides for expenses in relation to Hong Kong residents who have committed offences and have subsequently been convicted or acquitted on the ground of insanity in any country or place out of Her Majesty's dominions. Following China's resumption of the exercise of sovereignty over Hong Kong, United Kingdom Acts have ceased to apply to Hong Kong. In fact, according to our record, no expenses have been incurred under this Ordinance. As the Ordinance has become obsolete, we propose to repeal it.

The Smuggling into China (Control) Ordinance was enacted in 1948 to give effect to an agreement between the then Chinese Government and the United Kingdom for various measures to prevent smuggling between Hong Kong and China. Since the subsequent enactment of the Import and Export Ordinance in 1970, smuggling offences have been dealt with entirely under that Ordinance. The provisions under the Smuggling into China (Control) Ordinance were therefore not required and never invoked, expect that the Cap. 242 line continued to be used as a customary reference line, where mainland security vessels were allowed access north of the line. Following the promulgation of the boundary of the Hong Kong Special Administrative Region by the State Council in its Order No. 221 on 1 July 1997, the customary line laid down in the Smuggling into China (Control) Ordinance has become obsolete. The Ordinance should be repealed.

I hope Members will support this Bill which repeals Ordinances that are obsolete and no longer applicable so as to update the laws of Hong Kong.

Thank you, Madam President.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Adaptation of Laws (No. 3) Bill 1998 be read the Second time.

In accordance with the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

PRESIDENT (in Cantonese): Secretary for Security.

MARRIAGE (CERTIFICATE OF ABSENCE OF MARRIAGE RECORD) BILL 1998

SECRETARY FOR SECURITY (in Cantonese): Madam President, I move the Second Reading of the Marriage (Certificate of Absence of Marriage Record) Bill 1998.

Section 26 of the Marriage Ordinance and section 13 of the Marriage Reform Ordinance carry provisions for the issuance of Certificates of Absence of Marriage Record. However, there are inconsistencies between the the Chinese and English texts of these provision. Thus this Bill has been made to remove these inconsistencies.

In accordance with section 26 of the Marriage Ordinance and section 13 of the Marriage Reform Ordinance, the Registrar of Marriages may issue certificates to stipulate expressly that there is no record of marriage or registration of marriage of the persons named in the certificates. Such certificates are called Certificates of Absence of Marriage Record. Some jurisdictions require Hong Kong residents to furnish such certificates to prove that they are free to be married to the residents of those jurisdictions. The certificate stipulates that there is no record of any marriage of the person named in the certificate, that is, the Hong Kong resident concerned.

The Immigration Department completed a review this year which shows that although the wording of the certificate is consistent with the Chinese texts of section 26 of the Marriage Ordinance and section 13 of the Marriage Reform Ordinance, it is inconsistent with the English texts of these provisions. According to the English versions, the authorities may issue certificates to stipulate that there is no record of marriage between certain persons named in the certificates. This Bill seeks to amend the English texts of section 26 of the Marriage Ordinance and section 13 of the Marriage Reform Ordinance to make the wording of these enabling provisions consistent with the wording presently used in the certificate. To put beyond doubt the validity of certificates already issued, the Bill also provides that certificates issued before the enactment of this Bill shall be deemed as valid. Removing the inconsiderencies between the Chinese and English texts of the relevant provisions of the above-mentioned Ordinances will dispel doubts of the public about the validity of the wordings of the certificates.

With these remarks, Madam President, I beg to move.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Marriage (Certificate of Absence of Marriage Record) Bill 1998 be read the Second time.

In accordance with the Rules of Procedure, the debate is now adjourned and the Bill referred to the House Committee.

Resumption of Second Reading Debate on Bill

PRESIDENT (in Cantonese): We will resume the Second Reading debate on the Bankruptcy (Amendment) Bill 1998.

BANKRUPTCY (AMENDMENT) BILL 1998

Resumption of debate on Second Reading which was moved on 30 September 1998

PRESIDENT (in Cantonese): Does any Member wish to speak?

(No Member indicated a wish to speak)

PRESIDENT (in Cantonese): I now put the question to you and that is: That the Bankruptcy (Amendment) Bill 1998 be read the Second time. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

CLERK (in Cantonese): Bankruptcy (Amendment) Bill 1998.

Council went into Committee.

Committee Stage

CHAIRMAN (in Cantonese):Committee stage. Council is now in Committee.

BANKRUPTCY (AMENDMENT) BILL 1998

CHAIRMAN (in Cantonese): I now propose the question to you and that is: That the following clauses stand part of the Bankruptcy (Amendment) Bill 1998.

CLERK (in Cantonese): Clauses 1 to 12.

CHAIRMAN (in Cantonese): Will those in favour please raise their hands?

(Members raised their hands)

CHAIRMAN (in Cantonese):Those against please raise their hands.

(No hands raised)

CHAIRMAN (in Cantonese):I think the question is agreed by a majority of the Members present. I declare the motion passed.

CLERK (in Cantonese): Schedules 1 to 11.

CHAIRMAN (in Cantonese): Will those in favour please raise their hands?

(Members raised their hands)

CHAIRMAN (in Cantonese): Those against please raise their hands.

(No hands raised)

CHAIRMAN (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

CHAIRMAN (in Cantonese): Council will now resume.

Council then resumed.

Third Reading of Bill

PRESIDENT (in Cantonese): Bill: Third Reading. Secretary for Financial Services.

BANKRUPTCY (AMENDMENT) BILL 1998

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Madam President, the

Bankruptcy (Amendment) Bill 1998

has passed through Committee without amendment. I move that this Bill be read the Third time and do pass.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Bankruptcy (Amendment) Bill 1998 be read the Third time and do pass.

PRESIDENT (in Cantonese): I now put the question to you as stated. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority of the Members present. I declare the motion passed.

CLERK (in Cantonese): Bankruptcy (Amendment) Bill 1998.

MEMBERS' MOTIONS

PRESIDENT (in Cantonese): Members' motions. Two motions with no legal effect. I have accepted the recommendations of the House Committee as to the time limits on speeches for the motion debates. The movers of the motions will each have up to 15 minutes for their speeches including their replies, and another five minutes to speak on the amendments. The movers of amendments will each have up to 10 minutes to speak. Other Members will each have up to seven minutes for their speeches. Under Rule 37 of the Rules of Procedure, I am obliged to direct any Member speaking in excess of the specified time to discontinue.

PRESIDENT (in Cantonese): First motion: Encouraging public utilities companies to reduce fees. Mr Gary CHENG.

ENCOURAGING PUBLIC UTILITIES COMPANIES TO REDUCE FEES

Mr Gary CHENG (in Cantonese): Madam President, I move the motion which has been printed on the Agenda.

The economy of Hong Kong is now in its most critical time, as we have recorded a -5% growth for two consecutive quarters. The economic downturn, together with the high unemployment rate and problems such as wage freezes or salary reductions, have been increasing the burden on the public. Therefore, the Government should understand the public sentiment and actively encourage public utilities companies to reduce their fees, so as to put into the practice the spirit of "collective planning and concerted efforts" advocated by the Chief Executive in his policy address and join hands with the people to ride out the storm.

For the first half of the year, many public utilities companies still managed to make huge profits despite the fallout of the financial crisis. According to some statistics, the Mass Transit Railway Corporation wholly owned by the Government has made a profit of some $1.3 billion while public buses have reaped more than $300 million; as for the two electricity suppliers, they have made some $2 billion and $5 billion after tax respectively, yet Hongkong Telecom managed to make the most handsome profit which stood at $6 billion. In approving the various applications for fee increases this March, the government departments and relevant vetting authorities had already taken into account the rate of return as well as the schemes of profit control; as such, the profit levels of the public utilities companies are in fact well protected in practical terms. In the midst of an economic downturn, these companies would of course be subject to pressure on their rate of profit growth, but then again, the hardships and pressures on the public at large should not be neglected either. For this reason, we urge these public utilities to sympathize with the livelihood of the people and take our suggestions into serious consideration.

According to government statistics published in October, 700 000 of our workforce are living below the poverty line with a per capita household income of less than $5,000; in other words, these households are earning less than 50% of the existing median household income level of $10,000. In addition, it has also been published by the Government that of these 700 000 people, 130 000 are earning less than two thirds of the median income or $6,700 each month. It is generally believed that the actual figures would be no less than the government estimations. The Democratic Alliance for the Betterment of Hong Kong (DAB) has recently completed a survey on household and personal consumption expenditure last weekend. The findings revealed that more than 50% of the respondents considered the quality of their living had deteriorated over the past year; besides, over 75% of the interviewees have indicated that their respective household expenditures on water, electricity and gas supply have increased by 10% or more. All these tell us that members of the public have to spend more on their daily necessities on the one hand and face the threats of wage freeze, salary reduction or even layoff on the other. From this we could imagine how heavy the pressure on the public is.

If we look at the whole picture from another angle, we could see that certain items of expenditure could never be reduced however tight the financial resources of a household may be; examples of such items include electricity charges, telephone bills and transport expenses. So it explains why the profit levels of public utilities companies will never be affected significantly under whatever circumstances, and their profit levels are in fact well protected to a large extent.

In the circumstances, will the Government keep standing by with folded arms and let things go on as they are? With regard to the railways, I think the Government should at least take the lead in cutting fees by postponing the collection or collecting less dividends from its wholly owned companies. We certainly understand that the Government should not intervene in the operation of public utilities companies, and the DAB has all along been advocating the adoption of the market-led mode of operation for these companies. Nevertheless, the Government has time and again stressed that it would always take into consideration the affordability of the people in approving the applications for increase in fees. In view of the negative average growth rate in salary levels for the year, the Government should really negotiate actively with the public utilities companies. This is in fact high time for both the Government and the public utilities companies to rally public appreciation.

I could recall from the advertisements that most public utilities would like to put emphasis on their close ties with the public as an attempt to win the public over, and "meeting everyday like friends" is just one typical example of the slogans used. The sole objective behind all these promotion strategies is of course to attract the public to their services. If we call each other "buddy", we should all the more be a real "buddy" during difficult times and forget about "money". By the same token, the public utilities companies should put aside their profit-making objectives to foster a mutually beneficial relationship with the public, as well as show us their sense of social responsibility. What the people need now is these companies' agreement to reduce fees to help them alleviate their heavy burden.

Just as pointed out by some sociologists and economists, one of the most effective ways to expedite the revival of the local economy is to stimulate personal consumption. According to some statistics, the personal consumption expenditures of the people of Hong Kong amount to approximately 60% of the GDP, surpassing the 9% of the Government by an enormous margin. Therefore, in times of hardships, fee reduction should be an encouraging and feasible measure to boost consumer spending and bolster the consumer confidence.

However, as we have seen from our community recently, certain individual companies that are making huge profits are still planning layoffs and salary reductions. it should be noted that whilst the handsome profit could undoubtedly be attributable to the companies' effective marketing strategies, the allegiance and hardwork of their employees are undoubtedly contributory factors of no less importance. As such, the relevant companies really should not kick down the ladder and think no more of their social responsibility or staff relations at this critical moment.

The objective of my moving this motion today is to remind these companies that fee reduction is not only an effective measure to foster links with the public during times of hardships but also one way to lay down the foundation on which a long-term and mutually beneficial relationship with the public develops. However, the financial implication and costs of fee reduction should not be transferred onto their employees. I have moved this motion to urge the Government to encourage the public utilities companies to throw in their lots with the public. It is never my intention to encourage these companies to make smug calculations out of the situation or take discriminatory measues to recoup the profit given up upon public request by cutting the salaries and benefits of employees. Facts have proven that such a practice would only serve to impose negative effects on the image of the companies concerned.

"From Adversity to Opportunity" is the main theme of the policy address published by the Government and the Chief Executive this year. We earnestly hope that the Government would take practical measures to rally the support and active participation of the public and other institutions in order to achieve the objective.

Some people have criticized the motion today as a means to force the Government to intervene in the operation of public utilities companies. However, I should like to remind Honourable Members that my motion only requests the Government to "actively encourage" the public utilities companies to reduce their fees as well as to "urge these companies not to lay off or reduce the salaries of their employees because of the fee reduction". Therefore I hope that Honourable colleagues will lend their support to my motion. Madam President, I so submit.

Mr Gary CHENG moved the following motion:

"That, in view of the current economic downturn in Hong Kong, the high unemployment rate, and the heavy burden on people's livelihood, this Council urges the Government to understand the public's sentiments and actively encourage public utilities companies providing transport, energy and other services to reduce their fees and to urge these companies not to lay off or reduce the salaries of their employees because of the fee reduction."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr Gary CHENG, as set out on the Agenda, be passed.

PRESIDENT (in Cantonese): Members have been informed by circular on 6 November that Mr James TIEN has given notice to move an amendment to this motion. His amendment has been printed on the Agenda. In accordance with the Rules of Procedure, the motion and the amendment will now be debated together in a joint debate.

I now call upon Mr James TIEN to speak and to move his amendment. After I have proposed the question on the amendment, Members may then speak on the motion and the amendment. Mr James TIEN.

Mr James TIEN (in Cantonese): Madam President, I move that the Honourable Gary CHENG's motion be amended as set out on the Agenda.

Madam President, the economy of Hong Kong has entered a period of adjustment since the financial turmoil broke out in October last year. While price levels of properties and consumer goods have all moved downwards, wage and salary levels are no exceptions either. However, the fees charged by public utilities companies, which constitute a significant part of people's daily expenses, have yet to be adjusted downwards. Among the public utilities companies, some have merely agreed to freeze the fees for a year, but there are still individual ones which have gone against the market trend and raised the charge rates.

The Liberal Party could not agree more that public utilities companies should, in the face of the deteriorating business environment of all trades and industries and the employment problems of wage earners, reduce their fees as far as practicable and make every effort to avoid resorting to layoffs or salary cuts for cost reduction purposes. Nonetheless, we must note that no fee reductions should in any way affect the companies' sound financial management, as that would reflect on the development of the companies and quality of their services. In addition, we should not forget that because of the close relationship between the public utilities companies and the people's daily lives, public interest at large will inevitably be affected should the general financial management of any of these companies go into trouble. We should not allow the immediate short-term advantages to blind us to the long-term benefits of the community. For this reason, the Liberal Party has moved an amendment to Mr Gary CHENG's motion to strike a balance by requiring that no fee reductions shall affect the public utilities companies' sound financial management.

How will fee reductions affect the sound financial management of companies? To begin with, the credit rating of the relevant company would be affected. For any public utilities company, if the fee reductions have caused its profit to drop substantially to a level not acceptable to the market, the credit rating and hence the borrowing power of the company will be adversely affected, thereby pushing up the cost of borrowing or even delaying the implementation of new investment projects. As a result, not only the company itself but also the general public would have to suffer in the end.

Let us take a look at the revenue position of the Kowloon-Canton Railway Corporation (KCRC) over the past year. The KCRC's gross revenue from passenger service last year was around $3.1 billion, and of this amount, more than $960 million was profit generated at a rate of return of approximately 9%. If the KCRC cuts the fares by 5%, its annual revenue from passenger service will decrease by $155 million while the rate of return will shrink by 16.7% to 7.5% against last year's 9%. I believe such a drop will impose much pressure on the KCRC's credit rating, taking into account the existing market requirements. In regard to its West Rail project which is under active planning at the moment, the KCRC has envisaged for phase I of the project a financing need of some $20 billion from the credit market. should the KCRC's cost of borrowing be affected by a reduction in revenue, every time the lending bank raises the interest rate by 1%, the KCRC would have to bear an additional burden of $200 million per annum.

Some might think that since public utilities companies are government subsidiaries, unlike the commercial institutions at large, their credit ratings would vary in accordance with that of the Government and will not be affected by their respective financial management situations. It could not be farther from the truth. According to international practices, the credit rating of public utilities companies ancillary to the Government may be lower but never higher than that of the Government, depending largely on the respective financial situation of the companies. As such, a government subsidiary or not, sound financial management is still the lifeblood of the public utilities companies depend their lives, as well as the most important protection for public interests in the long term.

There may be others who think that public utilities companies might just apply for a public listing should they worry about financing problems, since listed companies could draw on the community's financial resources to build up their own strength. I am afraid this is an oversimplification of the matter for if public utilities companies are listed, they are required to pay dividends to their shareholders should they make any profits; as such, the financial burden on listed public utilities companies would become even be heavier.

Madam President, in the face of the current economic downturn and the deteriorating unemployment situation, we believe it is only reasonable to urge the public utilities companies to reduce fees and to avoid laying off or reducing the salaries of their employees because of the fee reduction. This we will certainly support. On the other hand, we think it is equally important to safeguard the sound financial management of the companies. We must therefore srtike a balance between the people's needs and the economic principles, as well as between the short-term and long-term interests of the community. We must keep the various needs in balance and not to let small gains to blind us to significant benefits.

With these remarks, Madam President, I beg to move.

Mr James TIEN moved the following amendment:

"To delete "understand the public's sentiments and actively encourage" and substitute with "discuss with the"; to delete "to reduce their fees" and substitute with "fee reductions that will not affect the companies' sound financial management,"; to add "to make every effort to avoid" after "and to urge these companies"; to delete "not to lay" and substitute with "laying"; and to delete "reduce" and substitute with "reducing"."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment moved by Mr James TIEN be made to Mr Gary CHENG's motion.

Does any Member wish to speak? Mr Fred LI.

PRESIDENT (in Cantonese): Mr Fred LI.

MR FRED LI (in Cantonese): Madam President, after going through the test of the financial turmoil and the sharp fall of the property market, Hong Kong has entered a period of economic recession. Industries, commerce and service trades have all experienced difficulties in operation, and price cuts for the purpose of sales promotion has become the business norm. As for the public, they have to face depreciation of assets, high unemployment rate and the threats of layoff and salary cuts. The burden on people's livelihood has become increasingly heavy.

Nevertheless, we find that some trades still register substantial increases in their turnover and make sizeable profits. In additon, their rates of return have not dropped dramatically because of the economic downturn in Hong Kong. These exceptionally advantaged trades are in fact those public utilities companies which are monopolizing our energy, communications and transport services. They include China Light and Power Company Limited (CLP), Hongkong Electric Company Limited (HEC), Towngas, Hongkong Telecom (HKT), buses and the two railway corporations. As the services they provide are the public's daily necessities, the people are in fact left with no choice. As a result, the turnover of these public utilities companies will not experience dramatic changes as a result of the recession. With the advantage of operating under monopolies and franchises, they will naturally aim at making sizeable profits in pricing.

If these companies still want to achieve the previous high rates of return when the public are now experiencing difficulties in making ends meet, the Democratic Party will consider them greedy and unacceptable. In order to ease the pressure on the public, the Democratic Party now calls on the Government to take the initiative to ask various public utilities companies to reduce their fees. The companies should also carry out their responsibilities towards the community by taking the initiative to reduce their fees in order to tide over the difficulties together with the public.

As far as energy services are concerned, the two power companies, CLP and HEC, are still protected by the profit control scheme which allows the companies to earn 15% of the average net value of their fixed assets as approved profits. If the companies invest in electricity supply through borrowing, the rates of return for the shareholders' capital will become even higher. In fact, for many years, the rates of return for the shareholders' capital of the local power companies have been over 20%, an enormous profit margin. Because of the profit control scheme, the two companies were encouraged to make constant investments to inflate their assets so as to reap profits. And this has led to a surplus of electricity and a sharp rise in electricity charges. One good example is the Black Point Power Station case of CLP. In spite of the fact that the blunder made by CLP in investment has undermined public interests, the Government has not only failed to penalize CLP, but also allow CLP to alter the tariffs structure, apart from increasing charges. We consider this extremely unreasonable indeed. We call on CLP to take the initiative to lower its approved rate of return by reducing its charges to the level in March before the charges were raised. As for HEC which is under similar protection, we hope it will lower its charges to reduce the living expenses of the public.

Although Towngas is not regulated by the Government, it has the advantage of operating under a quasi-monopoly for it accounts for 70% of the domestic fuel market and has more than 1.27 million users. As a result, its performance compares favourably with the two power companies, with its annual rate of return from investment reaching 15% to 16%. In 1998, it registered a net profit of more than $1.3 billion in six months, with a growth of 17%. Judging from Towngas' sound financial situation, we believe it still has much room for reducing charges as long as it is willing to lower its target rate of return.

With effect from 1 January next year, residential telephone line tariffs in Hong Kong will probably rise from the current monthly tariff of $68 to $90. Within the six months up to September 1998, HKT has registered a after-tax profit of $6.1 billion, representing an 1.4% growth over the same period last year. Given that HKT has such a huge profit, I strongly appeal to it not to raise tariffs in order to help reduce the burden on the public.

As CLP, HEC, Towngas and HKT are all financially stable, they should not lay off staff or cut salaries because of an eventual fee reduction. I think they are only trying to threaten people in saying something like this. The Democratic Party will definitely not accept that.

In the long run, I think the local energy market should be liberalized to enhance competition. But it is more important for the Government to formulate fair competition legislation in order to prevent companies enjoying monopolistic advantages from impeding competition and slowing down the pace in market liberalization. Otherwise, consumers will be unable to enjoy the benefit brought about by price competition as a result of true liberalization of the markets as well as other benefits.

As to the public transport companies, I will leave them to the Honourable Andrew CHENG who will elaborate on the issue.

In fact, I have met with CLP and Towngas officials earlier and formally put forward my request for fee reduction. The Democratic Party has also staged signatory campaigns for "demanding public utilities to reduce charges" in various districts and gained great support from the public. We have collected nearly 30 000 signatures within just a short period of time. I hope Honourable Members in this Chamber can understand and sympathize with the public's sentiments and support a fee reduction by the public utilities.

After in-depth deliberations, the Democratic Party has come to the view that the original motion of Mr Gary CHENG has a more distinct intent and objective, that is, it urges the Government to actively encourage public utilities companies providing energy, transport and other services to reduce charges. This is in line with the position of the Democratic Party. Therefore, we support the original motion instead of putting forward amendments. Nevertheless, we find it impossible to support Mr James TIEN's amendment in spite of the fact that we have considered it over and over again. This is because the amendment seeks to delete "understand the public's sentiments" and add "to make every effort to avoid" after "and to urge these companies". In our opinion, the amendment has become weaker in force and the message it conveys is far from being clear. This will give the public an impression that this Council lacks a distinct position on this issue. Bearing in mind that the public utilities have made such huge surpluses, we cannot support an amendment devoid of a distinct position. To avoid being misunderstood by the public, the Democratic Party will oppose Mr James TIEN's amendment but support Mr Gary CHENG's original motion.

I so submit.

PRESIDENT (in Cantonese): Mr LEE Kai-ming.

MR LEE KAI-MING (in Cantonese): Madam President, the economy in Hong Kong is now undergoing a painful period of adjustment. Although our tourism industry has turned relatively stable and shown signs of revival, there is still a possibility for our unemployment rate to rise. According to the forecast made by the International Monetary Fund officials, our economy will start to revive in the second half of next year. But during this extraordinary period, it is indeed inappropriate for us to be too optimistic. We might as well predict more difficulties so that we can make better preparations in anticipation of crises. Only through co-operation, mutual understanding and mutual accommodation of various strata in society can we gradually build up the people's confidence to tide over the difficulties.

There lies an internal pattern, prosperity as well as recession, in economic development. In times of economic prosperity, most public utilities companies in Hong Kong have, by virtue of their own favourable conditions, managed to reap handsome profits. Even though the existing environment makes it difficult to operate business, such public utilities companies as Hongkong Telecom are still able to keep their profits from plummeting dramatically. This proves that this type of companies is operating satisfactorily. In fact, public utilities companies are closely related to the people's livelihood. At the moment, our unemployment rate is still standing at a high level, and the burden on people's livelihood is heavy. At such difficult times, public utilities companies should go a step further from being responsible to their shareholders only. What is more, they should carry out their responsibilities towards the community by lowering their charges. In doing so, they can ease the burden on the general public and show that they are sincere about helping the public tide over these difficult times.

Madam President, in times of hardship, companies with long-term development strategies should attach particular importance to labour relations, care about their employees' livelihood, step up skills training, enhance productivity and strengthen their employees' sense of belonging. Human resources is the greatest asset for enterprises. We must employ appropriate methods in order to make good use of it so as to create profits for the companies and make contributions to society. All these are the symbols of a successful enterprise. On the contrary, if the companies only blindly follow the trend of laying off staff and cutting wages, they will only make people panic and subsequently lead to social instability. As a result, not only will the employees' morale be undermined, their productivity will be affected as well. Moreover, the revival of the economy will slow down and the burdens on the community will be aggravated. These will be detrimental to the companies' image and will definitely affect their reputations. In the long run, these will jeopardize the development of the companies as well.

The Government should also give play to its influence by regulating and co-ordinating public utilities, give positive guidance and carry out promotion to encourage public utilities companies to reduce their charges. At the same time, the Government should urge these companies not to shift their responsibilities onto the staff by laying off or reducing the salaries of their employees on the excuse of fee reduction. When the property prices dropped rapidly, the Government resorted to such measures as suspending land sales and offering the Home Starter Loan Scheme in order to stabilize the property market. At present, the unemployment rate is rising rapidly, and the salaries and benefits of employees are dropping dramatically. I therefore suggest that the Government should, by way of administrative measures, explain to the public utilities companies the pros and cons so as to encourage them to adopt measures which are beneficial to the people's livelihood.

Finally, I hope the Administration and major public utilities companies can heed the public opinions and show their sincerity by reducing charges to ease the pressure on the public. It is the hope of the public in general that all of them can make contributions.

With these remarks, I support Mr Gary CHENG's original motion. Thank you, Madam President.

PRESIDENT (in Cantonese): Mr CHAN Wing-chan.

MR CHAN WING-CHAN (in Cantonese): Madam President, most providers of public utility services in Hong Kong are private companies. With the franchises granted by the Government, they are able to reap hugh profits as they have no competitors and their profits are protected. In order to maintain the profit level, they have been raising their charges every year. As a result of these annual fare rises, the burden on the people's livelihood has become increasingly heavy.

The public could manage to cope with the increases in public utilities expenses when the economic environment was favourable and their incomes stable. But now Hong Kong is in economic doldrums, numerous people are faced with the plight of wage reductions and cuts in benefits. As regards wage reductions, cuts in benefits and the enactment of legislation to protect employees' interests, I will speak on these issues in details in the motion debate next week. Now I am only telling Members in advance.

With the reductions in wages, Madam President, the actual purchasing power of the public has been undermined. Even if the public utilities companies decide not to raise fees, the public's burden has virtually been aggravated. Among the various expenses on public utility services, transport has seen a relatively higher increase. In terms of the transport component of the Composite Consumer Price Index, there has been a rise of more than 17 percentage points in September 1998 compared with 1994. It is even higher than that of fuel and electricity by three percentage points.

In short, transport charges have seen the biggest increase, and the burden in this respect is also heavier. Nevertheless, transport is almost an indispensable expense. In Hong Kong, most people and students rely on public means of transport to go to work and to go to school. To save transport expenses, they can only resort to other cheaper modes of transport such as buses. Madam President, I take buses every day and very frequently.

According to the findings of a telephone survey conducted by the Democratic Alliance for the Betterment of Hong Kong, nearly 50% of the respondents spend more time on taking cheaper modes of transport for the sake of cutting down on transport expenses. What they actually do is to exchange their time for money just for the sake of saving some more money.

This also illustrates that, under the current economic depression, buses become the most popular mode of public transport as bus fares are cheaper. As for those modes which charge higher fees such as taxis and railways, it is unavoidable that they have reduced patronage. In the survey, more than 30% of the respondents indicated that they would reduce the frequency of taking taxis, whereas about 10% replied that they would reduce the frequency of using the railways. As far as the public is concerned, it is obvious that choices have narrowed insofar as the mode of transport is concerned because of the weakening of their financial capability.

Because of the weakened purchasing power of the people, we consider a freeze on fares alone inadequate. Various transport operators must reduce their fares in order to cope with the affordability of the people.

The Hong Kong Federation of Trade Unions has formed the view that under such an economic situation, the Government should refrain from collecting dividends from the two railways in order to encourage the railway corporations to try their best to lower their fares. We are aware that the Financial Secretary is authorized to collect dividends from the Kowloon-Canton Railway Corporation (KCRC) and Mass Transit Railway (MTRC) Corporation every year. For instance, in 1996, the MTRC paid a dividend of $647 million to the Government, and in 1997, the dividend paid even topped $1.252 billion. The Government can consider the dividend from the MTRC as it is more substantial. The KCRC, on the other hand, did not pay any dividends to the Government in 1997. It should suspend paying dividends to the Government this year as well.

For the time being, the Government should stop collecting dividends and, at the same time, encourage the railway corporations to reduce their fares. So doing, the railway corporations can cover the losses incurred as a result of the fares reduction with the dividends, without jeopardizing the operation of the MTRC or KCRC. The burden on the public can be reduced as well. This is going to kill two birds with one stone as the number of commuters will definitely rise. It is for these reasons that I hope the Government can consider the matter carefully.

Various public utilities companies have, in the past, reaped huge profits. With the dramatic reversion of our economic environment, they should lower their target profit levels to tide over the difficulties together with the public. But in lowering their profits, they should not at the same time resort to layoff and wage cuts as a means to reducing costs. With the shrinkage in the number of vacancies, it is indeed difficult for employees to find new jobs once they are made redundant. Furthermore, the companies should not reduce their employees' wages and benefits when they are still making hugh surpluses.

Hongkong Telecom is the worst example. With an after-tax profit in excess of $10 billion last year, the company is still preparing to cut its employees' wages and benefits. This will not only seriously undermine the employees' morale, but also damage the company's image, thereby setting up a very bad example. Other public utilities companies should, drawing a lesson from this, resort to broadening their sources of income as their principal strategy, improve their service, boost their clientele, as well as raising the profit level. At the same time, they should not acted indifferently by resorting to layoff and salary cuts, ignore the efforts made by their employees to reap hugh profits for the companies in the past, and reduce their salaries and benefits. Thank you, Madam President.

PRESIDENT (in Cantonese): Mr Bernard CHAN.

MR BERNARD CHAN (in Cantonese): Madam President, the topic today relates to fee reduction by public utilities companies. Next week, the Honourable CHAN Wing-chan will put forward a motion focusing on salary reduction. What I have been concerned about is that as yet we do not have a consensus in the community to recognize that we are confronted with a total and yet inevitable economic downturn. People may have to face salaries cuts. Companies will need to consider reductions in fees and rents. The Government will have to reduce taxes and rates. The whole economy will need to trim excess burden. All this may come as an alternative way to achieve the effects of currency devaluation so that we can remain competitive and survive in the difficult times.

I agree with Mr Gary CHENG's proposal of demanding a fee reduction by public utilities companies. But if all we want is to stop them from laying off workers or cutting their salaries, I am afraid this is just wishful thinking.

We need to understand that reduced or destabilized revenue for public utilities companies would become a negative factor for them as it would cast doubts among lenders as to their ability to repay loans. Under such circumstances, this will increase their cost of borrowing. When they need finance for development of new items, the overall pricing of the services they provide will be increased to the disbenefit of consumers eventually.

Therefore to maintain a sound financial position, a commercially viable way is to trim, that is, to reduce operating expenditures including staff salaries. But I hope that in the trimming process, the interests of their staff will be fully taken care of.

If the financial position of the companies are fully capable of absorbing the losses incurred by fee reductions, for example, if they have sufficient surpluses, then there is no reason that they should wield the axe at their own staff simply for the sake of shareholders' interest. I believe the only way to continue to survive is to trim the entire economy so that we can cope with keen competition in the region and the poor economic climate.

Madam President, I support the amendment by Mr James TIEN.

PRESIDENT (in Cantonese): Mr TAM Yiu-chung.

MR TAM YIU-CHUNG (in Cantonese): Madam President, since the delivery of the second policy address by the Chief Executive after he took office, the property and stock markets suddenly rose before the people of Hong Kong like a rainbow after the rain. But the Financial Secretary and some people who are well versed in our economic situation have dutifully played the role of an observatory by reminding us repeatedly that the typhoon season is not yet over, and that the public must make good preparations for the storm. Given that the warning signal is still hanging up high, I hope both the Government and public utilities companies can lend the public a helping hand without any delay and show that they are willing to provide them with an umbrella to protect them against the stormy weather.

According to the latest information furnished by the Census and Statistics Department, up to the second quarter this year, the number of employees who draw a monthly income of less than $5,000 has risen by 6% over the whole of last year. A recent survey conducted by the Democratic Alliance for the Betterment of Hong Kong (DAB) in connection with the consumption expenses of households and individuals also shows that more than 50% of the members of the public were forced to economize on food and clothing over the past year, and that the living standards of the public have been worsening gradually. Let us look at the situation of public utilities companies. In the first half of 1998, all public utilities companies registered huge surpluses, with $4.9 billion for the China Light and Power Company Limited, $1.9 billion for the Hongkong Electric Company Limited and $1.3 billion for Towngas. As for public transport, the Mass Transit Railway Corporation recorded a surplus of $1.28 billion, $989 million for the Kowloon-Canton Railway Corporation, $288 million for the Kowloon Motor Bus, and $36 million for Citybus.

What the DAB only wants to do is to take a scoop of water from a big reservoir which has an abundant supply of water and give it to those people who are struggling for survival in the desert by asking public utilities companies which are still making profits and at the same time protected by monopolistic or franchise agreements to reduce their charges. We think that they are fully capable of meeting such a demand, which I think is also reasonable.

I would like to take this opportunity to talk about bus fares. As we are all aware, residents of the Western New Territories, particularly those living in Yuen Long and Tuen Mun, principally rely on buses to go to the urban areas. Nevertheless, bus fares have been rising every year, thus imposing a heavy burden on the people living in the district. Even if we calculate in terms of a median income of $10,000, the monthly expenses on bus fares will have taken up 10% of the income if one has to make two journeys to and from the urban area every day, not to mention the fact that most of the residents draw an income of only several thousand dollars. According to an opinion poll conducted by the DAB, as many as 75% of the residents opine that bus fares are too high. 72% of the residents even indicate that they fail to get their money's worth as far as bus services are concerned. These figures illustrate that bus companies must not only raise their standards of service constantly, but also lower their fares to ease the burden on the public.

In fact, under the protection of the profit control scheme, these public utilities companies have been raising their fares as a matter of course every year. It seems that the practice of raising fares has become sacrosanct. An increase below the inflation rate will already be treated like infinite royal graciousness bestowed by the emperor. It is oddly enough that nowadays even government departments are required to undergo trimming exercises to save expenditure and raise productivity by spending $100 as if it were $105; why are these companies still allowed to stay aloof from the exercises? And as a result of this, they can continue with their bad habits of "fleecing the public if they fail to make enough profits", never being mindful of the need to review its lavish spending.

Recently, the Government invited new bids for a number of ferry routes after its negotiations with the Hongkong and Yaumati Ferry Company Limited (HYF) in respect of the development of the pier's superstructure broke down. During the open tender, the HYF offered numerous terms which are favourable to consumers and succeeded in regaining the rights to operate a number of ferry routes. But when the company negotiated with the Government at the beginning, it had failed to put forward such conditions. Like a timely exhortation, this incident reminds us of the fact that many a thing that should be done is not done not because it is impossible rather because it has been chosen not to be done. Perhaps we should not put all the blame on HYF. In fact, it has become a matter of course for the company to make a profit every year and to raise its fares if the profit is not enough. As it stands, I believe no company will be able to find incentive for self-betterment.

As far as the Government of the Hong Kong Special Administrative Region is concerned, the HYF incident is an experience that we should all bear in mind. Public utilities companies should be able to maintain its profit by raising its productivity and efficiency. In times of difficulty, they should lend the public a helping hand. From now on, fare rises should not be done at a fixed interval like taking a bath or having a meal. On the other hand, fare reduction should not be treated like the statue of a god in a chapel that no ordinary people are allowed to touch.

With these remarks, I support the original motion.

PRESIDENT (in Cantonese): Mr LEUNG Yiu-chung.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, at a time when the unemployment rate is running high and the public are eking out a living, it is indeed necessary for various public utilities which are closely related to people's livelihood to reduce their charges. This is also what the majority of the public wants. In the past, under the protection of the Government, numerous franchised, semi-franchised and monopolistic public utilities made huge profits and raised charges indiscriminately. Now they should reduce their charges drastically so as to give consumers and the public a fair deal.

Nevertheless, I find the original motion not here or there for it only asks the Government to encourage public utilities companies to reduce their fees, without asking the public sector organs which are in control of social resources, particularly government departments, to reduce their charges. For one thing, the motion fails to achieve a radical effect in easing pressure on the public. For another, how can the Government encourage private or privately-run utilities to reduce their fees if it fails to "set a good example" by taking the lead to reduce charges?

For these reasons, I urge the Government to "take the lead" to reduce the public sector organizations' charges so as to set a good example for privately-run utilities to reduce their fees. Otherwise, it will be hypocritical of the Government to encourage privately-run utilities to reduce their fees, so to speak.

As a matter of fact, the fees-charging services provided by the public sector organizations represent a very important part in the daily lives of the people in general that is, "clothing, food, shelter and transport". In my opinion, it is particularly important for essential charges such as public housing rental, fares of the three railways, water and sewage charges to be cut expeditiously in order to safeguard the people's livelihood.

To start with, it is undeniable that the grassroots are most concerned with public housing rental. A large majority of the existing 600 000-odd public housing tenants come from the middle and lower strata. For them, public housing rentals take up a comparatively large share of their daily expenses. Rental reduction is therefore the most direct and effective way of alleviating the burden on people's livelihood,. At present, although the Housing Authority has adopted the general practice of freezing rents, the cumulative rental increases over the past few years have reached a very high level. In addition, there is a tendency for private buildings to adjust their rents downward in the next few years. Therefore, there is no reason for public housing rentals to maintain at such a high level. As the biggest landlords in Hong Kong, the Housing Authority and the Government are obliged to reduce public housing rental so as to alleviate the burden on people of the middle and lower strata.

Secondly, the three railways operated by the Mass Transit Railway Corporation (MTRC) and the Kowloon-Canton Railway Corporation (KCRC), namely, the Mass Transit Railway (MTR), Kowloon-Canton Railway (KCR) (East Rail) and Light Rail Transit, handle 3 million passenger journeys daily. These modes of transport have turned into something almost indispensable in people's daily life. As such, a fare reduction by these three railways will give the public tremendous help. In fact, we can see from the performances of the two railway corporations that there is large room for a fare reduction. Last year, the MTRC reaped a net profit of $2.8 billion and the dividend paid to the Government even topped $1.25 billion. If the MTR stops paying the dividend for the time being, it can well manage to cut its fares by 20%, without affecting the reserve profit of the company at all. As for the KCRC, its net profit even topped $3.3 billion last year. Moreover, the KCR is not servicing any debts at all. Therefore, it will have virtually no difficulty in reducing fares.

The third thing the Government can do is to reduce the charges levied by various services provided by the public sector. Among these services, I believe water and sewage charges in particular have the greatest impact on the public. In publishing the Budget in February this year, the Financial Secretary announced the freezing of a large proportion of government service charges for one year. Undoubtedly, the Government's decision is not bad. But I think this is not enough. The Government should further reduce its charges to really achieve the objective of "riding out the storm". Given the fact that the Government has more than $400 billion in fiscal reserves, the impact of a reduction in government charges on the overall finance is basically negligible. But for individual members of the public, the reduction can effectively ease the burden on their livelihood.

Therefore, insofar as easing pressure on the public is concerned, I consider both the public sector organizations and public utilities companies, particularly those franchised or public service organizations which offer no alternative to the public, should shoulder their responsibilities of cutting on charges. Therefore, in encouraging public utilities companies to reduce their charges, the Government should at the same time take the lead to reduce government charges. In particular, the Government should, as I mentioned earlier, reduce public housing rental, fares of the three railways and other government charges before it can give other private organizations an incentive to reduce charges. As such, I hope that the Government can put these proposals into practice.

Madam President, I so submit.

PRESIDENT (in Cantonese): Mr CHAN Kam-lam.

MR CHAN KAM-LAM (in Cantonese): Madam President, Hong Kong is now at a period of severe economic adjustment and the public are compelled to withstand the pressures brought by wage freeze and salary reductions and even layoffs and dismissals. These are indisputable facts. We understand that our economy will not revive overnight and to tide over these difficulties, a lot of people have already tried their best to live frugally and cut expenses. But there are some items of expenditure that cannot be further cut, such as the expenses on children's education, housing, transport and public utilities such as fuel, electricity and gas, and all these take up a fairly large share of the total expenditure of every household. Although the Government has put forward some measures for alleviating people's hardships earlier on, there is a heavy burden on people's livelihood as they are meeting a severe economic test and have incurred huge economic losses. The Democratic Alliance for the Betterment of Hong Kong (DAB) earnestly hopes that the public utilities companies closely related to the daily lives of people, especially those energy organizations with huge reserves, can understand the public's sentiments and reduce the fees of their services.

Madam President, the Hong Kong and China Gas Company Limited (Towngas) announced earlier that it would not increase fees next year, lay off staff or reduce their salaries. The DAB welcomes this and hopes that it can become a model for other bodies. However, but we certainly do not hope that it will use this as an excuse for a fee increase in future.

In fact, Towngas has always been in a leading or even monopolistic position in the local gas fuel market. It serves a customer base of more than 1 million, that is, 70% of all local households. With the vigorous housing construction scheme of the Government, the market share of Towngas will become larger and larger. If it adjusts its fees, at least more than half of the people in Hong Kong will be affected. Therefore, if Towngas can make a suitable fee adjustment, it will definitely win the applause of more than half of the Hong Kong population.

The Hongkong Telecom (HKT) which has been making the highest profits proposed a wage reduction for all staff earlier on under the pretext that it would earn less after the liberalization of the market. It even threatened that staff would be laid off, triggering off a widespread scare among all staff. Although HKT temporarily shelved the scheme under pressure exerted by various parties, it has nonetheless brought up the issue again lately. But the DAB finds the reasons given by the HKT far-fetched. Although the liberalization of the market will inevitably subject HKT to operational challenges, the company has received $6.7 billion cash subsidies from the Government early this year. Taking into account the mechanism for fee adjustment in the next few years, HKT has actually been given ample compensation. For that reason, the DAB thinks that HKT should conscientiously consider delaying an increase in local telephone tariffs at this harsh period.

Madam President, along with the changes in the franchises of the two bus companies, the two power companies become the only public utilities companies in Hong Kong still "regulated" by a profit control scheme. This Profit Control Scheme formulated some 30 years ago allows the two power companies to make abundant profits every year even though there is an economic downturn. Can any other business make 23% profit under the present economic conditions? Even the Secretary for Economic Services is openly calling upon the two power companies to reduce their fees.

After the China Light and Power Company Limited (CLP) has increased fees early this year, its profits in the first half year reach $4.9 billion, much more than the $6 billion profit projected early this year. Without extensive consultation, CLP changes the fee structure from a three-tier system to a four-tier one, obliging a lot of households to pay more electricity fees ─ a result which has been widely criticized. We think that CLP should reduce fees at least back to the level before the fee increase while changing the charging system into a four-tier system under which fees are collected bimonthly. Moreover, the gap between tiers of fees should be widened so that its "save time, money and efforts" slogan can really be put into practice.

Madam President, in addition to the several large public utilities companies, I would like to talk about the prices of petroleum products to let Members know how ridiculous the relevant fees are in the absence of anti-trust legislation now.

At present, 870 000 households are using liquefied petroleum gas (LPG) as fuel while there are six companies competing against one another. However, there is not any competition to speak of under a "cartel" type monopolization.

According to information provided by the Census and Statistics Department, in the two-year period from September 1996 to August 1998, the average LPG import price was $1.93 per litre while the average retail price was $8.23 and petroleum companies made net profits more than 300%. From November 1997 to July 1998, the import price kept falling from $2.05 to $1.12, recording a 45% drop. However, the retail price charged by petroleum companies remained unchanged at $8.35 per litre after all and their profits dramatically increased from 300% to 650%!

Madam President, the DAB once again calls upon the petroleum companies making fat profits to make a substantial downward adjustment in petroleum prices. We also call upon the Government to start studying how a mechanism for true competition can be introduced into the existing fuel markets, including the markets for gas and LPG.

In the DAB's view, Hong Kong is undoubtedly a capitalist society practising free economy and we must safeguard the integrity of the system and protect it from infringement. Any private enterprise investing and operating in Hong Kong should be encouraged and protected. This is the long standing position of the DAB, and we also think that investors should make reasonable profits from their business. That the DAB is today openly calling upon public utilities companies to reduce fees does not imply that we intend to interfere with their operation. Quite on the contrary, we regard these enterprises as closely linked with people's livelihood. Despite the overall economic adjustment, the public utilities companies are not affected at all and they can still make abundant profits as what they have been doing over a long period of time. The DAB considers that since the public utilities companies have been serving Hong Kong for a long time, they should show sympathy for the public who are worried, keep improving their services, effect sounder business management as well as further develop their business in order to make reasonable profits instead of merely going after substantial profits.

Madam President, I so submit in support of the motion.

PRESIDENT (in Cantonese): Mr NG Leung-sing.

MR NG LEUNG-SING (in Cantonese): Madam President, after the financial turmoil, there has been a significant economic adjustment and all trades and industries are facing great operational difficulties. Some operators are forced to close down their business while those who continue have to enhance their competitiveness by cutting costs and prices. This is a natural consequence of deflation and stagnant economic activities. The livelihood of wage earners in Hong Kong has also been seriously affected by the economic downturn, and many are making reduced income or even unemployed. In the past, public utilities companies used to keep increasing their fees along with our economic development and inflation, but today, if they freeze their fees under the current economic circumstances while remaining financially sound, or even suitably adjust their fees if their practical conditions permit this, their action can certainly alleviate people's hardship and will surely be welcomed by all.

However, public utilities companies in Hong Kong have all along been operating according to commercial principles, and the MTRC and the KCRC among them even enjoy statutory autonomy insofar as fare determination is concerned. These are factors that we must respect. To strive to alleviate people's hardship, the Government can definitely and should actively negotiate with the public utilities companies, understand their financial situation and express the public's views and concern about a fare reduction. At the end of June this year, the two railway corporations made timely announcements to freeze their fares. This is a good example of mutual accommodation and sincere co-operation by all sectors of the community.

The public at large knows very clearly that the asset values of public utilities companies mean the values of the public's property and we should support the financial stability of public utilities companies. Under the financial turmoil, all trades and industries are affected by significant interest rate fluctuations and the credit crunch. We should be concerned about the existing liabilities and the prospects of future financing of public utilities companies especially when we are going to continue to carry out large-scale transportation infrastructural projects. Responsible public utilities companies will have to secure loans to raise capital at reasonable interest rates, and thus they must show investors their stable financial situation and future profitability. Given that if we wish to list a public transport corporation on the market in future in order to generate revenue for our fiscal reserves for the purpose of improving the prospective tight financial position of the Government for a certain period of time in the coming days, then it is extremely important for companies intended for listing to maintain a sound financial situation and effective performance. Moreover, in keeping with social progress, these public utilities companies should also continue to improve their existing services. On the one hand, they have to make effective use of their existing operational resources, and on the other, they must put in new capital relying on reasonable returns. Another point to note is that we do not wish to see public utilities companies taking actions against their staff and reduce their salaries or even lay them off to ensure specified results and development under the present economic circumstances. Due to practical reasons in consideration of the property of the public, when the Government negotiates with public utilities companies regarding their fees, both parties should be sincere and understanding, and prudently balance between the merits and demerits taking account of the overall interest of all people of Hong Kong.

Madam President, I so submit.

PRESIDENT (in Cantonese): Miss CHAN Yuen-han.

MISS CHAN YUEN-HAN (in Cantonese): Madam President, concerning the fees or charges of public utilities companies, over a fairly long period in the past, we actually heard complaints from the grassroots and wage earners that the fees were high, especially the fees of some means of transport and fuel. That the fees were high because they took up a very large portion of the people's income. For instance, the fees of the Mass Transit Railway (MTR), the Kowloon-Canton Railway (KCR) or even buses are high. The fees of the relevant public bodies become even more conspicuously high especially when the community is having financial difficulties and many workers are in the plight of having no wage increase or having their wages or benefits reduced. For a few years, the Hong Kong Federation of Trade Unions (FTU) has been telling the Government that a subordinate trade union has conducted quality of life surveys for eight consecutive years and it finds that the public keep complaining about the exorbitant transport and fuel fees. With the exception of trams (people have not much complain about trams), the fares of the other means of transport including the MTR, KCR and buses are very high. These views have always been raised and the Government has always given us explanations. Nevertheless, under the current financial circumstances, if our society as a whole has to tide over the difficulties together and help one another in the same boat, should these public utilities companies ponder over whether a further fee reduction can be made, in addition to an announcement on a moratorium on fee increase? I really hope that the Government will consider this further.

Just as my Honourable colleague, Mr CHAN Wing-chan, has said, we met the Financial Secretary two weeks ago and asked him if the Government could stop collecting dividends from the two public bodies wholly-owned by the Government, that is, the MTRC and the KCRC and subsidize fares with the dividends due to alleviate the pressure of a fare increase. We all know that transport and fuel fees are high, and given the current financial difficulties, should the Government not care more about the people's livelihood? If the Government similarly thinks that we should tide over the difficulties together or help one another in the same boat, it will naturally get a positive response from the public. For instance, the Financial Secretary's announcement yesterday that the Government intended to evaluate rates on a yearly basis was favourably received by the public and they will not forget the good deeds of the Government. In view of the present situation of public utilities companies and their high fees, officials of the departments concerned should discuss with these companies to see whether they can come up with ways to reduce fees in addition to not increasing them. Let us think about this. If people who originally earn $10,000 a month find these fees very high, and if they only earn some $5,000 now, we can imagine how expensive the fees appear to them. Therefore, if the Government is willing to think more in this direction, I think that it can tackle this in many ways.

Furthermore, in the light of the existing circumstances, other than asking the Government to actively encourage public bodies to reduce fees, I also want to tell these public bodies that they have their roots in Hong Kong. These bodies have developed from small companies into their present scale much in the same way that Hong Kong has developed from a fishing port. For example, Hongkong Telecom (HKT) has developed from a telephone company into a big financial group. Were it not for Hong Kong's development, HKT would not be a big financial group today. Hong Kong has brought HKT up. No matter whether these companies have gradually become multinational companies or whatever, Hong Kong people have been paying them fees and nurturing them in the meantime. Fine, these organizations are still making great profits now that we are in an economic downturn. However, HKT claims that it may have to lay off employees and that if their employees are unwilling to accept a wage reduction, some of them will be laid off, all for the purpose of a profits target of $6 billion. I think that the Government can do something against these organizations, and it all depends on how the Government wants this to be done.

Public opinions are generally against HKT. As I have observed, people very often say that we have to help one another in the same boat to tide over the difficulties, and I fully agree with them. All Hong Kong people are living on this small island and I really hope that every person and organization will go one step further at this difficult time. Now that we have to tide over difficulties together and help one another in the same boat, but some organizations are just pinpointing at their employees and the grassroots, forgetting that they themselves have to make efforts, how can we tide over difficulties together and help one another in the same boat? I often find it very sarcastic that these organizations, which are already making great profits, will still take advantage of this stormy time to hit people when they are down or claim that they will not increase fees for the moment while taking many other actions.

An Honourable colleague has earlier praised Towngas. It is true that Towngas has said that it will not increase fees or lay off employees, but the company has recently taken a series of disgusting actions against their employees. The FTU will discuss with these employees about their frustrations. I sincerely hope that all the relevant public utilities companies can discuss problems with their employees in the face of difficulties and I believe that every employee is willing to go a step further in order to allow the companies to operate in a better manner. I am sure that people who make a living by working in these bodies or those living in Hong Kong wish that this can be done. It is a great pity that companies such as HKT has disappointed us. It has made a few billion dollars of profits within a few months, but it still claims that it may have to take action against some employees in the face of imminent competition. Frankly speaking, I know that many Members present are businessmen. All those who run businesses have to face competition and may have to encounter many new problems. For example, there may be currency fluctuations next year and many organizations may have to make preparations in the face of these currency fluctuations. But all the responsibilities for these problems cannot be borne by the employees alone. On the contrary, these organizations should put the interests of employees in priority consideration. Therefore, I hope that the Government will encourage these organizations to reduce fees and that the relevant public bodies will bear in mind the fact that they can become multinational companies and big financial groups today because they can develop in synchrony with Hong Kong. However, these companies should help one another in the same boat in times of difficulty, and they should not shift the responsibilities for the difficulties onto the shoulders of the public and the wage earners.

With these remarks, Madam President, I support Mr Gary CHENG's original motion. Thank you.

PRESIDENT (in Cantonese): Miss CHOY So-yuk.

MISS CHOY SO-YUK (in Cantonese): Madam President, those public organizations which are subsidized by the Government can enjoy long-term and stable income. They often earn substantial profits as well. In view of the current economic downturn and the heavy burden on people's livelihood, I consider that the Government should understand the people's sentiments and encourage public organizations under it to freeze or even reduce their fees. I would like to express my views on the tariffs in Hong Kong's telecommunications market in particular.

Earlier on, the Government pointed out that if the Hong Kong Telecommunications Limited (HKT) applied for an increase in local telephone charges from $68 to $90, permission would be granted. In my opinion, we should not strongly object to tariff increase by public utilities companies on the ground of economic recession provided that the increase is reasonable and based on sufficient justifications even though the company concerned does not understand the people's plight. This is because these public bodies are commercial organizations which have to face rising costs and wages after all. However, HKT should not use this argument for its application for tariff increase.

According to the agreement made between HKT and the Government on the issue concerning the international telephone franchise last year, HKT is allowed to raise local telephone tariffs progressively from 1 January 1999 if the company gives up its franchise and open up its network to other fixed telecommunications network services (FTNS) operators. In my opinion, if HKT can really satisfy the requirements in the agreement, a tariff increase can be acceptable. Here I would like to stress the phrase "can be". But the biggest problem is that HKT has fundamentally failed to meet the requirement of genuinely liberalizing the market.

Since I have raised the point that HKT had monopolized the market in another motion debate a few month ago, I do not want to repeat those points here. However, it is an indisputable fact that HKT has monopolized the market, abused its vantage position and adopted various unfair competition practices against its competitors. Although HKT has currently opened up its exchanges for Type II interconnection by other FTNS operators, the daily quota for such connection is limited. According to practitioners in the industry, although HKT said that 32 circuits could be provided to each operator in each of its exchanges every day, in fact, less than half of that number is provided. With such a rate of progress in interconnection, it will at least take six to seven years for other FTNS operators to achieve a 50% liberalization rate in Type II interconnection. Please do not forget that the Government has allowed HKT to increase tariffs at will three years later. It can even increase local telephone tariffs from 1999 onwards. What is most disappointing is that HKT can in fact speed up the progress of interconnection, but it deliberately delays the pace so as to obstruct the development progress of its competitors. Its intention is as obvious as SIMA Zhao's ill intent which is known to all. In my opinion, when the market maintains at a sham liberalization and a de facto monopoly, it is too early to say that HKT can apply for a tariff increase, even if it is allowable by the Government. Unfortunately, the Government earlier said that it was understandable for HKT to increase its tariffs, misleading the public that a tariff increase by HKT is reasonable!

All this shows that the Government has created an illusion in the past. It has misled the public on to a ridiculous equation: an opening up of the exchanges is equivalent to market liberalization, which in turn is equivalent to wider choices for the public. Wider choices for the public is then taken to mean dwindling income of HKT which gives it justification to raise its tariffs. Facts have clearly shown that Hong Kong's telecommunications market is still being monopolized by HKT. The Government's so-called market liberalization is nothing but a continuous issue of new licences. Yet, HKT can still tightly suffocate its competitors by manipulating the progress of interconnection. Even if more competitors enter the market, they can only chase after the meagre market share. If HKT does not change its attitudes while more and more competitors join the market, the new entrants, facing a dwindling market share, will encounter operational difficulties and incur losses. They then have to fold up and beat a retreat. In the end, the most saddening outcome is that HKT is still a monopolistic company which can do whatever it wants.

The Government's purpose of compensating HKT with an enormous sum of money is to fully liberalize Hong Kong's telecommunications market. In view of the present development, the Government's calculation has been wrong. If the Government still refrains from taking any action, I am sure that Hong Kong's telecommunications market will never be truly liberalized. By that time, not only the ten billion-odd public money will be wasted, public interests and the future of Hong Kong's telecommunications industry will also be sacrificed! I hope the Government and Members of this Council will pay twice as much attention to this issue as possible!

With these remarks, Madam President, I support the motion.

PRESIDENT (in Cantonese): Mr LEE Cheuk-yan.

MR LEE CHEUK-YAN (in Cantonese): Madam President, in handling numerous labour disputes I find "wage earners" will react very angrily whenever a pay cut is involved. Their question is: Why do the commodity prices remain the same in spite of the fact their wages have been cut? And why are public utilities fees not reduced? These are the core questions of our debate today.

It is easy to reduce wages but it is difficult to reduce commodity prices. News about pay cuts can be heard every day. Some workers have their wages reduced by 10%, and some 50%. When an organization intends to cut wages, it often urges the "wage earners" to tide over the difficulties together. But I want to ask: Who is going to tide over the difficulties with the "wage earners"? Are the consortiums going to tide over the difficulties with the "wage earners"? Are the public utilities companies and consortiums going to tide over the difficulties with the "wage earners"? Is it fair that they urge the poor to tide over the difficulties with them while they themselves create the difficulties? I think the whole problem is that the entire community is very angry because the poor and the petty citizens are frequently asked to make sacrifices but those big consortiums which make several hundred million or over ten billion of dollars a year can keep on raising fees or, freeze their fees at best, which will be seen as bestowing "infinite royal graciousness". Why does not a single consortium or public utilities company take the lead to reduce fees in a bid to tide over the difficulties with the public? Do they really have no responsibility to tide over the difficulties with the public? When the economy was doing well, these companies earned a lot of money. The KCRC, the MTRC and even other public organizations were able to pay dividends to the Government. They could even receive bonuses during the good time. But could it be said that they have no responsibility at all to alleviate the people's hardship during the bad time? The KCRC and MTRC, in particular, are wholly-owned by the Government. In 1997, the MTRC earned $2.7 billion and gave $1.2 billion to the Government as dividends. In the same year, the KCRC earned $3.2 billion and the whole sum was set aside as reserves for the future construction of the West Rail. For the MTRC, a 10% reduction in fees means a decrease in revenue by $0.6 billion. While for the KCRC, a 10% fee reduction means a decrease in revenue by a little over $0.3 billion. As far as the two corporations are concerned, I wonder if the total loss of $0.6 billion will mean a lot to them. The Government can even reduce the fares by more than 20% if it can surrender all the dividends it has previously received. But the question remains whether the Government is willing to surrender the money. I hope the Government will later tell us whether it is willing to do so.

The Government should surrender the money in view of the current difficult economic environment and the hardships suffered by the public. Similarly, the two power companies and the two bus companies have made substantial profits over the years. Should they not tide over the difficulties together with the public when we are in hard times? In the amendment moved by Mr James TIEN today, it is specified that: "fee reductions that will not affect the companies' sound financial management". In elaborating on the amendment, Mr TIEN made it very clear that it was imperative that these companies' credit ratings should not be undermined. I wonder how the line should be drawn since he said even a 5% reduction was unacceptable. If a 5% reduction is unacceptable, this will mean that no fees shall be cut. In that case, he had better oppose the original motion than to move an amendment. If a 5% reduction is unacceptable, what else can we say? If the amendment is not willing to accept a 5% reduction, it will be the same as opposing any fee reductions. His arguments are exactly the same as Mr YEUNG Kai-yin's a few days ago: We should not do anything that will affect the credit ratings and finance of the KCRC. Actually, in saying so, he is asking the existing passengers to subsidize the KCRC in constructing the West Rail in the future. Is this a right approach? Should the corporation be allowed to do so, particularly in such a hard time? It is a pity that petty citizens do not have any international credit ratings. No one will care a damn about us since we lack international credit ratings. We are of no importance to the banks or consortiums.

Of course, I understand the goodwill of Mr James TIEN. What he really wanted to say is that he does not want us to be burdened with too much interest payments in the future. However, if the Government is willing to inject capital, can the problem be resolved? Now that the Government has injected over hundreds of billions of dollar into the stock market, can it not make a similar injection into the two railways? We are not urging the Government to subsidize the two railways out of public coffers. We are just asking the Government to treat it as an investment as it is commonly said that: to intervene in the market does not mean to prop it up; it is an investment. As it stands, can we not ask the Government to invest in the two railways? The Government will definitely be able to validate its argument and justify itself. So, I hope the Government will seriously consider this suggestion. But of course the whole debate centres around a crucial question ─ a structural problem which is very difficult to solve. This is because the law stipulates that the two railway corporations should operate according to commercial principles. In my opinion, if we are to discuss the legislation in an in-depth manner, the most important thing for us to do is to consider whether the respective ordinances should be amended in the future. If the provision concerning the commercial principles is not to be repealed, it will be difficult for Mr Gary CHENG's motion to achieve its objective because we are restricted by the commercial principles. Therefore, in order to discuss the issue in an in-depth manner, we will need to take the fundamental approach of amending the legislation for the purpose of deleting the commercial principles provisions to change the nature of the two railway corporations completely. Only in so doing can we further discuss the question on the motion tabled today.

I think another reason for supporting today's motion on fee reduction is to stimulate the economy because we need to do so now. According to my calculation, a 10% reduction in fees by the two railway corporations, the two bus companies, the two power companies and Towngas will help the public save $5 billion for consumer spending. In so doing, a fee reduction can, on the other hand, stimulate the economy. Apart from this, I would like to point out that the development of new towns have extended to remote areas. Residents living there have to pay extraordinary high transport expenses. If fees can be reduced, their situation should be taken into special account because Hong Kong people in general spend approximately 7% of their income on traffic expenses. If we can reduce the fees, particularly the fares of long-haul buses in new towns and long journeys, the residents' livelihood will not be affected even if they need to work in remote areas. This is more important as far as the residents are concerned. So, I rise to speak in support of the original motion and oppose the amendment today. Thank you, Madam President.

PRESIDENT (in Cantonese): Mr Andrew CHENG.

MR ANDREW CHENG (in Cantonese): Madam President, my speech will focus on transport and the fees of public utilities companies such as the two railways and buses. Madam President, buses and the railways are the key means of transport for Hong Kong people and they take up 65% of the total passenger volume. If these companies take the initiative to reduce fees, they will certainly benefit many people.

We all know that the two railway corporations are public bodies wholly-owned by the Government and they should take the lead to reduce fees and tide over the difficulties together with the public. The two corporations have been noted for their financial stability and profitability, to the envy of investors around the world. Many Members have just said that the dividends paid by the two railway corporations to the Government out of their profits amount to more than a billion dollars. We still think that the Government can take this as a key factor for consideration when it asks the two corporations for a fee reduction. Whenever we ask the Government and the two corporations for a fee reduction, they will shift the responsibilities onto one another. On the one hand, the Government says that the two railway corporations have to service loans, on the other hand, the latter say that the Government asks for returns, as a result, no fees can be reduced. However, a credit ratings agency contacted by the Democratic Party in the past said that as the two railway corporations were government-owned, their ratings were mainly dependent on the financial capability of the Hong Kong Government. But Mr James TIEN just said that the credit ratings of all the major government subsidiaries in the world are dependent on the financial situation of these bodies themselves. However, I think the financial position of the Hong Kong Government is the most important and crucial factor in these credit ratings agencies' consideration. Therefore, if the Government and the two railway corporations keep shifting their responsibilities, I do not think they are being responsible.

In addition, if we look up section 12 of the Mass Transit Railway Corporation Ordinance and section 13 of the Kowloon-Canton Railway Corporation Ordinance, we will find that the Government acts as guarantor for the loans secured by the MTRC and KCR. It is also stated in these ordinances that any sum required for fulfilling a guarantee given by the Government shall be charged on and paid out of the General Revenue of Hong Kong. That being the case, why do the two railway corporations backed up by huge fiscal reserves use returns from loans and borrowing power as excuses for declining a fee reduction? If we do not ask for a fee reduction, we can definitely not influence the passenger volume. At present, the two franchised railways offer the public no choice and a fee reduction is only a special decision made under the existing economic circumstances, and it will not lead to drastic changes in the criteria for determining fees and passenger volume of the two corporations. In addition, if the Government allows the railway corporations to stop paying dividends or delay the payment, it can alleviate their so-called financial burden and they can really reduce fees to return wealth to the public.

Madam President, as regards franchised bus services, everyone knows that the Kowloon Motor Bus (KMB) has monopolized the bus services in Kowloon and the New Territories. Besides, the Long Win Bus started operating bus routes in North Lantau in 1997. Their total passenger volume accounts for 27% of that of all means of transport in Hong Kong and buses have the largest share of the public transport market. Before September 1997, KMB was still protected under the Profit Control Scheme and its permitted rate of return was 16% of the average net fixed assets value. Although there was no provision for profits control under the new franchise, the recorded half-yearly net profit of KMB in 1998 still reached $290 million. When the economic situation is fairly promising, even if these companies make profits and increase fees every year, the public may still stand this. However, in an economic recession, these companies continue to be indifferent to the hardships of the people albeit making great profits. To us, they are like a well-fed leopard facing a person, even though it is already full, it still gives the person a bite.

Madam President, to tide over the difficulties, the public utilities companies should discharge their social responsibilities. I must point out that all the public utilities companies mentioned today are making profits, and if they say that they have to cut staff salaries or even lay them off in the event of a fee reduction, they are just making an irresponsible excuse.

Madam President, I so submit.

PRESIDENT (in Cantonese): Mr Howard YOUNG.

MR HOWARD YOUNG (in Cantonese): Madam President, my speech will mainly focus on two to three points of Mr TIEN's amendment and comments made by other Honourable Members.

First of all, the crux of Mr TIEN's amendment is that fee reductions must not undermine the companies' sound financial management. Just now Mr TIEN has already explained the importance of this point which is actually connected with the issue of credit rating. In the position of either a citizen or a member of the service industry, like everybody else in the community, I do wish that the public utilities companies can reduce their fees. It will definitely be good news if fee reductions can be realized. Not only do the people have such a wish, small and medium enterprises, various industries such as catering, transport, wholesale and retail or tourism also have the same wish because the fees and charges of public utilities companies constitute part of their costs. Take the hotel industry as an example, the electricity tariffs they pay each day of the year are very high. It will indeed be glad tidings to the hotel and catering industries if they can cut costs in these areas.

However, on the other hand, if we ask these companies to reduce their fees by such a margin that would disable them from maintaining a sound financial position, a lot of undesirable consequences may arise. I remember that, a few years ago, I visited a Southeast Asian country and when I was waiting for the plane at the airport, there was a sudden blackout and power was not restored until 10 minutes later. I have also been to a certain city in the Mainland. Having checked into the hotel, I turned on the tap for some drinking water, but the hotel staff told me that the tap water there was not drinkable and I found the water flowed out from that hotel tap was actually yellow in colour. But theoretically, the water in Hong Kong can be drunk directly from the tap. In another instance, I was waiting at a bus stop in a medium-size city in western United States. I stood there for half an hour and saw not a single bus coming. If you compare the standards of public utilities in these places with those in Hong Kong, you will find that our services are good value for money and Hong Kong people should know how fortunate they really are. Therefore, I hope that the public utilities companies can, on the premise of not affecting efficiency enhancement, use other means, even by stop paying out dividends to their shareholders as suggested by certain Members earlier, to alleviate their burden and lower their costs so that they are able to reduce charges at the same time of enhancing their efficiency. If this can be achieved, the Liberal Party, as many small and medium enterprises as well as the public at large, will be very grateful.

Moreover, we cannot overlook the need for future investments of these companies. While we praise the present service standard of the Kowloon-Canton Railway and the Mass Transit Railway, we would find that they were actually still paying interests and were in debt over the past few years if we take a look at their accounts. In fact, the costs they have to bear are considerable. Interest is of course an important factor as the increase of every single percentage point in interest brings about a great impact; the expenditure on interest is in fact very high. In this connection, I agree with Mr TIEN that these companies have to pay attention to the issue of credit rating.

I agree to what the Honourable Andrew CHENG said just now. The credit rating of a public utility company is determined on basis of the strength of its biggest shareholder and the soundness of the company's financial position. Therefore, I think that the Government must be in a sound financial position and this is at least one thing which, I believe, the Liberal Party and the Democratic Party can see eye to eye. To crack a joke, we do not often an eye in each other ─ now at least we can reach a consensus on ensuring the sound financial position of the Government. I trust that both Parties will object to the Honourable LEE Cheuk-yan's comments a moment ago. He said that the Government was paid dividends in the past, now it should dig them out from its pockets. Go ahead, dig the money out! It may sound a good idea. But if the Government pays back all the dividends it received and its financial position becomes unhealthy as a result, what credit rating can we speak of then? So when we try to come up with all sorts of solutions, we must also be mindful of not spoiling a ship for a halfpenny worth of tar.

When the Honourable Fred LI explained just now why he could not support Mr TIEN's amendment, he said it was because he found that the sympathy for public sentiments had been omitted in the amendment. I think that this may be an excuse because when Honourable colleagues of the Liberal Party spoke, they have included both the people and the small and medium enterprises. If we have no sympathy for public sentiments, we will not support, hope and even encourage the public utilities companies to reduce their fees in the first place.

When Mr Gary CHENG moved the motion, he used the phrase "kick down the ladder" to depict the practices of many public utilities companies. Of course, I also think it is not right to kick down the ladder, but if the ladder is fractured, it is not even fit for climbing. Therefore, under such circumstances, Madam President, I support Mr James TIEN's amendment.

PRESIDENT (in Cantonese): Mr LAU Kong-wah.

MR LAU KONG-WAH (in Cantonese): Madam President, the Democratic Alliance for the Betterment of Hong Kong (DAB) has all along proposed that public utilities companies should be sympathetic to the public who is in financial straits at the moment and that they should reduce their fees in order to ride out the storm together with the people. Transport charges in particular must be adjusted downwards in a reasonable and practical manner.

The DAB conducted a survey on household income and expenditure this month with the objective of finding out the changes in personal and household expenditure in the past year during the economic downturn. The survey shows that, with regard to personal expenditure, the interviewees have greatly reduced their expenses on clothing and entertainment, whereas almost half of the interviewees said that their expenses on food and beverages had also been cut down. However, among all these slashes, the expenses on transport obviously had the smallest cut in terms of percentage points as compared with the other expenses mentioned above. The main reason is that, unlike other items, expenses on transport cannot be adjusted according to one's financial situation. If you live in the New Territories and have to go to work on Hong Kong Island, you need to take a train to save time and money. So transport expenses are not a flexible item you can spare. One has to spend a certain amount of money on transport anyway, it is not like clothing for which one can buy a designer brand piece of clothing if he has money, and buy a cheaper one or even refrain from buying anything at all if he is not that well off. Therefore, the DAB thinks that it is absolutely necessary for the public utilities companies, especially the transport operators, to reduce their fees. In a time when costs are constantly on the fall and wages vulnerable to cuts, why can the public utilities fees be exempted and have to be adjusted upwards instead of downwards?

Madam President, we suggest that the Government should actively encourage public utilities companies to reduce their fees because we know that these companies are hoarding fiscal surpluses and they should therefore consider tiding over the present temporary economic difficulties with the people at large. We are absolutely not coercing them into doing so, neither are we brutally fleecing them in order to alleviate the public's burden. However, while every company has its own definition of a "sound" financial position, factors leading to an "unsound" financial position abound. For example, a company may make mistakes in its investment strategy or suffer from mismanagement. If they have to keep their fees high due to such factors, is it reasonable to make the public bear the consequences of their "unsound" financial position with them? If employees' salaries are cut or they are even laid off, it would be a stark demonstration of the management's irresponsibility and indifference to employees' interests. Can these companies justify their refusal to reduce charges based on these grounds? My answer is no.

Therefore, the phrase "fee reductions that will not affect the companies' sound financial management" proposed to be added by Mr James TIEN in his amendment may be used as a pretext by the public utilities companies to refuse reducing their fees. In fact, fee reductions are not one-sidedly beneficial to passengers. Subsequent to the recent survey on household and personal expenditure, the DAB will shortly propose a number of concessionary measures in respect of transport to indirectly alleviate the public's burden while increasing the transport companies' patronage at the same time. This will be a win-win proposal.

Furthermore, will fee reductions really lead to an "unsound" financial position? I do have reservations on that. The management of some of the public utilities companies in Hong Kong have a very good head at figures indeed, and we could not fail to notice this by looking at the profits of the Kowloon-Canton Railway Corporation (KCRC), Mass Transit Railway Corporation (MTRC) and Kowloon Motor Bus (KMB). Undeniably, fee reductions will have an impact on their income to a certain extent, but will this be so grave as to make their financial position unsound? Under the present economic circumstances, I think these companies should not invariably project their profits for this year or the coming year using the same old methods of calculation. Just now Mr James TIEN turned down the idea of issuing bonds in Hong Kong when he talked about the operation of the KCRC. Mr LEE Cheuk-yan mentioned certain ordinances which seem to yield to the so-called commercial principles. However, at present, the Hong Kong Government is actually spending a large amount of its reserves on buying American bonds on a 5% interest return. On the other hand, the KCRC borrows money from the United States and is paying an interest of over 10%. Is it not stupid enough to pay for such an interest rate differential? Why are Hong Kong people so stupid? Why can we not issue bonds in Hong Kong? Therefore, it really pays for the public utilities companies to ponder how to broaden their sources of income and reduce expenditure in a prudent manner. Mr LEE Cheuk-yan mentioned commercial principles, and this is precisely a commercial principle.

Madam President, another reason for which I cannot support the amendment is that, among the messages conveyed by the whole amendment, there is one blatantly different from the proposals of the DAB. The amendment changes our original wording from "not to" to "make every effort to avoid". This does not seem to be an amendment but a change. What Mr James TIEN implies is, "You must make every effort to avoid and work hard on it!" So if this is really unavoidable, these companies may also resort to layoff or reducing the salaries of their employees on the grounds of fee reduction.

But please do not forget that the first part of the motion spells out the problems of "economic downturn", "high unemployment rate" and "heavy burden on people's livelihood" we are all facing. These are the reasons why the DAB urges the Government to actively encourage public utilities companies to reduce their fees in order to mitigate people's hardship, and to urge these companies not to lay off or reduce the salaries of their employees for the sake of fee reductions. However, while Mr TIEN's amendment retains the first part depicting the miseries of the people, the latter part is surprisingly incongruous with the preceding one. On the one hand it asks for a fee reduction, but on the other hand it hints that employees can be laid off and their salaries reduced because of the fee reduction. This is tantamount to saying that the outcome of asking for a fee reduction is giving up one's salary or even one's job! This is totally unacceptable to the wage earners.

With these remarks, I object to the amendment but support the original motion.

PRESIDENT (in Cantonese): Mr Eric LI.

MR ERIC LI (in Cantonese): Madam President, Honourable Members will easily understand what I mean when I say that parents must do their best to work for the long-term prospects of their children, so as to ensure that they can grow up and develop their potentials in a good environment.

Similarly, under a different situation I can also say that some public utilities, especially those wholly owned by the Government and been set up through legislation by this Council, are to a certain extent, established by us. So, if I say that we have to regulate them through legislation, I think Honourable Members can easily understand. And, if I say that the legislative intent and the spirit behind the establishment of these companies have obviously taken account of their overall long-term interests, I think Members will also find this easily understandable.

However, if I go on to say that these companies should be allowed to operate according to commercial principles, raise funds through the commercial market mechanism, or even utilize non-government financial resources to invest in the future of Hong Kong, then I am afraid that this principle will be easily ignored under the prevailing political climate.

The motion moved by Mr Gary CHENG gives me the impression that he has neglected the principles of commercial operation because of his failure to resist the temptation of short-term political expediency. The motion may even give others the impression that it is running counter to the principles of commercial operation, for Mr CHENG is asking these companies to reduce their charges without cutting back on their expenditure. We can look at the two railway corporations, for example. Their expenditure is mainly incurred by paying loan interests and staff salaries. So, if they are not allowed to do anything about these two items, we are actually asking these corporations to "broaden" the source of their expenditure and "cut back" on their income. Though the two railway corporations have been able to earn some profits in the past two years, these profits are by no means big when viewed against their huge investments. Moreover, it seems that Members have already forgotten the medium-to-long-term forecasts and financial estimates which these corporations submitted to us for scrutiny; in fact we still have a lot of such information at hand. It seems that Members have also forgotten that the KCRC once submitted its medium-to-long-term financial estimates to us when it first planned to construct the West Rail. I believe that the MTRC will soon be doing the same in respect of the Tseung Kwan O extension project. Large companies like the two railway corporations always need to prepare medium-to-long-term financial plans and these plans should not be drastically altered simply because of some short-term factors. If these corporations are required to alter their medium-to-long-term financial estimates in order to meet the short-term demands of the public, their financial plans will be subjected to huge impact. Worse still, it is very likely that in the near future (I am not talking about this year) deficits will appear in the budgets of corporations such as the KCRC.

The original motion will give rise to three problems: first of all, since the medium-to-long-term financial plans of these corporations may be disrupted, people may form an impression that since the management of these corporations is subjected to political interferences, they would not be able to make proper plans. One consequence is the difficulty in obtaining loans which Members have talked about. The financial turmoil has not only dealt a blow to the public, but also a heavy blow to big corporations. In fact, credit rating institutions have not only lowered the credit rating of the Hong Kong Government, but they have also lowered the credit rating of public utilities companies. So, even if nothing new happens, the costs borne by public utilities companies in terms of loan interests have already gone up drastically. If the Government asks the public utilities companies to reduce their fees and charges, thus making them unable to broaden their sources of income and cut back on their expenditure, then we are in fact sending out another negative message to credit rating institutions. Such a message will certainly deal a blow to their financing ability and affect their credit ratings, and their interest costs in the future will also be further increased.

I wish in particular to talk about the two railway corporations which are both established through legislation by this Council. The Honourable NG Leung-sing has pointed out that the law has provided that the public utilities companies have to operate according to commercial principles, but he has failed to mention something else. Let me add that some laws such as section 6 of the Kowloon-Canton Railway Corporation Ordinance may well lead to the following consequence. If the Government really accepts the original motion and force the public utilities companies to operate against commercial principles, the Government may have to use public money to make up for their losses in profits. Of course, I do not wish to see the Government being held responsible for this legal liability. But if we go against the original legislative intent, and if we neglect our responsibility of safeguarding the assets of the public utilities companies, which are in fact our common assets, our savings, just because we want to fulfil the short-term aspirations of the public, then we will fail in our duty as legislators, because to safeguard these assets is part of our duty.

The two problems mentioned above seem to have digressed from the original motion. In fact, if the motion of Mr Gary CHENG is carried, then a third problem may arise: While the Government has to subsidize the public utilities companies following their fees reductions, these companies will also encounter more difficulties in financing, and their interests costs will thus go up. In this eventuality, then the Government will have to "inject more funds", and even issue bonds as suggested by a lot of people, in order to solve the problem. But, in fact, it may not be as easy as what these people think, because before bonds can be issued, the companies involved have to be rated in terms of credit standing, and the bonds have to be "underwritten" by someone in the market. Interest rates are determined with reference to such credit ratings. There may be a need for the Government to subsidize the interests payable or to reduce the dividends collectable, or even to subsidize the fee reduction. All this will mean increased interest costs, dealing a double blow to the public utilities companies. In other words, they will suffer double losses.

It is not that I am not concerned about the public, or that I do not want to help the public, but I am sure that there must be some better ways. I think it would be more benefical to members of the public even if this sum of money is used as direct subsidies. Any method will be better than a fee reduction because the Government would suffer double losses as a result.

To put it simply, if Mr Gary CHENG or other Members really want to protect the interests of the staff of public utilities, they should urge these companies not to reduce their fees. In fact, fees reduction and wages reduction are two sides of a coin, and under the principles of commercial operation, we cannot have the best of both worlds.

I hope Members would bear this in mind when they vote on the motion.

Thank you.

PRESIDENT (in Cantonese): Mrs Selina CHOW.

MRS SELINA CHOW (in Cantonese): Madam President, at this very time of economic downturn, when our unemployment rate remains persistently high and the people face immense difficulties in earning a living, it is obviously far from being enough for public utilities companies to freeze their fees and charges for just one year. So, if public utility companies can reduce their fees and charges still further, the Liberal Party will naturally welcome such a move ─ on the condition that their sound financial management and quality of services must not be affected. Any further reductions will unquestionably pose a challenge to utilities companies, but on the basis of their brilliant track records, I believe that they will certainly be able to satisfy the expectations of the public.

As rightly pointed out by Mr James TIEN, we must be mindful of the financial pressure which fees reductions may exert on the internal finances of the two railway corporations, and we must make sure that credit ratings will not be adversely affected. If not, the two railway corporations may well be forced to shoulder increased loan interests and rising operating costs. The credit ratings of the two railway corporations have already been downgraded in the wake of the financial turmoil, and if they still do not handle their finances with redoubled care, then it is always possible that their credit ratings may well be further downgraded. Other public transport operators which also need to borrow money may also face a similar problem, though the size of their loans may be smaller.

Furthermore, as a market economy, Hong Kong has to rely on investor confidence to sustain its economic growth. So, it will be pure wishful thinking to assume that investors can be persuaded not to make any profit. Having said that, I must also say that since public utilities companies have always been able to enjoy stable profits and run fewer risks than ordinary businesses, it is indeed not too unreasonable for us to ask them not to make such great profits at a very time of difficulties.

Moreover, we should also note that the fees charged by public utilities companies do really impose quite a heavy burden on small and medium enterprises (SMEs). Let us take a look at electricity charges. Non-domestic users account for 70% of the total income of the Hongkong Electric Company Limited (HKE), but they represent only about one sixth of the total number of users. In other words, a good part of the income earned by the HKE is derived from industrial and commercial users. This is even more so with the China Light and Power Company Limited (CLP). Of all its users, only one seventh are industrial and commercial users, but these customers account for 75% of the CLP's income. We can thus see that the burden of electricity charges is largely borne by commerce and industry operators.

We all know that the SMEs make up more than 90% of the total number of enterprises in Hong Kong. Therefore, if public utilities companies can achieve the goal of fees reduction by broadening their sources of income and cutting down their expenditure, then they will not only lighten the burden of hard-pressed SMEs, but will also stimulate investment desires, thus contributing to our economic recovery.

The Liberal Party fully supports the suggestion that public utilities companies should be urged to avoid salary cuts and staff dismissals, because such measures would not only affect the livelihood of "wage earners", but will adversely affect the quality of their services. At present, despite their expansion and attempts to improve their services, some public transport operators have indicated that they are not going to cut the number of their staff, and individual companies have even indicated that they would employ more people. The Liberal Party supports and encourages such moves.

As these public transport operators have pledged that they will not cut the number of their staff or may even employ more staff, they may well have less room for manoeuvre in respect of fees reductions. But anyway, we still encourage these companies to do their best. We hope that they can be more sympathetic with members of the public, and we also hope that they can control their operating costs, identify ways of broadening their sources of income and cutting down their expenditure and reduce their fees and charges without impairing their financial stability. However, we must also strictly abide by two principles: First of all, the principle of no government subsidy for public transportation should be maintained; and second, public transport companies should always maintain adequate resources to sustain their development and service improvements.

PRESIDENT (in Cantonese): Mr Edward HO.

MR EDWARD HO (in Cantonese): Madam President, there seems to be two main points in the motion today, that is, a fee reduction by public utilities companies and whether employees will be laid off or have their salaries reduced. We have to differentiate between the two first as public utilities companies providing energy and transport services are different. The former do not have competitors and they are virtually monopolistic operations. As for the latter, there are other public means of transport in the market for selection by the public and fares are controlled by the market mechanism, therefore, I do not think the two should be placed on a par.

Some Honourable colleagues including Mr Fred LI has just referred to such organizations like the two railway corporations as monopolies but I think that it is not correct. First, I wish to declare an interest, that I am a member of the board of directors of the Mass Transit Railway Corporation (MTRC). Mrs Selina CHOW has just discussed about her views on energy bodies and I would like to talk about public transport bodies. I do not think anyone will oppose that we should encourage public utilities companies including the two railways to reduce fees but we should only encourage but not force them to do so. I am very glad that only the wordings "actively encourage" are used in Mr Gary CHENG's motion and Mr CHENG has not suggested forcing public utilities companies to comply.

A basic principle upheld in Hong Kong which the Democratic Alliance for the Betterment of Hong Kong (DAB) agrees to is that we have a free market in which the prices of goods and services are determined by market forces. In fact, we find that commercially-operated public utilities companies have somewhat changed along with the recent economic circumstances. The consumption power of people has weakened and many of them have chosen to take cheaper means of transport. The drop in patronage of the MTR is a good example. By legislation, the two railway corporations should operate according to prudent commercial principles. From a commercial perspective, if the MTRC increases fees, it will certainly cripple its competitiveness under the existing circumstances as passengers can take other means of transport, and as a result, its income will definitely drop. Therefore, this year the MTRC has decided to freeze fees for a year. The MTRC should act like other business bodies and actively consider how costs can be reduced to maintain reasonable returns without affecting its service standard and passenger safety. As the two railway corporations receive huge investments from the Government and they are wholly owned by the Government, they are the public's property. If they are well-managed and make reasonable returns, Hong Kong people will naturally be benefited. Nevertheless, if their returns are too low or if they even suffer losses, taxpayers will have to subsidize them and they will become a social burden, influencing other social services in turn.

Mr LEE Cheuk-yan has rightly said that the core of the problem lies in whether these bodies should continue to operate according to commercial principles. The former Legislative Council had debated over this point and we had discussed about the possible consequences if the two railways refrained from operating according to commercial principles. Many other railway companies in the world perform very poorly after they have stopped pursuing commercial principles, thus entailing subsidization by the Government, in other words, the people.

Madam President, I would like to discuss about public or private bodies. Firstly, these large-scale infrastructure companies certainly require investments and there must be reasonable returns for such investments. Returns are made in the form of profits and profit-making is therefore reasonable. When Mr TAM Yiu-chung mentioned the two railways, he talked about the great profits they made last year and the year before. I hope that Mr TAM will not forget that investments should have returns, and if there are no returns, it means that the Government has given subsidies. Under the current circumstances, the patronage of the MTR has already dropped and if we ask it to reduce its fares, the MTRC should consider whether the passenger volume will increase after a fee reduction, whether there will be a further reduction in its income or whether it will become financially unsound after the fee reduction as this will affect its services. I believe that these are important factors for its consideration.

Finally, when non-franchised public bodies consider how prices should be determined, they must set prices at levels affordable to their clients while allowing them to provide reasonable services and get reasonable returns. Among other things, these bodies surely have to try their best to reduce costs under the present circumstances. I find Mr James TIEN's amendment fairly moderate as his amendment contains the expression "to make every effort to avoid". In other words, the companies should only turn to these extreme measures when they have no other methods to increase their efficiency. Therefore, I think that his amendment merits support. Thank you.

PRESIDENT (in Cantonese): Mr Jasper TSANG.

MR JASPER TSANG (in Cantonese): Madam President, Mr Eric LI has just compared public utilities companies to our children. As parents, we all wish that our children will grow up healthily. This is certainly right but most people who know how to be parents also hope that when their families are financially tight and the overall economic situation is unpromising, their children will not be spendthrifts and will even take up work after school to help make ends meet.

Many Honourable colleagues have referred to commercial principles. For our society, this is not a strange term. What are commercial principles? We need only walk around a shopping mall to find prices cut everywhere; consumers can get 50% discount or even more. In some restaurants, patrons can have a fish or a chicken for $1, and they can eat as they like for dozens of dollars. Do those who run these restaurants not wish to abide by the commercial principles? Have they given up the commercial principles? Do they not know how to do business? Does it mean that all these restaurants, fashion shops and retailers have forgotten the commercial principles and casually cut prices out of a sudden? Have they dismissed their employees? Have all these bosses reduced the salaries of their staff? Where have they put their commercial principles? On the contrary, they are sticking to the commercial principles as they know it only too well that they have to remain in business, keep their customers and employees, and that they cannot take irresponsible actions under these circumstances? Can they refrain from cutting prices?

The Democratic Alliance for the Betterment of Hong Kong discovers from an opinion poll last week that Hong Kong people lived frugally last year and economized on personal and family expenses, and their expenses on clothing, having tea at restaurants, shopping, movies, and even consumables such as electrical appliances and household articles, as well as the number of times people took taxis reduced by 10% to 50%. Only the expenses on necessities such as transport, water, electricity and gas could not be reduced. People can refrain from taking taxis when they are not in a hurry but how can ordinary working people refrain from taking public means of transport? As these public utilities companies have not reduced their fees, the expenses on transport and energy still take up a very large share of the expenses of ordinary households and even small and medium enterprises. Why has this share grown recently? It is because people can save and economize on other things but not these essential expenses. For this reason, public utilities companies do not need to reduce fees. They observe a separate set of commercial principles, not needing to worry about patronage or a possible cut in clientele and turnovers if they do not reduce prices amid the current economic downturn. They do not have such worries for we safeguard their turnovers. What should we take such commercial principles to mean?

Mr Eric LI has just said that we seem to be striking a blow at and interfering with the medium-to-long-term financial plans of these organizations for short-term political expedience. However, things do not always turn out as we wish. In particular, the Government of the Hong Kong Special Administrative Region told us in February this year that there would be a surplus this fiscal year. But today, no one knows how big the deficit we will have to face. Who or which family has not wrongly projected? We learn from the newspapers and the radio every day that all those who have bought properties are complaining. They thought that they could afford to repay their mortgage loans but they have now turned into owners in great pains, at a loss how their debts can be cleared. Who have not wrongly projected?

For people who make forward plans, we certainly hope that they can carry out their plans but the whole community is now focusing on how we can tide over difficulties together. We hope that the short-term expedience Mr Eric LI referred to is really "short-term" and we also hope that this difficult time is "short", and that we can tide over the "short-term" difficulties and withstand the economic pressure together. We do not wish to see the general public bearing heavier burdens as some of their expenses cannot be reduced under some special circumstances or since some particular organizations are not restricted by the said commercial principles.

Madam President, the major difference between the original motion and Mr James TIEN's amendment lies in what we consider the most important. Given the present circumstances, we do not think that the motion is compelling. It is impossible for us to ask a tiger for its skin or compel public utilities companies to run the risk of being caught in a crisis and reduce fees regardless of their financial situation while protecting the interests of their staff and workers at the same time. It is certainly impossible for this to be done as this is precisely asking a tiger for its skin! Is this the case? No. We are moving this motion to urge these public utilities companies to consider the difficulties faced by the entire community. We are asking them to reduce fees and safeguard the interests of their staff and workers. If we add certain principles or conditions, we will only give public utilities companies an excuse for not reducing fees. Therefore, I ask Honourable colleagues to support the original motion and not to allow the amendment to bear upon the original intent of the motion itself.

PRESIDENT (in Cantonese): I now invite Mr Gary CHENG to speak on Mr James TIEN's amendment. Mr Gary CHENG, you have up to five minutes to speak.

MR GARY CHENG (in Cantonese): Thank you, Madam President. I have been listening to speeches by many colleagues in this Council and paid particular attention to the speech of Mr James TIEN and his rationale. I am glad that the Honourable Edward HO said he agreed that we should actively encourage the Government to do what was suggested. Unfortunately, Mr James TIEN's amendment seeks to delete the words "actively encourage". I am glad that Mr Edward HO said we should not "force" the Government to do what was suggested and we did not say "force" either. As far as I can remember, it appears it was Mr Eric LI who mentioned anything about force.

In fact, Mr James TIEN needs not amend our motion at all. Comparing the original motion and the amendment, we said "not to lay off or reduce the salaries of their employees because of the fee reduction" while Mr James TIEN said "to make every effort to avoid". I do not think there is a big difference there. We said "actively encourage", "understand the public's sentiments", but he thought this was something rather difficult to do and therefore suggested deleting both "actively encourage" and "understand the public's sentiments". Nevertheless, at least he said the public utilities companies should hold discussions with the Government. A key difference lies in the very ambiguious phrase about the circumstance that does "not affect the companies' sound financial management" that Mr James TIEN added. Some colleagues asked: What is "sound financial management"? "Sound financial management" is also something I would like to achieve. They said a sharp decrease in returns may push profits down to below a reasonable level. But what is "reasonable"? Compared to many enterprises and companies on the brink of bankruptcy and faced with huge losses, what is a reasonable level of profit for these public utilities companies?

Mr James TIEN also quoted some data from some companies. For example, with a revenue of $3.1 billion, the Kowloon Canton Railway Corporation has a $900 million surplus. Is this "reasonable"? We need to think about issues like this when we vote later.

In the foregoing discussions, one of our targets for investigation is undoubtedly the public utilities, but let us not forget that a major objective of our motion is to urge the Government to do something, in addition to discussing the conduct of the public utilities companies. We do not want the Government to sit back, rather we want it to do something when these companies are operating according to commercial principles and Hong Kong people have no choice but to use their services. We just want to "urge" not "force" the Government to do something. So I hope as we vote everyone can tell the difference between Mr James TIEN's amendment and our original motion. I very much hope Mr James TIEN and colleagues from the Liberal Party can support our original motion if their amendment is negatived, because we do share a lot of common grounds. I do not want to see, during today's debate, some unanimous aspirations among us (such as the call for public utilities to reduce fees) are negatived. Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Transport.

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, part of the Honourable Gary CHENG's motion relates to organizations providing public transport services. Mr CHENG urges the Government to actively encourage the public utilities companies to reduce their fees, but not to lay off or reduce the salaries of their employees because of the fee reduction. Under the present economic conditions, the general public and people from all trades are faced with considerable pressures. It is understandable that the people should want to reduce the burden on their daily expenditure. The Government is fully aware of the difficulties faced by the people and would very much want to ease the burden on the public as far as is practicable. During this difficult period, public transport operators have taken the initiative to freeze their fares with a view to easing the pressure on the public. They include the Mass Transit Railway Corporation (MTRC), the Kowloon-Canton Railway Corporation (KCRC), the Light Rail Transit, franchised buses, the ferry companies, the Hongkong Tramways Limited, and the Peak Tramways Company Limited. In spite of their own situation in face of the difficult economic environment during the year, with individual public transport operators having forcast even losses in their operations, these organizations still took the initiative to freeze their fares. It fully reflects their sense of social commitment and their sincerity to tide over the difficulties with the people.

Faced with a reduction in patronage and no change in fares, public transport companies will surely experience a drop in revenue. Therefore, major public transport companies naturally need to exercise fiscal prudence. In face of this difficult period of adjustment, they may still optimize on their resources and enhance productivity without laying off their employees or cutting their services, so as to minimize the effect of a freeze on prices on their financial position. We would surely rejoice if individual companies can be financially capable of reducing their fares to benefit the consumers further, without undermining staff welfare, service quality and safety. But I must remind Honourable Members that there is no profit control for public transport companies which have to operate according to commercial principles. It is these principles that dictate whether these companies may be financially capable of reducing fares as requested by Honourable Members.

In fact, there are few options for public transport companies to minimize their expenditure. The present operating conditions, which are being adversely affected by the economic downturn, limits the room for these companies to increase their revenue. One single major cost for public transport companies is staff salaries and welfare. Maintenance costs and expenditure on service improvement come next. In the 1997-98 financial year, despite the economic slump there was an upward trend in other cost expenditures (such as salaries and maintenance), except fuel and petrol. Among them interest on loans recorded the highest increase. Despite the economic slump and the fare freeze, major public transport companies did take good care of their staff by giving them an appropriate salary adjustment in 1998. With the present economic situation, the implementation of a fare reduction will inevitably affect staff salary and welfare. At present, there are about 33 000 people in Hong Kong directly engaged in the provision of public transport services. The last thing that we would wish to see are pay or welfare cuts triggered off by pressures for a fare reduction, or dismissals arising from corporate downsizing.

Another possible consequence of a fare reduction is that the quality of public transport service may be adversely affected. With their decision to freeze fares, public transport operators are already obligated to reschedule or delay their investment plans for service improvement. If fares have to be further reduced, they will probably have to cancel some service improvement programmes or even lower the existing standard of service or reduce maintenance costs to suppress the emergence of an imbalance between income and expenditure. In addition, the MTRC and the KCRC will soon launch projects on the Tseung Kwan O extension and Phase I of the West Rail respectively. They need to secure finance in the money market for these projects. The KCRC is actively planning the Ma On Shan rail link, the Tsim Sha Tsui extension and the Sheung Shui to Lok Ma Chau spur line. Reducing fare prices will have a direct impact on the ability of the two railway corporations to borrow and repay loans, possibly causing delay to the new railway programmes.

Therefore, if Members request public transport companies to reduce fares without affecting staff welfare, a probable result is that the quality of service may suffer and the financial position of the entire public transport sector would become unstable or even deteriorate. Fee reduction in the short term may result in a delay in the future implementation of service improvement programmes or development of the transportation network.

In view of the above factors, I think that under the present economic conditions, it is of utmost importance that public transport companies can discharge their duties properly, be prudent, and keep jobs for their employees in preparation for an economic revival. In fact, it is competition in the market that is conducive to maintaining a stable and reasonable fare pricing. With competition, public transport companies will find ways to enhance productivity or even lower their fares to keep their patrons and revenue. The 30% discount and other benefits provided by the Airport Railway, concessions provided by the Route 3 (Country Park Section) and those by the Western Harbour Crossing for certain types of vehicles are all commercial decisions made in response to market competition. Recently, the Government called for public tender in the form of licences for ferry services to outlying islands, previously operated under franchise by the Hongkong and Yaumati Ferry Company Limited, in order to introduce competition, raise service quality and keep fare prices at a reasonable level. The Government will continue to monitor the operation of public transport companies. In particular it will seek to maintain an environment in which there is healthy competition so that public transport services may live up to the expectations of the people and may be maintained at a level acceptable to the people.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, the motion and the speeches of Members were about fees charged by public utilities companies being energy suppliers, and these include suppliers of electricity, coal gas, liquefied petroleum gas and petrol. I shall speak about these items. To begin with, I would like to thank Members for their comments on these matters.

As far as the supply of coal gas is concerned, the Hong Kong and China Gas Company Limited (Towngas) announced in the middle of last month it would not raise gas tariff and monthly maintenance charge on 1 January 1999 to help relieve the financial burden on the people. Although gas tariff is not subject to the supervision of the Government, it made the initiative to freeze the tariff and undertook that safety or service quality would not be affected; nor will the freeze cause any lay-offs. This is applaudable.

As regards the power companies, the Secretary for Economic Services has on different occasions publicly urged the China Light and Power Company Limited and the Hongkong Electric Company Limited to consider a moratorium or a reduction on their charges. In principle, the two power companies may adjust their charges according to the rate provided in the scheme of control agreement, but we believe the two companies will seriously consider a moratorium in the light of the present economic situation. In fact, at the meeting of the Panel on Economic Services held on 26 last month, the two companies indicated that they would consider whether or not to adjust electricity charges in the coming year.

Moreover, the two power companies are conducting an interim review together with the Government on the scheme of control agreement and have agreed to certain proposed amendments. For instance, if the newly installed generator units led to excess generating capacity, part of the cost for machinery and equipment will be deducted from the fixed assets in the calculation for the return on investment by shareholders. In the long term, these changes will reduce the cost of supply of electricity that consumers have to bear and the pressure on an increase of charges. The relevant details were discussed on 26 of last month and the meeting of the Panel on Economic Services held yesterday.

As regards the oil companies, oil prices are not regulated by the Government but the Economic Services Bureau has urged the oil companies to consider lowering the prices of their products in the light of the downward adjustment of oil prices worldwide. We note, recently, that oil companies are launching new campaigns to benefit their customers by cash coupons or discounts so that the prices of petroleum products are indirectly reduced. Furthermore, the Panel on Economic Services have decided to discuss at the meeting to be held on 23 this month the retail prices of major fuels sold by the relevant oil companies. On that day, representatives of the oil companies will be present to answer any questions raised by Members.

The Economic Services Bureau is very much concerned about charges for energy supply and has urged the relevant organizations to give due consideration to a moratorium on or reduction of their charges in order to tide over the hardship of an economic downturn together with the public. We do not think there is any need to achieve a moratorium on or reduction of charges through layoffs or cuts in staff salaries, or through lowering the service quality or safety standards in particular. The ultimate decision rests with the relevant organizations, of course. However, we are glad that these organizations are making positive responses and launching corresponding measures.

Thank you, Madam President.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the amendment moved by Mr James TIEN be made to Mr Gary CHENG's motion. Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Mr Gray CHENG rose to claim a division.

PRESIDENT (in Cantonese): Mr Gary CHENG has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please register their presence by pressing the top button and then proceed to vote.

PRESIDENT (in Cantonese): Before I declare that voting shall stop, are there any queries? If not, the result will now be displayed.

Functional Constituencies:

Mr Kenneth TING, Mr James TIEN, Mr Edward HO, Dr Raymond HO, Mr Eric LI, Mrs Selina CHOW, Mr Ronald ARCULLI, Mr Ambrose CHEUNG, Mr HUI Cheung-ching, DR LEONG Che-hung, Mrs Sophie LEUNG, Mr Howard YOUNG, Mr LAU Wong-fat and Dr TANG Siu-tong voted for the amendment.

Mr Michael HO, Mr LEE Kai-ming, Mr CHEUNG Man-kwong, Mr CHAN Kwok-keung, Mr CHAN Wing-chan, Mr SIN Chung-kai, Mr WONG Yung-kan and Mr LAW Chi-kwong voted against the amendment.

Geographical Constituencies and Election Committee:

Miss Christine LOH, Mr Andrew WONG, Mr David CHU, Mr NG Leung-sing, Prof NG Ching-fai, Mr MA Fung-kwok, Mr Ambrose LAU and Miss CHOY So-yuk voted for the amendment.

Miss Cyd HO, Mr Albert HO, Mr LEE Wing-tat, Mr LEE Cheuk-yan, Mr Martin LEE, Mr Fred LI, Mr James TO, Miss CHAN Yuen-han, Mr LEUNG Yiu-chung, Mr Gary CHENG, Mr Jasper TSANG, Dr YEUNG Sum, Mr LAU Kong-wah, Miss Emily LAU, Mr Andrew CHENG, Mr SZETO Wah, Mr TAM Yiu-chung, Mr CHAN Kam-lam and Mr YEUNG Yiu-chung voted against the amendment.

THE PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 22 were present, 14 were in favour of the amendment and eight against it; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 28 were present, eight were in favour of the amendment and 19 against it. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): Mr Gary CHENG, you may now reply and you have up to four minutes 52 seconds out of your original 15 minutes.

MR GARY CHENG (in Cantonese): Thank you, Madam President. I have to thank also the large number of colleagues who have discussed seriously and supported our motion.

In the response by the public officers a moment ago, some questions caused me worries as I listened along. An official said he was worried that if public utilities reduced their fees, the quality of service would be affected. But we are well aware of the Enhanced Productivity Programme proposed by the Government which is confident that there will be no deterioration in the level of service. Why is the Government not confident in the public utilities it fully owns? This is indeed worrying. As we pointed out before the officials responded, they would use the premise of commercial principles to refute our points. Not surprisingly enough, they did. In fact, my motion today actively encourages the public utilities to reduce their fees and urge them not to lay off or reduce the salaries of their employees because of the fee reduction. Such urges can find precedents among officials but regrettably it does not apply to the entire Administration.

The Secretary for Economic Services, Mr Stephen IP, urged Hongkong Telecom (HKT) not to increase their tariffs. The Financial Secretary, Mr Donald TSANG, demanded that HKT treat their staff as humans. I hope officials at other bureaux may model on these two officers and this is also what the motion is intended to achieve. So, if Mr James TIEN's amendment is negatived at the voting later, I hope colleagues from the Liberal Party can consider the contents of the original motion. There are a number of grounds on which we agree in principle. I hope Members can think the matter over again and support the original motion. Thank you, Madam President.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr Gary CHENG, as set out on the Agenda, be passed.

PRESIDENT (in Cantonese): Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Mr James TIEN rose to claim a division.

PRESIDENT (in Cantonese): Mr James TIEN has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please register their presence by pressing the top button and then proceed to vote.

CHAIRMAN (in Cantonese): Before I declare that voting shall stop, Members may wish to check their votes. If there are no quries, the result will now be displayed.

Functional Constituencies:

Mr Michael HO, Mr LEE Kai-ming, Mr CHEUNG Man-kwong, Mr Ambrose CHEUNG, Mr HUI Cheung-ching, Mr CHAN Kwok-keung, Mr CHAN Wing-chan, Mr SIN Chung-kai, Mr WONG Yung-kan, Mr LAW Chi-kwong and Dr TANG Siu-tong voted for the motion.

Mr Kenneth TING, Mr James TIEN, Mr Edward HO, Dr Raymond HO, Mr Eric LI, Mrs Selina CHOW, Mr Ronald ARCULLI, Dr LEONG Che-hung, Mrs Sophie LEUNG, Mr Howard YOUNG and Mr LAU Wong-fat voted against the motion.

Geographical Constituencies and Election Committee:

Miss Cyd HO, Mr Albert HO, Mr LEE Wing-tat, Mr LEE Cheuk-yan, Mr Martin LEE, Mr Fred LI, Mr James TO, Miss CHAN Yuen-han, Mr LEUNG Yiu-chung, Mr Gary CHENG, Mr Jasper TSANG, Dr YEUNG Sum, Mr LAU Kong-wah, Miss Emily LAU, Mr Andrew CHENG, Mr SZETO Wah, Mr TAM Yiu-chung, Mr David CHU, Mr CHAN Kam-lam, Mr YEUNG Yiu-chung, Mr Ambrose LAU and Miss CHOY So-yuk voted for the motion.

Mr Andrew WONG voted against the motion.

Miss Christine LOH, Mr NG Leung-sing, Prof NG Ching-fai and Mr MA Fung-kwok abstained.

The PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 22 were present, 11 were in favour of the motion and 11 against it; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 28 were present, 22 were in favour of the motion, one against it and four abstained. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the motion was negatived.

PRESIDENT (in Cantonese): Second motion: Developing Hong Kong's tourism industry. Mr David CHU.

DEVELOPING HONG KONG'S TOURISM INDUSTRY

MR DAVID CHU (in Cantonese): Madam President, I move that my motion as printed on the Agenda be passed.

We all know very clearly that the tourism industry is very important to Hong Kong, and, for this reason, all the people of Hong Kong are obligated to support its development, so as to enable visitors to have a feeling of "a home away from home" while they are here. That said, we must realize that our tourism industry has already undergone some fundamental changes in terms of its competitive edge: in the 1950s and 1960s, foreign tourists were attracted to Hong Kong by our inexpensive goods and made-to-measure suits which could be ready within 24 hours; in the 1970s and 1980s, as a result of the policy of reform and opening in China, large numbers of foreign tourists flocked to China and many of them stopped over in Hong Kong enroute. Today, however, these advantages which we used to enjoy are all gone, and Hong Kong has so far failed to offer any new attractions. So, at a time when our tourism industry is faced with all kinds of new challenges in the 21st century, we must come up with some new selling-points; we must formulate innovative measures to revitalize the industry, so as to enhance its long-term competitiveness.

The importance of the tourism industry to Hong Kong

As we all know, the tourism industry has all along been one of our major earners of foreign exchange. The following statistics can aptly highlight the importance of this industry to Hong Kong:

Every year, more than 10 million tourists come to Hong Kong.

Despite its small size, Hong Kong has a 4.5% share in the global tourism market. This is indeed a very considerable proportion, something which can testify the success of our tourism industry.

In 1996, the local tourism industry earned for us a total of $87 billion worth of foreign exchange, and this represents roughly 8% of our Gross Domestic Product. And, there are also other indirect benefits such as increased foreign investments in Hong Kong and more external trade for us.

Those employees engaged in tourism-related trades represent 12% of our total workforce. This means that the tourism industry is of immense significance to the overall employment market of Hong Kong.

Ways of revitalizing the tourism industry of Hong Kong

According to some estimations, in the next 10 years, the global market share of the tourism industry in the Asia-Pacific region will rise from 14% to 20%, and the total income thus generated by the year 2005 will go up to US$7,200 billion. For this reason, we must seek to revitalize our tourism industry as quickly as possible, so as to grab for ourselves a bigger share in the global tourism market. I have 10 recommendations as follows.

First, we should attract more visitors from the Mainland. Statistics show that tourists from the Mainland accounted for 22% of our total tourist volume in 1997, and their consumption per head stood at as much as $6,782. This shows clearly that the Mainland has become one of our biggest sources of tourists.

Second, we should educate our own people on the significance of the tourism industry. That way, we can win the co-operation of all Hong Kong citizens and the various trades and industries; and all visitors will thus have fond memories of Hong Kong as they feel that our city is their home away from home. The community as a whole must make concerted efforts to make our visitors feel that Hong Kong is really a city of friendliness.

Third, we should build more large-scale conventions and exhibitions venues. Statistics show that more than 25% of our visitors are here either on business or for participation in conferences. So, the construction of new and well-equipped conventions and exhibitions venues will certainly attract more visitors to Hong Kong for economic and commercial activities. And, I must say in this connection that the proposal made by the Chief Executive in his second policy address for the construction of a new, state-of-the-art performance venue on the West Kowloon Reclamation will certainly attract more visitors to Hong Kong.

Fourth, we should promptly appoint a person of enterprise to the post of Commissioner for Tourism. If no suitable candidates can be readily identified among existing civil servants, we may as well consider the employment of a capable person on contract terms. The Commissioner for Tourism should be given sole responsibility for promoting our tourism industry. But if we really want the Commissioner to achieve the best results, we must give him or her all the necessary powers and resources, so as to make sure that he or she can do all that is required to promote and revitalize our tourism industry. As for the duties of the Commissioner, he or she must be required, among other things, to communicate with local and international tourism professionals on a regular basis. The Commissioner must also put in place some effective strategies to give focused support to tourism-related businesses such as hotels and the passenger air service.

Fifth, we should capitalize on our existing strengths. In this connection, I very much support the move by the Hong Kong Tourist Association (HKTA) to set up a heritage group for the purpose of marketing tours on our heritage and historical relics. But I must add that our unique heritage and historical relics are not the only things which appeal to foreigners; we can actually offer many other scenic spots known for their blending of Occidental and Oriental tastes. That is why I wish to propose that we should focus on those tourist spots unique to Hong Kong and promote them vigorously, one example being the "Poor People's Night Clubs" in the past.

Sixth, we should render our full support to the work of the HKTA. For years, the HKTA has been doing a lot of work to promote the tourism industry of Hong Kong, and its contributions in this respect are enormous. Therefore, all of us should support its work vigorously. Furthermore, more resources should be allocated to the HKTA, so as to enable it to do a still better job in promoting our tourism industry.

Seventh, we should offer more concessions to our visitors, so as to attract them to Hong Kong. We should put in place some measures which can offer indirect concessions to our visitors in terms of accommodation and transportation, some examples being reductions in hotel and airport taxes. Besides, we may also learn from the experience of some foreign countries, where travel passes are sold specifically to tourists at concessionary prices as a means of facilitating their travel on the public transportation system. In the context of Hong Kong, we may, for example, offer Mass Transit Railway commemorative tickets to tourists at bargain prices.

Eighth, we should improve the cleanliness of our physical environment by, for example, implementing various measures to abate our pollution problem, conserve our natural environment and spread the message of the "Clean Hong Kong Campaign". Once Hong Kong becomes a clean city, it will increase tourists' liking for it and make them willing to come back again.

Ninth, we should build up more tourist spots. If we can do so, we will be able to increase the attractiveness of our city. One example is the construction of one or two theme parks. Theme parks are a great tourist attraction which can bring us considerable foreign exchange, create large numbers of jobs and even boost the demand for our hotel rooms. But it should be pointed out that theme parks will require huge investments and the construction of infrastructural and transport facilities as back-up. For this reason, I am of the view that while the Government should no doubt fight proactively for the establishment of theme parks in Hong Kong, it must not act too rashly, for fear that its good intention may achieve the opposite results.

Finally, the tenth recommendation. We should capitalize on the advantages offered by our excellent harbour. By this, I mean that we should construct a large-scale ocean-liner terminal as a way of attracting large ocean-liners to stop over in Hong Kong. That way, we will be able to induce their passengers to stay longer in Hong Kong. Besides, we should also consider the HKTA's earlier proposals on constructing a fishermen's pier and a film city in the Tsing Ma area.

With these remarks, Madam President, I beg to move.

Mr David CHU moved the following amendment:

"That this Council urges the Government to expeditiously implement the various measures for developing Hong Kong's tourism industry vigorously and appoint a Commissioner for Tourism, and to ensure that the Commissioner is given the appropriate authority and resources to co-ordinate the work of all the relevant government departments in facilitating tourism, so as to promote the development and enhance the long-term competitiveness of Hong Kong's tourism industry."

THE PRESIDENT'S DEPUTY, DR LEONG CHE-HUNG, took the Chair.

DEPUTY PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Hon David CHU, as set out on the Agenda, be passed."

DEPUTY PRESIDENT (in Cantonese): Members have been informed by circular on 6 November that Mr Howard YOUNG has given notice to move an amendment to this motion. His amendment has been printed on the Agenda. In accordance with the Rules of Procedure, the motion and the amendment will now be debated together in a joint debate.

I now call upon Mr Howard YOUNG to speak and to move his amendment. After I have proposed the question on the amendment, Members may then speak on the motion and the amendment.

MR HOWARD YOUNG (in Cantonese): Mr Deputy, I move that Mr David CHU's motion be amended, as set out on the Agenda.

The debate today is similar to the motion debate I moved in December last year. Both of them are about developing the tourism industry. I wish to point out how Hong Kong can better promote its tourism industry and I hope that the Government will make reference to the valuable views expressed by Honourable Members then.

The tourism industry not only brings Hong Kong generous foreign exchange earnings but also creates a lot of job opportunities. More than 10% of the workforce in Hong Kong are engaged in businesses related to the tourism industry and there are many unexpected occupations. I met a new friend the evening before. He knows that I am Mr YOUNG, the representative of the tourism industry in the Legislative Council and he hopes that Members will propose methods to help the Government promote the tourism industry at their debate in the Council today. What is he? He is not employed by a hotel, an airline or a travel agency. Nor does he work in the retail or catering industry; he runs an import business. Why is he keyed up? It is because he is an importer of frozen meat, and if tourists do not come, he will not be able to sell the frozen meat to hotels and his business will be affected.

There is actually an imbalance in the tourism industry. At present, the tourism industry attaches more importance to shopping than sight-seeing. Foreign tourists spend most on shopping in Hong Kong, and shopping takes up 50% of their total expenditure while sight-seeing takes up 3% only. To enhance the economic performance of the tourism industry, we need additional scenic spots in Hong Kong to attract more tourists and provide more job opportunities to make the expenditure of tourists well balanced.

The advantages of Hong Kong for theme parks

I would like to talk about the advantages of constructing theme parks in Hong Kong. The construction of world-class theme parks in Hong Kong is beneficial to the tourism industry, investors and franchisees. If the construction of theme parks is done under the best terms, the three parties will all be winners. To secure the best terms, it does not mean that we have to beg investors or that we do not need to take the initiative to fight and promote the advantages of Hong Kong. Mr CHU had discussed with me before he drafted his motion. At that time, the theme of his motion was theme parks but its scope was later broadened and the original theme had disappeared. The amendment I moved today is not in conflict with the original motion; they are mutually supplementary and the amendment is intended to preserve the original hot topic.

The target clientele of the operators of theme parks in Southeast Asia are Hong Kong, Southeast Asia and Mainland China.

The superiority of Hong Kong over other Southeast Asian countries include geographical conditions, flying time and population. Hong Kong is situated at the heart of Asia. If we fly over Asia, within a brief flying time of five hours we can cover many places including major Chinese cities and other countries in the Asia-Pacific Region such as Japan, the Philippines, Indonesia, Singapore, Malaysia and India, where half of the world population live.

As contrasted with some cities in the Mainland, Hong Kong has the busiest international airport. Let us compare the weekly air lines to and from major cities. There are only 1 260 flights to Shanghai while there are 2 121 and 3 150 flights to Guangzhou and Beijing respectively every week on average, and most of them are domestic flights. As for Hong Kong, there are 3 332 flights every week and most of them are international flights. For this reason, I think that Hong Kong has better conditions than any city in the Mainland for attracting tourists from the important Southeast Asian market.

For mainland tourists, it goes without saying that Hong Kong is superior to all Southeast Asian cities outside China. Hong Kong is still the most popular destination for mainland tourists and around 2.6 million mainlanders visit Hong Kong every year while only 300 000 to 500 000 mainlanders visit places like the most popular Thailand.

In our fight for the construction of theme parks, the Liberal Party does not support offering preferential terms indiscriminately, and we do not think that Hong Kong need to offer such favourable terms as tax exemption or reduction as we have a relative simple tax regime and a low tax rate. How can the Government support and co-ordinate this? It can do so in four aspects.

1. Town planning: Under the premise of not damaging the natural ecology, the Government should relax planning restrictions as soon as possible and to make the greatest facilitation possible in terms of land grant or sale. I will even ask the Government to consider constructing theme parks within certain country parks.

2. Infrastructure: The Government should create a favourable environment, take coupling actions and make commitment in respect of road networks, transportation, water and electricity connection and drainage systems.

3. Relaxing immigration control: In addition to expeditiously simplifying and even exempting the entry visa formalities for tourists from new markets such as Russia, East Europe and the Middle East, the Government can make a commitment in principle that it will take measures to allow mainland residents to enter Hong Kong for visits in a simpler and more convenient way after theme parks have been constructed. Certainly, I am not pinpointing at theme parks only, for I am also referring to visits to large-scale activities or exhibitions. This way, we can give investors a message and let them gain confidence that we do not have less potential for attracting mainland tourists than any other mainland cities competing with us.

4. The Government's attitude: Apart from showing its sincerity, the Government should also try its best to support and take active steps. But it does not mean that the Government has to have partiality for businessmen. When the United States President or German Prime Minister visited China, they brought businessmen with them and actively fought for trading ties. If our Government supports local businessmen in looking for more opportunities and room for development, it will be helpful to our economy.

Theme parks ─ famous brand effect

Why do we stress that world-class theme parks should be constructed? It is because Hong Kong needs a famous theme park to achieve a famous brand effect. Although this is not a miraculous cure or the only way to save the tourism industry, so long as these facilities have to be constructed in Hong Kong, we should chose to construct theme parks that are more famous and distinguished.

Actually, more than one theme park may be constructed. For instance, there are the Disneyland and the Universal Studios in Los Angeles and more than 55 types of theme parks in Florida in the United States. The construction of different types of theme parks can let tourists extend their stay in Hong Kong and give them a feeling that it is worthwhile to visit Hong Kong.

If impossible, we can even make Hong Kong and the Pearl River Delta a centre of theme parks. There are many theme parks in the Pearl River Delta including the three theme parks in Shenzhen. If these theme parks are promoted effectively at the same time, they will definitely be more attractive to foreign tourists.

Commissioner for Tourism

Those in the industry and I welcome and support the decision of the Chief Executive on the appointment of a Commissioner for Tourism to promote Hong Kong's tourism industry. This also shows the Government's concern about and commitment towards the tourism industry. But I hope that the Government can make further considerations in its appointment of the Commissioner.

Candidates

Although the Commissioner for Tourism is subordinated to the Economic Services Bureau, I do not dismiss the possibility that an outsider may be appointed or a government officer will be assigned, but I do hope that the eventual appointee will be familiar with the operation of the government structure and also the development and trend of tourism.

Terms of reference

(1) Formulating long-term and comprehensive tourism development strategies

In the past , the Government's policies for the tourism industry were unco-ordinated and short-sighted. It did not take a broad and long-term view especially in respect of additional tourist facilities. As these projects take extremely long time to implement, continuity matters.

(2) Communication channel

Many government departments are related to tourism but the objectives of their work may not fall in line with the objectives of the tourism industry. Therefore, the Commissioner for Tourism must effectively communicate with government departments so that these government departments can take concerted efforts to carry out the relevant policies instead of working not in tune with one another. We all know that the seal incident in Taiwan this summer has arisen from the government departments in Taiwan not working in tune with one another.

In addition to the need for a sound mechanism of communication within the Government, the Commissioner should become a channel for handing down the directives from the higher authorities and reports to be made to the higher authorities. The Commissioner should collect, study and analyse the views expressed by those in the industry, find out the problems of the tourism industry and suit the remedy to the case, in order to formulate comprehensive and effective strategies that can help to promote the development of the tourism industry and enhance its competitiveness.

(3) Ambit

Although the Commissioner for Tourism is subordinated to the Economic Services Bureau and responsible to the Secretary for Economic Services, if the scope of his activities is limited to the Economic Services Bureau, the Commissioner's office will exist in name only. To successfully attain more effective trans-departmental co-ordination, the Commissioner should be given authority over these government departments.

Mr Deputy, I move the amendment but I also support the original motion. My amendment and the motion do in fact supplement each other and there are no conflicts.

Mr Howard YOUNG moved the following amendment:

"To delete "and" from "Hong Kong's tourism industry vigorously and", and to add after that ", including striving for the best terms for constructing and operating world-class theme parks in Hong Kong; in addition, the Government should expeditiously"."

DEPUTY PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment moved by Mr Howard YOUNG be made to Mr David CHU's motion.

Does any Member wish to speak? Miss Christine LOH.

MISS CHRISTINE LOH (in Cantonese): Madam President, it is indeed very good that we have a chance to talk about the tourism industry today, because something has obviously gone wrong with this industry, and this has aroused the concern of those who might not have paid any attention to it before. We should all realize that the tourism industry is playing a very important role in our whole economy.

Let me just add a few more words to the comments made by the two Honourable Members who spoke before me. First, I wish to discuss the issues relating to environmental protection. Two weeks ago, there was a Panel meeting on the Southeast Kowloon project, that is, the redevelopment project for the Kai Tak site, and I know that several Honourable Members who are here today were present at that meeting. At that meeting, a representative of the Windsurfing Association of Hong Kong said something which touched a chord in me. He said that members of his Association would never again be seen windsurfing in the Victoria Harbour. Why? Because the Victoria Harbour is just too polluted. And, he also told us a story. He said that the Windsurfing Association of Hong Kong once held a charity function, a windsurfing regatta, in the Victoria Harbour. But right after the regatta, many participants had to dispose of their surfing boards because they were stained with oil contaminants and other pollutants. This is the first thing I want to mention. It is all too easy for us to pay lip service to environmental protection, but if we are really to eradicate the various forms of pollution in Hong Kong, we will have to exert very strenuous efforts. That is why I hope that we can all remember the story told by the representative of the Windsurfing Association. The Windsurfing Association told us that if the pollution of the Victoria Harbour continued, we would probably fail to see any more windsurfing activities in the harbour.

The second thing I want to talk about is air pollution. I am sure that all Members here will agree that this problem is getting worse and worse. So we really have to do something about it, and I believe the Government wants to do something about it too. Last month, a book on the future of Sydney was published in the city, and the name of the book is "Sydney 2020, the City We Want". The air in Sydney is already clean and fresh enough, but the people there still regard the mitigation of air pollution as one of their major tasks. Let me quote the first sentence of the book: "The quality of the air we breathe has been raised as an area of concern within the city." This shows that they do accord a very high priority to mitigating the air pollution problem, and I know that they even want to make Sydney a centre of excellence in terms of environmental protection. Well, in terms of environmental protection again, we can all see what little progress Hong Kong has made so far. Let us not forget that if the quality of our water and air cannot meet internationally acceptable standards, our quality of living will inevitably be adversely affected; and, when our quality of living is adversely affected, how can Hong Kong become an attractive tourist destination? I hope all of us can realize that environmental protection actually involves many policy areas ─ the design of transport infrastructures; the need or otherwise for reclamation; where to carry out reclamation and to what extent; town planning; and, even the distribution of different kinds of community facilities. Reclamation is not just the construction of a few more roads along the waterfront where people can get closer to the sea. If we stick to this kind of approach, we will never do well in environmental protection.

Besides, Hong Kong is really very dirty, to the extent that we should all be ashamed of our public hygiene standards. But we can do better. The streets and markets of Hong Kong are so very dirty, but how come the people of Hong Kong can still put up with the situation? What can we do as individuals? Sometimes, we really should not hold the Government solely responsible, for we as individuals should also make our own efforts in many respects.

I also want to talk about the appointment of a Commissioner for Tourism. I agree with the two Honourable Members who spoke before me that as long as the appointee has the enterprise required, he or she does not necessarily need to be a civil servant on appointment. But these two Honourable Members, I am sure, have stopped short of saying that not one single existing civil servant is considered fit for the post. The Commissioner should be an officer of the directorate rank. These two Honourable Members of course know the directorate ranks, and they should also know that only the officers of such a rank can perform the duties of this post satisfactorily. However, can we identify any persons in the whole Civil Service who have the enterprise to formulate long-term plans, to unite the tourism sector in devising our long-term tourism strategies? If yes, let us just name him and commend him to the Chief Executive. Honourable Members know the Civil Service very well, but if even they themselves cannot name one single civil servant who is suitable for the post, then we would perhaps have to look for candidates elsewhere.

Finally, I wish to talk about theme parks. As Members may already know, a property developer has been granted permission to construct a theme park in Ma Wan. However, what will this theme park be like? Will it be able to serve our purpose? Actually, with this new theme park and the existing Ocean Park, there will be altogether two theme parks in Hong Kong. Many people like going to the Ocean Park. That being the case, should we then put in more resources to make it more attractive and appealing? Or, should we really have to build one more, giving Hong Kong a total of three theme parks eventually?

I find it very hard to support the amendment moved by the Honourable Howard YOUNG, and I am of the view that the main point of Mr YOUNG's amendment is already covered by the original motion moved by the Honourable David CHU. But when it comes to a special emphasis on theme parks, I do not think that there is sufficient information to induce me to support the amendment. For example, we know nothing about the amount of land required, the concessions to be offered to the developer concerned, the suggested locations and the possible environmental impacts. Nor do we know whether or not the suggested locations can be used for other purposes to bring more benefits to Hong Kong. That is why I cannot support Mr YOUNG's amendment today because all is too early. I also share Mr David CHU's worry that it may be too early and hasty to give such a special emphasis to the matter. There are now many rumours; some say that Disney has no interest in Hong Kong, but others say that people from Disney have already visited Hong Kong to negotiate with the Government. Yet some others say that representatives of our tourism sector and even the Hong Kong Tourist Association have been to California to discuss the matter with Disney. I do not know whether these rumours are true or not. But I wish to conclude my remarks by saying that nobody has given us any information which can enable us to conduct a meaningful debate on the matter.

DEPUTY PRESIDENT (in Cantonese): Mr CHEUNG Man-kwong.

MR CHEUNG MAN-KWONG (in Cantonese): Mr Deputy, the tourism industry of Hong Kong has been dealt a heavy blow by the recent financial turmoil, and because of our high exchange rate, our prices of goods have already become much higher than those in many other Southeast Asian countries. As a result, "the Shoppers' Paradise", a reputation we used to enjoy, has become very much a misnomer. However, I must say that the financial turmoil is only one of the many causes leading to the worsening situation, the reason being that our tourism industry itself has long since been plagued with latent problems. Owing to the constraints imposed by its natural landscape, Hong Kong already does not have too many magnificent views to offer, except its glittering skyline at night which earned it the name of the "Pearl of the Orient". To make things worse, with the air pollution which accompanies our urbanization, the deterioration of our water quality resulting from reclamation works and the rubbish found all over our streets, beaches, the countryside and even tourist spots, Hong Kong, or the Fragrant Harbour, is not fragrant any more. Quite the contrary, what we now have are just a stinking Victoria Harbour, a smoky sky and streets and places dirtied by rubbish of all sorts. Worse still, as China opens up itself increasingly to the outside world, and as the number of direct flights to it increases consequently, the natural vantage position of Hong Kong as a springboard to China and a window of the Orient on the world has gradually been eroded. Travellers entering or leaving China no longer have to stop over in Hong Kong. That is why we must not continue to cherish any illusory hope that we can maintain the competitive edge of our tourism industry merely by implementing passive and piecemeal measures.

Mr Deputy, our tourism industry must struggle for its own survival by looking for new ways of enhancing its competitiveness and stamina. That said, I must hasten to add that while we seek to review our policy on the tourism industry, it is extremely important for us to co-ordinate the work of the various departments involved. Responsibilities for the tourism industry are now scattered among the Economic Services Bureau, the Hong Kong Tourist Association (HKTA), the Airport Authority, the Planning Department, the Immigration Department and so on. If the Commissioner for Tourism is to enhance the links and co-ordination among these authorities, he must have all the abilities, enterprise and powers required for the formulation and implementation of long-term tourism development strategies.

To revitalize the tourism industry, we must first ask ourselves: What appeal does Hong Kong still have today which can induce people from afar to travel all the way here? The advantages of building up more scenic spots and tourist attractions, in particular a world-class theme park, are so very obvious that they do not need any further elaboration at all. The only question is whether or not the authorities concerned are going to fight actively for such a theme park, instead of watching the situation with folded arms. In this connection, even if the Government wants to protect the interests of Hong Kong and refuses to grant lands for the purpose at low prices, it should still consider the immense long-term economic benefits which a booming tourism industry can bring to Hong Kong. As an immediate task, we should of course fight for the construction of a Disneyland in Hong Kong, but at the same time, we should also explore some unique themes and then consider the possibility of constructing some small-scale theme parks which can highlight the characteristics of Hong Kong and meet the requirements of cost efficiency. Cartoon characters are one possible theme, but we may also consider lots of other themes such as technologies, movies, music and even family interests. The scale of the theme parks I have in mind may not necessarily be very large, but I am sure that they will be very appealing. Of course, Hong Kong is not bound to follow my ideas, but it can still draw some lessons from them. The most important thing is that while seeking to revitalize the tourism industry, we should always be prepared to put forward bold ideas, assess them carefully and then do our very best to realize them. And, besides theme parks, there have been many other suggestions, such as those relating to ocean-liner terminals, movie cities, museums and world-class venues for performing arts and sports. We must, however, point out that all these proposals must be considered on the basis of their development potentials and economic efficiency, and we should not rush them all in at the same time. Instead, we should progress step by step in a systematic manner, with a view to establishing a distinct image of Hong Kong as an unforgettable tourist destination, where every departing tourist will say to himself or herself, "I shall return.". If we can achieve this, we will be half way to success.

Mr Deputy, innovation is important, but equally important are also our attempts to re-package and expand our existing tourist attractions, including improvements to our tourist markets and scenic spots and the enrichment of the nightlife of Hong Kong. For example, we may turn the beautiful promenade along the Victoria Harbour into a tourist spot offering different attractions at night and during the day. Or, we may also develop the Lantau Island and the New Territories into green holiday resorts. However, it must be borne in mind that if we are to increase the competitiveness of our tourism industry, we must not ignore the importance of the quality of our physical environment and tourist services. In this connection, there are three points to note. First and foremost, we have to turn Hong Kong into a clean city; we must improve the quality of its water and air and deal properly with its pollution and rubbish of all sorts. All infrastructures must be designed with due regard for the conservation of the natural environment and ecology. In regard to the issue of cleanliness, many people have criticized that quite a number of public toilets in Hong Kong are extremely dirty, and, as evidenced by the poor comments received in some surveys, this is especially true for some public toilets situated in highly popular tourist spots with heavy flows of visitors. I believe that if a city is heavily polluted, then no matter how it is packaged, it will never arouse the interest of tourists. Second, we have to turn Hong Kong into a city of friendliness. To achieve this goal, we must improve the quality of workers in sectors like retailing, transportation and catering who receive or entertain customers on the front line. And, their multilingual skills should also be improved. What is more, the Consumer Council and the HKTA must follow up tourists' complaints seriously and impose heavy penalties on all those unscrupulous fraudsters who cheat or attempt to cheat foreign tourists. These two organizations must also set down some service delivery standards and introduce a quality service label system as quickly as possible. Finally, the various kinds of tourism publicity materials must be promptly updated. Even now, the publicity films about Hong Kong shown on the flights of some airlines still feature some age-old sampans and weathered boat people as their theme. And, one also finds it hard to understand why only the French cuisine is mentioned when tourists are introduced to the fine foods available in Hong Kong. Mr Deputy, when we think about the organization of large-scale exhibitions as a means of publicity, we should not forget other kinds of publicity channels like booklets, advertisement boards, short promotional streamers and even Internet homepages which can reach the masses. All in all, however, we must not forget that the best publicity is for Hong Kong to turn itself into a really attractive city with unique characteristics. Therefore, we must seek to depict the new look of Hong Kong to others, instead of forever relying on age-old sampans and sailing junks as our only attractions.

Mr Deputy, these are my remarks. The Democratic Party supports both the amendment and the original motion.

DEPUTY PRESIDENT (in Cantonese): Dr Raymond HO.

DR RAYMOND HO (in Cantonese): Mr Deputy, the tourism industry of Hong Kong has experienced many drastic changes over the past few years. In 1996, there were marked increases in both the number of tourists and the income of the tourism industry. However, since mid-1997, the industry has been on the decline. People generally attribute this to several factors, the most notable of which are the economic impacts sustained by neighbouring Southeast Asian countries and the waning appeal of the handover in 1997.

However, I would say that when we talk about the problems with our tourism industry now, we should also note some fundamental causes in addition to those I have mentioned. First, we do not have too many scenic spots which are really unique. Many of our once world-famous scenic spots and unique attractions like the Peak, the Victoria Harbour, Arbedeen, the Repulse Bay and so on are still found, but their attractiveness has declined drastically. Why do I say so? My Honourable colleagues will know the answer after listening to how a tourist narrated his half-day tour in Hong Kong.

He said, "The first item on my itinerary was a ferry ride in the Victoria Harbour. Looking from afar at Central and Tsim Sha Tsui along the two sides of its shore, I saw clusters of towering buildings, but the scene was still quite beautiful; but when I looked towards the northeast, in the direction of the old Kai Tai Airport, I spotted a stretch of barren hills. And, when I looked towards the northwest, I saw something even more terrible: What had once been a part of the Victoria Harbour now became a stretch of reclaimed land. I could not help sighing in dismay, and just when I was doing so, I felt the ferry rocking violently. I first thought that we must have run into an accident of some kind, but I found out immediately afterwards that the trouble was caused by a huge ship which had sped right past one side of our ferry. It was fortunate that no accident or collision resulted. Then, when I took a closer look at the water after the sea had clamed down, I saw something even more upsetting; the whole sea was practically covered with all kinds of litter and oil stains. So, I could only hope that I could see something better when I went to the Peak on my next stop. However, when I was there, what I saw made me think that I was on the other side of the harbour because I failed to see the Victoria Harbour before me. All I could see were the backs of those buildings which I saw during the ferry ride. Having taken a closer look, through the narrow space between the buildings, I spotted something which roughly resembled parts of the harbour.

Hence disappointed, I hurried to Aberdeen, in the hope that this world-famous fishing village was still there. But I was disappointed once again, for the "fishing village" had been practically reduced to a narrow watercourse as a result of the reclamation works on its two sides. I was so disappointed that I decided to leave immediately and go to Repulse Bay instead, without even bothering to examine the water quality there. As a matter of fact, I dared not expect to see too much in Repulse Bay because I knew that the more I expected, the more I would be disappointed. But this could not reduce my disappointment either. When I approached the beach, I was first met by a smoky sky and then the sight of a sea stained with reddish patches. As I went closer, I was able to see that this was in fact the result of a red tide. So, even though I did not expect to see too much, I was still very, very disappointed. Therefore, I simply did not alight, but headed straight back to my hotel instead, where I packed my things, cut short my trip and left Hong Kong." This is how the account of our visitor's trip ended.

Actually, in his account, our visitor also made some negative remarks about other aspects of Hong Kong, such as its poor hygiene standards, saying that its streets were dirty, public toilets appallingly unhygienic and a neglect of food safety behind its reputation as a gourmets' paradise. In addition, he also expressed disappointment at the varying standards of our tourist services, saying that some front-line workers responsible for serving customers in eating establishments, means of public transport and places of entertainment were not polite enough and left much to be desired in terms of English proficiency, attitude towards work and even proper business conduct.

The visitor's account which I have quoted can actually give some kind of insight into our tourism industry. Additional scenic spots are certainly one way of improving the situation of this industry, but what is more important is that we should deal first with the fundamentals. For example, we should first build up more unique tourist spots, reduce the impacts of pollution on existing scenic spots, upgrade our environmental and food hygiene and improve the quality of workers serving tourists at the front line. Before we can do well with all these fundamentals, the best which any addition of new tourist spots can achieve will just be a short-lived boost to our tourism industry.

In order to do the work well, the Government should promptly appoint someone with rich experience in the industry to the post of Commissioner for Tourism. Apart from having a thorough understanding of the industry, the appointee should also have the ability to promote our tourism industry effectively overseas. And, more importantly, we must note that only a person with vision, courage and innovative ideas can do the job well and meet the expectations of the people of Hong Kong. Finally, the appointee must be a person of influence who is able to maintain good working relations with local government officials.

Mr Deputy, I so submit.

DEPUTY PRESIDENT (in Cantonese): Mr WONG Yung-kan.

MR WONG YUNG-KAN (in Cantonese): Mr Deputy, in the past Hong Kong used to enjoy the reputation of being the "Shopper's Paradise" and thousands of tourists flocked to Hong Kong each year. And this "smokeless industry" in tourism earned quite a substantial amount of foreign exchange for Hong Kong in the past. But the financial turmoil in Southeast Asia has made a head-on impact on the industry and as a result the number of tourists has dropped 21% in the first half of this year and revenue from tourism fell 35% during the same period. The revival of the tourist industry has therefore become a most urgent task.

Are publicity efforts made by the Hong Kong Tourist Association (HKTA) and government officials alone enough to revive the tourist industry of Hong Kong? If the tourist spots of Hong Kong are not that attractive, even if the government officials are most eloquent and persuasive, they will not be able to attract tourists to come here. Therefore, the addition of tourists spots brooks no delay.

As for adding more tourists spots, Hong Kong should make the best use of its advantage as a point where the East meets the West and what makes it so unique is that the new also blends happily with the old. For example, Hong Kong used to be a fishing port and it is not surprising to see a fishing junk being used as a symbol of Hong Kong by the HKTA. If we can make some tourist spots related to the fishing industry, there would certainly be some attractions. The Planning Department has said earlier on that it would conduct a study on the development of Tai O, including a study on the potentials of turning it into a tourist spot. Personally I hope that the authorities concerned will complete this study expeditiously, so that this Venice of Hong Kong can come up with a fresh look.

Besides, there is a possibility that Hong Kong may develop some sightseeing fishing activities. This kind of tourist activity is a mixture of sightseeing, fun and fishing. Tourists can ride on a refurbished fishing boat and have fun in the sea. They can savour the beauty of the sea, fish like a fisherman and eat their catch. Such an experience of the life of the fishing people would be very attractive to tourists from overseas, and for the local people, it is an equally unique experience. We are aware that a similar plan is carried out in Zhuhai.

The sightseeing fishing industry can be a new way out for the shrinking coastal fishing activities. The extensive dredging works in the coastal waters of Hong Kong in recent years have caused fishing resources to dwindle and the development of sightseeing fishing can greatly reduce the amount of catches so that there can be a chance for the fishing resources to recuperate and multiply.

Last year I went to Taiwan and I heard about their development of leisure fishing. The Government can set aside certain waters as conservation areas. Fries can be put into these waters and only licensed boats are allowed to enter into these areas to catch fish and squids. As a matter of fact, squid catching is a favourite activity for Hong Kong people in last couple of years, and some tourists even come here especially for this purpose.

After strengthening the hardware facilities of the local tourist industry, there is still room for improvement in the efforts made by the Government to promote the tourist industry. Although in the past the tourist industry was very prosperous, no government department was specifically set up to promote the industry. The industry was left alone on its own. The HKTA has only a limited purview and cannot play an effective co-ordinating role. For example, the HKTA may have completed a study on tourist spots and submit the findings to the Government for consideration but then the Government may not necessarily accept these findings.

In this year's policy address, the Chief Executive has at last decided to appoint a Commissioner for Tourism whose duty will be to promote the development of the industry. Although the Government has not yet submitted the candidate for this post together with a description of the scope of his powers, from the speech made last Wednesday by Mr Stephen IP, the Secretary for Economic Services, it can be seen that the Commissioner will be responsible for laying down a policy for the entire tourist industry, defining its long-term development, making available the matching "software" for the industry, conducting research and development on new tourist spots, implementing various recommendations on the development of tourism, consulting all sectors of the community, joining efforts with the mainland authorities, co-ordinating policies and measures with various departments on tourist matters, co-operating with various district boards and carrying out small-scale improvement programmes in the tourist spots.

The Democratic Alliance for the Betterment of Hong Kong hopes that the Commissioner for Tourism can give thorough consideration to all measures meant for reviving the Hong Kong tourism industry. We also hope that the Commissioner will be given the right kind of powers and resources, so that he can co-ordinate all government departments in the promotion of tourism. Besides, we expect the Commissioner to have a good international perspective, a good grasp of the latest trends in the international tourist industry, and the ability to introduce all kinds of measures which can promote the development of this industry so that Hong Kong can once again become a must on the tourists' itinerary.

With these remarks, Mr Deputy, I support the original motion and the amendment.

DEPUTY PRESIDENT (in Cantonese): Mr CHAN Kwok-keung.

MR CHAN KWOK-KEUNG (in Cantonese): Mr Deputy, in the past, Hong Kong used to be very proud of being the "Pearl of the Orient" and the "Shopper's Paradise", but in recent years, Hong Kong has to face many competitors. Coupled with its own limitations, the days when Hong Kong could make use of itself being a "Shopper's Paradise" as a selling point to generate foreign exchange seems to have lost their lustre.

The tourist industry can well be said to be a "smokeless" industry which blends all the economic advantages and exotic life of a place. Its development is closely tied with service industries like retail, hotel, and catering. These industries attract foreign visitors and their consumption brings in foreign exchange. When we look back, we can see that Hong Kong used to have its own manufacturing industries and the variety of products for sale in the local market was good value for money. These were the factors contributing to the prosperity of the tourist industry.

However, with the economic transformation of Hong Kong and the relocation of the manufacturing industries northwards, there has been an over-emphasis on finance, real estate and such like sectors. Property prices are pushed upwards as a result of speculation, rents for commercial premises stay at exorbitant levels, prices therefore rise. For consumers and tourists, prices in Hong Kong are in no way cheaper than those in Thailand, South Korea and Taiwan. With the absence of natural beauty and innovative pleasure-seeking spots, we have been fast losing our status as a hot spot for the tourists.

On the question of scenic spots, there has been an absence of well-planned and continuous development in this respect. In fact, Hong Kong lacks in cultural and historical spots. This is due to the rapid development of the city which has resigned a lot of our heritage to ruins and tatters. Moreover, the Government lacks a sound and comprehensive cultural policy. In terms of theme parks and parks displaying miniature scenes, Hong Kong has nothing to offer. As for the hot spots frequented by tourists, these are all related to infrastructure constructions, such as the Tsing Ma Bridge, the Peak Tram, the Mid-levels elevator and so on which are all originally meant to be public facilities. In respect of theme parks, apart from the Ocean Park which was built many years ago and enjoying a certain reputation, we cannot see any long-term planning in this area by the Government.

Mr Deputy, I want to stress that the tourist industry is not a local industry which can develop on its own. It is subject to a lot of constraints. In particular, our imminent work in urban planning will have significant impact on the future development of the tourism industry. For example, in Kowloon East where I live and work, the focus of attention now is on the redevelopment of the Kai Tak Airport site. The recent planning proposal put forward by the Government lays emphasis on massive reclamation which virtually straightens out the natural coastline of the Victoria Harbour. The Harbour will be made much narrower and would seem more like a river course than a harbour. Then of course, there is the environment issue. But as many professional bodies and environmental groups have already raised many views and criticisms, I do not wish to elaborate here.

However, I wish to emphasize one point and that is: When the Government goes about redeveloping Kai Tak and its surrounding areas, it must consider the space for "sustainable" development. This would include potentials for tourist spots and a merging with the existing scenic spots of the district, such as Lei Yue Mun, the old village in Cha Kwo Ling and Hoi Sham Park in Kowloon City. These places used to be rather unrelated, but they should not be neglected in the new planning concept. The site of the Kai Tak Airport is by itself a landmark signifying the legend of Hong Kong. It can be transformed into a new tourist spot and will go well with the nearby scenic spots under a brand-new tourist theme.

Mr Deputy, the tourism industry of Hong Kong cannot rely on the spectacular and breath-taking natural beauty like our motherland, nor does Hong Kong possess a wealth of cultural heritage. It is therefore imperative that Hong Kong should develop its own attractions. There is no way that it can continue to survive with a half-hearted mongering of just one or two selling points. Times have changed. Hong Kong is facing increasing competition nowadays. Only if we can come up with new ideas, strength and vitality, can we hope to set things right again and revive the industry.

Mr Deputy, if we are to go about trying to revive the tourist industry in the same way as the Secretary would, that is, in a way like young people courting their sweethearts, I am sure this is doomed to failure. Even if we can get the sweetheart we want, she will be very different from our dream girl. She is just a very commonplace girl. It is just because other people are all having one that we also want one. The Secretary would be much better off if he goes to India to find his better half, for he would be getting a handsome dowry. Mr Deputy, I so submit.

DEPUTY PRESIDENT (in Cantonese): Mr LEE Cheuk-yan.

MR LEE CHEUK-YAN (in Cantonese): Mr Deputy, just now Mr CHAN Kwok-keung mentioned that Hong Kong did not have any natural beauty. It may not be the case because the hills and water in Hong Kong are not that bad after all. It is only that the water is polluted. So the water pollution problem should be tackled. It is obvious that the tourism industry is in a downturn. One can only look at the figures. From January to September 1998, the number of tourists visiting Hong Kong was 6.95 million, with a drop of more than 10%. The fall in the number of tourists from Japan and South Korea was the greatest, representing a drop of more than 40%. Tourists from Southeast Asia dropped 28%, those from Europe fell 16.7%. It is fortunate that there was an increase in the number of visitors from both sides of the straits. Tourists from Taiwan increased by 0.8% and those from China increased by 12.3%. These figures show that there has been a real drop in the number of tourists. But we are confident that Hong Kong has the potentials to make the number increase again. Apart from the fall in tourist numbers, per capita consumption fell by 20% and there was a 25% cut in hotel business. For no apparent reason the tourists spent less in Hong Kong and this transferred into a 35.4% drop in the total income of the tourist industry in the first half of 1998.

Why do these problems appear? There are five reasons for that: the heats of the handover have cooled off; the financial turmoil; the lack of scenic spots in Hong Kong; consumption expenses are higher than many places in Southeast Asia; and the human or "software" problem. The last point is often neglected by other people and just now I have heard a lot of discussions on "hardware" and so I wish to talk about the "software" problem ─ people.

The fifth reason is the "fools effect". If we take tourists as fools, this will bring a very negative impact. Why do I say so? First, I think you may still recall some Japanese newspapers published articles on how Hong Kong hotels discriminated against Japanese visitors, or I would rather say, how the hotels thought extremely high of the Japanese, so high that they charged them a higher fee. I am not sure if this is in fact the case, but once this piece of news was spread, many hotels in Hong Kong had to put up a defence. And this has become a fact, and though I have no wish to dig into this matter today, it has tarnished the image of Hong Kong.

Second, there are some bad practices in the tourist sector. Nowadays, it is very common to have "zero package tour charges". That is to say, the travel agency gives the tour to the tourist guide and let him squeeze as much money from the tourists as possible. The guides do not even get a cent as salary and some are paid a basic salary of $1,000 to $2,000 a month. Their income is entirely dependent on how much the tourists spend. That is why they try all sorts of means to make the tourists buy things, hoping that they can get some commission in return. What kind of a system and mentality are these? Once the tourists are in Hong Kong, the eyes of the tourist guides will open up and all they see is the dollar sign. This is tragic. For if the people of Hong Kong are taking the tourist as fools and all they do is to snatch money from them, when the tourists returned to their home country, they will spread their experience in Hong Kong around and this will certainly make Hong Kong a notorious destination. There have been some cases in which some counterfeit goods are sold to the tourists, but then that is done by a minority of black sheep in the sector. The root of the problem lies in the system itself. If our system is one which forces the tourists to buy things and that is how the guides get their income, then how can we expect a good quality of service? If we forget about the system and say we want to make the tourists feel a sense of hospitality as Mr David CHU has said just now, then this is not practical at all. What kind of hospitality is that if the tourists are cheated and slaughtered like a flock of sheep? How can we expect a quality service out of a system like this? The tourism industry should devise some better ways to enable the guides earn a decent living. This can give them the incentive to give quality services to the tourists. I trust if we can do away with these bad practices and get rid of these negative impacts, there will be salvation for the industry.

Take another example. Coach drivers earn a monthly basic salary of some $2,000, and on top of that, they are paid for each trip. Just imagine they are still selling slides to the tourists as a sideline. And it is amazing that tourists do buy these slides. How nice they are. For I do not think they have slide projectors back home. And who would watch slides these days? These drivers are still selling slides. But I do not want to see these drivers being forbidden by their bosses to sell slides, for this is their sideline. The problem can be solved if only their bosses can turn the income these drivers are making from selling slides into their basic salary. The system is like this and the service quality goes with it.

I wish to call on the employers of the tourism , hotel and retail sectors to pay more attention to the service quality of their employees. In so doing, the benefits and wage of the employees must be well taken care of. Otherwise, how can they wear a smile on their face? I hope the employers can abandon the mentality of giving less to the employees while demanding more from them. I know that in the recent strike in the Disneyland in the United States, both the management and the staff came to an agreement after collective bargaining. I think both parties have found a new point of convergence and the staff felt that they have got a reasonable pay. There should be improvements in their services in the future. Therefore, when we talk about the tourism industry, we should also think about the "software". We must think and look further ahead if Hong Kong really wants to make "the customer is always right" a pledge. We must never be so short-sighted as to "sail with full mast when there is wind". We must think of our long-term interest. I hope all of us will pay attention to the employees' benefits and to make long-term money for Hong Kong.

Thank you, Mr Deputy.

DEPUTY PRESIDENT (in Cantonese): Miss CHOY So-yuk.

MISS CHOY SO-YUK (in Cantonese): Mr Deputy, with the 21st century around the corner, some of the basic factors contributing to the past success of the Hong Kong tourism industry over the last 40 years have already changed. There is a need to find some new directions. The policy address this year doubled its coverage on the future development of the tourism industry as compared to that of last year. From a negative perspective, the increased coverage signifies that problems in the sector are becoming serious and the Government should do more rescue work. From a positive perspective, not only does the increased coverage show the Government's awareness of the contribution made by the sector, but there is also a greater sense of crisis and urgency to make improvements on the sector. And that is a comforting thing to see.

The creation of a Commissioner for Tourism is of vital importance to the revival of the industry. The Commissioner is responsible for co-ordinating many government departments, semi-official organizations and private institutions. He has to be in full grasp of the pulse of international political, economic, social and technological developments. Even seasonal and climatic changes should also be considered. To cope with these kinds of professional and strategic work, the Commissioner must possess a versatile business sense, extensive tentacles in the market, an ability to make quick responses and executive powers to mobilize government resources effectively. The success or failure of the Commissioner hinges on whether the Government can change its bureaucratic style, for the public would not like to see the slow response, rigid dogmatism, evasion of responsibilities and complacency as seen in the new airport standstill and the avian flu scare. This kind of mentality would defeat the work of the Commissioner.

On the other hand, as pointed out in a study made last year by the Hong Kong Tourist Association (HKTA), like many other places in Asia, the major stumbling blocks to the growth of the tourism industry lie in the shortage of capital, the developers' lack of experience in tourist projects and the heavy costs of financing posed by the high interest rates. Under such constraints, the Government may encourage more investments in theme parks of a relatively smaller scale. The $100 million International Events Fund set up by the HKTA should not only aim at the introduction of highlights in Western culture but also the promotion of Chinese culture, with the hope of making the unique East-meets-West culture of Hong Kong come alive. Many businessmen here have very extensive business contacts in China and this will greatly assist them when they want to introduce tourist items featuring the attractions of Chinese culture. Thus their confidence in the investment projects would be also enhanced. I expect the Government to be fully committed to assisting the work of the Commissioner for Tourism and to provide concessionary measures in transport planning, rents for the land leased, and the application for working permits and conditions of stay for performing artists. These measures will hopefully stimulate local and overseas businessmen to invest in tourist projects and the performing artists to perform in Hong Kong.

Mr Deputy, to attract investments in the tourism industry, the exhibition sector should not be neglected. Like the retail and catering sectors, the exhibition sector is closely tied with the tourism industry. However, the exhibition sector is different from retail and catering trades in that its prosperity is not only due to the economic boom in Hong Kong and the peripheral areas, or the overall demand and rise in consumption; it is a high value-added service industry by itself and can be a driving force for economic growth, and in particular, the development of the tourism industry.

In fact, in 1996 alone, the exhibition industry generated some $5.5 billion foreign exchange earnings. More importantly, it helps to attract tourists with a high consumption power and facilitate the growth of many industries. According to information provided by the Government, about 700 international conferences were held in Hong Kong in 1996 with an average attendance of 115 persons per conference. In the same year, some 60 exhibitions attracted as much as 3 000 overseas participants on each occasion. Some consultancy reports even pointed out that overseas participants for conferences and exhibitions stayed in Hong Kong for as long as five or six days, or two to three days longer than the average visitor. Their average consumption was two and a half times more than the average holiday-maker, and as much as 13 times more than the spending of local people in shopping and entertainment. For every dollar spent in an exhibition, five more dollars will be spent in the hotel, transport, retail, catering and such like industries. Apart from these actual benefits, the exhibition industry also brings in intangible benefits. It can promote the image of Hong Kong as an international commercial and service centre, enhance its role as an intermediary between China and the world in economic exchanges, and also highlight Hong Kong's leading edge and uniqueness among the major cities of China. Is this not precisely important selling points to attract tourists?

The issue of availability of sites is crucial to the development of exhibition services which can stimulate the growth of the tourism industry. The existing wings of the Convention and Exhibition Centre in Wan Chai can only provide some 64 000 sq m of leasable area. It will not be sufficient to hold international exhibitions of a super-grand scale. I therefore propose that the Government should set aside 300 000 sq m of land adjacent to the new airport and build an exhibition hall which will charge reasonable fees. And the Convention and Exhibition Centre should lower its lease rates so as to close the gap between the lease rates charged between Hong Kong and other places in Asia in respect of exhibition floor space.

Mr Deputy, the tourism industry has made undeniable contributions to the making of Hong Kong as an international metropolis. Now that the tourism industry runs into troubles, each and every one us in Hong Kong should pitch in to help. It does not matter if it is being courteous to tourists or investing huge amounts of money in tourist projects, all would be valuable support.

With these remarks, I support the motion and the amendment.

DEPUTY PRESIDENT (in Cantonese): Mrs Selina CHOW.

MRS SELINA CHOW (in Cantonese): Mr Deputy, one of the bitter fruits of the Asian financial turmoil is a drop in the number of tourists visiting Hong Kong, and this has heaped more blows to the already slackened retail and catering businesses. Although the latest figures show that there are signs of recovery in the tourism industry, it is still uncertain whether these will last.

In the face of this downturn in the tourism industry, the Hong Kong Tourist Association (HKTA) makes use of the theme of "Hong Kong ─ the city of life" to launch an advertising campaign. The wave of massive publicity efforts indeed has caused greater exposure of the territory in international media. However, the image of Hong Kong so presented is still the food-and-fun kind of "chop suey" image. The results are not bad but not outstanding. If we look at the things Asian countries are doing to scramble for tourists and their precious foreign exchange, Hong Kong's publicity efforts do have some inadequacies. Recently, the South Korean President KIM Dae-jong appeared in a television advertisement asking tourists to come to his country. I am not saying we should invite Chief Executive TUNG Chee-hwa to put on a show as well, but at least we should try some bold and original concepts and methods of expression to attract tourists and make them feel the irresistible urge to come to Hong Kong and have a look.

Of course, apart from innovative advertising strategies, the more important thing is to open up new tourist spots to attract more tourists to Hong Kong. Therefore, the Liberal Party is in full support of building a world-class theme park such as a Disneyland. Being the proponent who raised this idea many years ago, of course I support the building of a Disneyland. But as I pointed out in the motion debate on the policy address, no matter how eager we were to build a Disneyland in Hong Kong, we should never create bargaining chips for the other party. As the last line of defence in monitoring the fiscal management of the Government, the Legislative Council should press the Government to fight for this project which can stimulate long-term growth in tourism and with the most favourable conditions.

Last week, the Secretary for Economic Services, Mr Stephen IP, made an analogy of courting a girl to the Disneyland negotiations. I think if we can be heart-to-heart with Disney and become partners for life, this will not only be an advantage to Hong Kong, but can also bring in substantial profits to Disney. But we should not only focus on just this one choice, in case Disney asks for an exorbitant price, the Government can also consider other internationally successful theme parks such as the Universal Studios or others such as Knott's Berry Farm, Magic Mountain, Thorpe Park and so on. So, I support the amendment made by Mr Howard YOUNG and I ask for Members' support as well. Just now Miss Christine LOH said that she did not have enough information at hand and she thought that we should take our time. I feel very surprised because the information she got was in fact inaccurate. The information she said was not enough can be obtained easily from the HKTA. I am not sure what she was waiting for. I am afraid if we let this chance slip away easily, just like the way Britain was indecisive and so Paris snatched away the chance of building the Disneyland in Europe, then we will only be sorry for letting this golden opportunity slip through our hands.

Mr Deputy, I wish to look into the issue of how to enhance our position as "Shopper's Paradise". Most of the people in the wholesale and retail sector which I represent are hardworking and honest businessmen. But unfortunately, a handful of black sheep in the sector have ruined the reputation of the entire sector. I have heard that in some districts frequented by tourists, such as Tsim Sha Tsui and Mong Kok, some audio-visual shops run their business in a fraudulent manner. They sell substandard or counterfeit goods to tourists unaware. Some unscrupulous businessmen raise the price of the goods on the spot. Some do not stick a price tag to their goods and ask for exorbitant prices. There are some jewellery shops which make use of the strong demand for gold jewellery and sell such goods which do not match the purity claimed. Since these tourists stay only for a short time in Hong Kong and they have no place to go for redress, not even with the police, and so when they return home, they will spread the experience they have in Hong Kong. This kind of negative publicity is much more powerful than any expensive advertising and will damage Hong Kong's reputation seriously.

To solve this problem and to restore the confidence of tourists in Hong Kong, I think we should enhance our monitoring and complaint mechanisms. First of all, the HKTA and the relevant government departments can encourage tourists to look for help. They can post hotlines for help in all the major hotels, shopping arcades, the airport and taxis so that tourist can have someone to look to for help. These hotlines should be manned by operators seven days a week and at least from nine in the morning till midnight, for people do not like to speak to a telephone recording machine. The procedures for handling complaints should be simplified because tourists only stay here for a few days. They would prefer not to come the next time rather than to spend almost a day in making a complaint. So if the complaint mechanism really works well and the complainants can get some prompt redress or compensation, then this will help to mend Hong Kong's tarnished reputation and restore confidence lost. In the end, this will also be beneficial to those honest businessmen in the retail and wholesale sectors.

Lastly, I wish to talk about our expectations for the Commissioner for Tourism. We welcome the appointment of a Commissioner for Tourism for the purpose of promoting the tourism industry. There are some opinions that this Commissioner should be appointed from among the tourist sector. I do not agree to that entirely. I think the Commissioner should not only be aware of the needs and problems of the industry, but also well-acquainted with the operations of the Government. And for the latter requirement, Miss Christine LOH seems to hold a different view. For there are many government departments which have some sort of relation with the tourism industry, but there is a lack of co-ordination among them. The tourism industry only occupies a very low priority in these officials. The Commissioner should collect views in the sector with an open and proactive attitude so that views from the sector can reach those at the top. He should have sufficient commitment and influence to break the barriers between government departments and change the bureaucratic culture of each operating on its own and the staple chase. We hope that the Commissioner can touch the hearts of the officials, so that when the television and movie celebrities make this call on the television: "Hong Kong's tourism starts with you!", they can respond and say ......

DEPUTY PRESIDENT (in Cantonese): Mrs Selina CHOW, your time is up.

MRS SELINA CHOW (in Cantonese): "That goes without saying!" (Laughter)

DEPUTY PRESIDENT (in Cantonese): Mr MA Fung-kwok.

MR MA FUNG-KWOK (in Cantonese): Mr Deputy, the tourism industry of Hong Kong has all along been one of the linchpins of the territory's economy, bringing in huge foreign exchange earnings. But from 1994 onwards, the price of property rose by leaps and bounds, wages were up and so were the charges for hotel rooms. Price levels for goods and other kinds of consumption stood high. Hong Kong has been losing its reputation as the "Shopper's Paradise". Adding to this the absence of any new tourist spots and the economic downturn in Japan, Korea and the Southeast Asia, the number of incoming tourists has seen a slackened growth.

In the first half of 1996, many tourist agencies were able to record very good performance as a result of their massive publicity for the handover occasion. There was a continual rise in tourists, but then it also prematurely took away many people who might visit Hong Kong in the following few years. As the date of the 1997 handover approached, the huge rise in hotel charges and plane tickets put many tourists off. This was most obvious among Japanese tourists. Many Japanese tourist agencies struck Hong Kong off their itinerary at the end of 1996. Thus the number of Japanese tourists fell greatly in the second half of last year.

In line with the fall in tourist numbers, there was a downward revision of charges for hotel rooms and air tickets. But the psychological barrier of Hong Kong being an expensive place could not be overcome so easily. We believe that it would take quite some time before tourist confidence can be restored in Hong Kong. However, when the number of tourists rises, the charges for hotel rooms and air tickets will also rise. By that time there will be another adverse impact on the desire of tourists to visit Hong Kong. And so the same vicious cycle would go on.

To sustain the growth of the Hong Kong tourism industry, one of the most important factors is to make the prices of hotel rooms and air tickets maintain at a stable level. In the past, the growth of the industry was made possible by the improvements and investments made by people in the industry in accordance with the laws of the market. There was no co-ordination in the overall and strategic developments.

In his policy address, the Chief Executive suggested to appoint a Commissioner for Tourism with the duty of promoting the development of the Hong Kong tourism industry. I hope that this proposal will enhance and sustain the competitiveness of the local tourism industry, facilitate the co-ordination of the Policy Bureaux and to devise a long-term strategy which covers such items as the number of hotels to be built, a policy on civil aviation and the addition of tourist spots.

In making land use planning, the Policy Bureaux should make a strategic planning on hotel land use as well. This will ensure a steady supply of hotel rooms so that there will not be a long-standing tight supply of hotel rooms. Thus the prices for hotel accommodation will not be pushed up, thereby reducing the attractiveness of the territory as a tourist spot. Moreover, with the commissioning of the new airport, the Government can start to think about a civil aviation policy which aims at increasing the number of incoming aeroplanes and flights, and to introduce more competition so that air fares can maintain at a reasonable level over a long period of time. Considerations can also be given to simplifying the immigration procedures for tourists in order to facilitate their entry.

As for the addition of tourist spots, recent debates on the issue focused on the construction of a Disneyland in Hong Kong. The building of a world-class theme park in Hong Kong would definitely help to enhance the competitive edge of our tourism industry. But the project should start from business considerations and take into account the environment, projections on incoming tourists, costs in land and infrastructure and franchise fees and so on. After assessments and analyses are made, we can then adopt a suitable stance in our negotiations with the party concerned.

In our consideration of building of a theme park, we should take on-board views forwarded by various parties. It must be remembered that the proposed construction of a brand-name theme park should not be taken as the only way forward and target, dismissing other feasible suggestions: A brand-name theme park is not something irreplaceable. We can also consider building not just one theme park. The most important consideration is whether the construction of a theme park can integrate with other industries, spur their growth and look after the interests of many other industries.

A development in unison with other industries is indeed crucial to the diversified growth of the tourism industry. A reliance on specific tourist spots alone will not meet the needs of tourists whose demands are getting more sophisticated. Therefore, the newly created Commissioner for Tourism must devise a set of more systematic and diversified strategies. In formulating development plans for the tourism industry, the Commissioner should incorporate factors such as the multi-culture features of the territory, the performing arts business of international standing and co-operation with neighbouring regions and so on. Only by so doing can the strategies become the driving force behind an overall growth of the local economy.

To ensure that the Commissioner promote the growth of the local tourism industry effectively, I think that the Government should not confine its choice of candidates to people within the Civil Service when appointing the Commissioner. The Government should consider appointing a person who has good knowledge of the sector so that the Commissioner can act as a bridge between the sector and the Government, and to make the policies devised by various Policy Bureaux fall in line with the development of the sector.

Moreover, the Government should also review the roles played by the Commissioner and the Hong Kong Tourist Association and their relationship as soon as possible, with a view to ensuring better co-ordination and more effective utilization of resources. It will also enable the re-formulation of policies conducive to the growth of the industry and to meet the needs of long-term development.

I so submit in support of the motion moved by Mr David CHU and the amendment introduced by Mr Howard YOUNG. Thank you.

DEPUTY PRESIDENT (in Cantonese): Mr HUI Cheung-ching.

MR HUI CHEUNG-CHING (in Cantonese): Mr Deputy, the tourism industry in Hong Kong has always been closely tied with the economy. However, the number of tourists visiting Hong Kong has witnessed a drastic fall since last year. According to figures from the Hong Kong Tourist Association, in the first half of 1998, there was a marked drop in the number of tourists from North and South America, Europe, Africa, the Middle East, Asia, Macau and even mainland China. Tourists from Japan, for example, took up more than 20% of the incoming tourists in 1996, totalling at more than 2.3 million. But the figure dropped by as many as 1 million in 1997. The number of Japanese tourists kept on falling in the first half of this year and was only 40% of that of last year. According to sources from the sector, the business turnover of the 60 travel agencies in Hong Kong specializing in tours for Japanese tourists dropped by 70% to 80% since the middle of last year to date. Despite a rise in the number of Japanese tourists in the last three months, the present situation is still the worst in three decades. If this situation goes on, the 200 000-plus people employed in this sector will be threatened by unemployment. Those sectors such as retail, catering, transport, manufacturing and even export trade will all be seriously affected because they are closely tied with the tourism industry.

The drop in the number of tourists can be attributed to the fact that the prices of goods in Hong Kong are no longer attractive. Last year, half of the revenue of the tourism sector came from shopping consumption. Income derived from sightseeing did not even make up 3% of the total consumption. The high level of consumption expenses will not only affect the tourists' desire to come to Hong Kong for the first time or to revisit the territory, it will also shorten the length of their stay and this is fatal to the tourism industry here.

In Asia, countries like Japan, Thailand, South Korea, the Philippines and Singapore are both rivals of the Hong Kong tourism industry and the major sources of patronage. The currencies of these countries devalued by 10% to 40% during the Asian financial turmoil. This had increased the costs of the people from these countries when they came to Hong Kong. But on the other hand, these countries would also snatch away the potential tourists for Hong Kong. Take the example of Japan again, according to statistics from the Ministry of Justice in Japan released early this year, there is an increase of Japanese tourists going to Thailand, South Korea and even countries in Europe and in America the currencies of which have not devalued. The marked drop in the number of Japanese tourists coming to Hong Kong is obvious. About a decade ago, prices in Hong Kong were only half of those in Japan. Now the prices of the two places are almost the same. As tourists are smart consumers, they would naturally turn away from Hong Kong and go to other places where things are cheaper.

Price reduction is a way to save the slackened market. But as the major Asian currencies would remain weak in the foreseeable future, the results of a price cut would not be very marked. The Government can make use of new facilities like movie studios, theme parks, large-scale performance venues and the cable car in Ngong Ping, Lantau, to make Hong Kong more attractive to tourists and to expand various channels of tourist revenue so that Hong Kong will not be hard hit by a lowering in the tourists' incentive to do shopping here. Unfortunately, the construction of these tourist facilities will take a lot of time and cannot meet the dire needs of the present, but this does not imply that there is not much the Government can do at present. On the other hand, there is much room for improvement in the existing tourist policies and facilities so that their cost-effectiveness and consumption from the tourists can be raised.

As for the tourists, the Government of the Special Administrative Region (SAR) can persuade the Central Government to reduce the handling fees and simplifying the vetting procedures for mainland people who want to come to Hong Kong as tourists. At the same time, the SAR Government can enhance co-operation with the Shenzhen Municipal Government and to promote package tours for Hong Kong and Shenzhen. The SAR Government should also seek permission to allow the coaches of Hong Kong registered tourist agencies to carry overseas tourists to shuttle non-stop between Hong Kong and Shenzhen on day trips to designated spots in the two cities. This move will increase the length of stay for tourists in Hong Kong. Also, since the consumption power of Taiwanese tourists is about the same as that of Japanese tourists, the SAR Government should seek the permission of the Central Government to provide "landing" visa services for Taiwanese tourists so as to attract more Taiwanese tourists to come to Hong Kong.

Insofar as tourist spots are concerned, the Big Buddha in the Po Lin Temple on Lantau Island is a favourite among tourists. But the vegetarian food offered and the sanitation facilities there are a disappointment. The Hong Kong Tourist Association should work with the relevant organizations to seek improvement in these areas. The Government should also study into the opening of roads to coaches operated by registered tourists agencies in order to increase the efficiency in providing transport services for tourists. The Tsing-Ma Bridge is a must for tourists to visit, but the majority of tourists visiting the Bridge only stay there for a very short time. The reason is that there is a serious shortage of eating outlets and shops, and the exhibition hall is too small. Is the Government letting a chance to make money slip quietly away? Furthermore, can the former Government House be opened to the public all year round? Is it possible to turn it into a museum featuring all the governors of the colonial past?

There is already a lack of attractive natural scenic spots in Hong Kong, but even so, the Government and some members of the public are not cherishing these scanty natural endowments well enough. The Victoria Harbour is in constant threat of reclamation. The old fishing village of Aberdeen, though not boasting of a Fishermen's Pier, used to have a very unique flavour in the eyes of the tourists. But it has now become a stinking pool of stagnant water. If we do not have the slightest care for the city in which we live, how can we expect the tourists to be interested in it?

Mr Deputy, instead of hoping for a recovery of the tourism industry, we had better first ask ourselves what contribution can we make. With these remarks, I support the motion moved by Mr David CHU. Thank you.

THE PRESIDENT resumed the Chair.

PRESIDENT (in Cantonese): Mr TAM Yiu-chung.

MR TAM YIU-CHUNG (in Cantonese): Madam President, over the years, the tourist industry has been a "smart kid" who never causes his parents to worry about. He is always the top student in class and even brings much money home to help his family out. Although he is earning less now, his parents should absolutely not just throw him out and forget about him. Rather, they should encourage him to receive retraining in order to sharpen his competitive edge.

The Government has pledged in the policy address to develop more tourist spots and also to upgrade the tourism infrastructure and facilities. Other than striving to have a Disneyland built in Hong Kong, the Government can indeed consider many other aspects, such as joining hands with other organizations to set up or construct various theme parks including a movie world or studio and so on. On the other hand, it can also consider developing a large "entertainment city" where people can go for entertainment, shopping, food and beverages as well as cultural and art appreciation all in one place. Moreover, the promotion of cultural tours, development of "theme gourmet areas" or guided tours on old and modern architectural appreciation are all feasible ways. These ideas are not novel but if they can be implemented successfully, they will certainly bring variety to tourism programmes in Hong Kong.

I feel that we should at the same time consider other measures which are, I believe, though a bit trivial as compared with the construction of theme parks, useful to tourists. For example, if we can even take care of such subtle matters as improving the street lighting, increasing indication signs for tourists, installing information and telephone booths and so on, we will enable the tourists to experience the endless charm of this city fully at ease. The Government can also make improvements in the following respects. Say, if at the viewing platform of the Tsing-Ma Bridge, the exhibition room can be expanded, more exhibits displayed and foods stalls and souvenir shops provided, tourists will remain there longer, gain a deeper impression of the place and spend a little more money there.

The future Commissioner for Tourism will certainly have a heavy responsibility as Members have put forward so many ideas today. Other than depending on the Commissioner to co-ordinate with the relevant government departments and other organizations, we should also invite the public to adopt a more proactive attitude to help him promote the work and discover ways to enhance the charm of Hong Kong.

I was a little upset after hearing Dr the Honourable Raymond HO describe his friend's experience during his visit in Hong Kong. However, the latest statistics show that the prospects of tourism in Hong Kong are really not that bad. Since July of this year, the number of tourists coming to Hong Kong has started to bounce back. To attract more visitors to Hong Kong, we must see clearly where the source of most of our future visitors is. Statistics show that most of the tourists come from our neighbouring areas. Among all tourists who came to Hong Kong in 1997, 22% were from mainland China, 17% from Taiwan, and 13% respectively from Japan as well as Southeast Asia. Because of the geographic proximity, it will be easier for us to develop new sources of tourists in our neighbouring areas. Since the Government of the Hong Kong Special Administrative Region increased the quota for entry of mainland visitors, there has been a substantial increase in the number of these visitors. In July this year, tourists from the Mainland numbered at 252 000, showing a 30% increase over the average monthly number in the past year. The consumption power of mainland tourists is by no means inferior to that of the Japanese, European or American visitors. Calculating from the average figure of this year, we can expect them to bring in an average of $17 billion per year, showing that other than Japan and Southeast Asia, the Mainland is also a fundamental market for tourism in Hong Kong, awaiting our active exploration.

Having said that, Madam President, I recall that once while I was touring Dunhuang in the Mainland, I came across an antithetical couplet at the door of a restaurant which read, "Never mind whether the moon is full or not, do come; No matter whether you are happy or not, do eat." If Hong Kong can achieve what the couplet says, making the tourists greatly enjoy their stay here and attracting them to Hong Kong under all circumstances, then the tourism industry here will certainly flourish and prosper.

Thank you, Madam President.

PRESIDENT (in Cantonese): Dr TANG Siu-tong.

DR TANG SIU-TONG (in Cantonese): Madam President, I think Hong Kong is very famous for its food. The cuisine of any country can be found here. I believe that "food" is one of the linchpins of our tourism industry.

Tourism has always been the main source of foreign exchange income for Hong Kong and hence the restoration of its former glory is a very important topic. Mr David CHU and other Members have put forward many concrete suggestions on how to revive our tourism. I agree to most of them. What I wish to talk about is the service quality of the local tourism industry, that is, the software or the people as Mr LEE Cheuk-yan has put it earlier.

After the financial turmoil, most countries and places in Asia have devaluated their currencies. Thanks to the linked exchange rate system, although the Hong Kong dollar has also been affected by the currency fluctuations, it is still on the high side. As revealed by a survey conducted in Japan, the present living index of Hong Kong tops the whole world. Of course, the high value of the Hong Kong dollar and soaring prices of consumer goods is one major reason why the local tourism is sagging and many have formed the view that our prices have to be adjusted appropriately. Nevertheless, I really doubt whether our tourism industry has to go the direction of low prices.

As we all know, Japan is one of the most expensive places in Asia but large numbers of tourists flock there every year. Switzerland is also a very expensive place to visit and yet it never runs out of tourists. This indicates that being expensive is not a problem, but we must make people feel that they get value for their money. For example, it costs well over $100 to have a cup of coffee and a piece of cake in a hotel, but many people still like to go there. Is it because the coffee or cake of a hotel is especially good? The answer is no. I believe everyone knows that it is the atmosphere, the service quality and also the service manner of the hotel that win people's favour.

When someone sells a $10 commodity at a low price of $5, does it imply that we also have to follow suit in order to be competitive? Even if we are willing to sell it for $5, but do we continue to follow suit if the other party cuts the price again? There is after all a bottomline for such cut-throat competition and it is absolutely not suitable for Hong Kong where land is so very expensive. Therefore, to revive its tourism, in my opinion, Hong Kong must follow the example of Switzerland and Japan by raising its overall service quality rather than tackle the problem by lowering prices.

Many have said that the tourism industry sags as a result of the Government's inappropriate stimulation. I wonder if it has ever come to Members' minds that the long-standing service manner of Hong Kong people is one of the reasons why our tourism industry has declined so much. I believe that everyone has heard reports about the impoliteness of Hong Kong people to tourists, poor service manner of waiters, overcharging by taxi drivers, shops deliberately raising their prices and some even cheat tourists with counterfeits or substandard commodities. I have also come across shopkeepers treating me indifferently, not thanking me when I paid the bill and treating me extremely rudely when I returned a faulty product and asked for a change. Have friends in the service industry seriously thought about or reflected upon such problems?

Madam President, I am not asking the attendants to give the guests a deep bow as soon as they enter, or to dance attendance on them like a toady. To be a good attendant, it is imperative to always put the customers' interests first and treat them sincerely and carefully, and only then will the customers feel at home. At the peak of our tourism industry during the '50s and '60s, such a service attitude could be found everywhere in the tourist areas in Hong Kong. But what is the manner of most people in this industry like now? I think everyone has an idea. The Hong Kong Tourist Association had a slogan before which says, "Wear a smile, you will make the world more wonderful", but now many in the service industry in Hong Kong would be reluctant to give customers a smile. How would we be able to win the heart of tourists this way?

The development of more tourist spots, enhancement of the publicity on Hong Kong and also the construction of large-scale theme parks are no doubt good ways to revive the local tourism industry. But I think what is more important is to improve our service attitude. This costs the least and is also the most cost-effective. As "Quality service is the way to win", every one in the service industry of Hong Kong should carefully ponder over the implication of this slogan, improve his manner, provide services of even better quality and treat every visitor to Hong Kong seriously, making sure that their needs and demands are satisfied.

"Give the tourists good services and the tourists will feel good; when the economy grows and Hong Kong will grow even more." I hope that this is not only the heart-felt aspiration of every one in the service industry but every one in Hong Kong will also keep this as a motto and always bear it in mind. I also hope to encourage one another with these words.

With these remarks, Madam President, I support Mr David CHU's motion and Mr Howard YOUNG's amendment.

PRESIDENT (in Cantonese): Mr Ambrose CHEUNG.

MR AMBROSE CHEUNG (in Cantonese): Madam President, as regards today's subject, I would like to concentrate on two points. The first is the consensus about the long-term policy on tourism and the second is an effective monitoring and communication mechanism.

In the eight years between 1989 and 1996, our tourism industry saw a steady annual growth but this myth was broken in 1996. Many people rather optimistically think that we are merely experiencing a short-term downturn. I also hope that it is a short-term downturn but many studies and experts have pointed out that we must look at this issue from a long-term point of view, as the structure of the whole industry has basically changed.

The Chief Executive has set a niche for us in the policy address that he hopes to make Hong Kong the tourist centre of Asia. But how are we going to attain this goal? I would like to focus on two points. First, the tourism sector should reach a consensus across the sector on a long-term policy. There is a need for the Government, various bodies and people from various sectors to come together to discuss this consensus from different aspects and to implement it. Why is it necessary to have a new consensus on the policy? The main reason is that the whole sector has undergone a transformation. In the past, for example, our tourism industry used to set its eyes on the international community, hoping to attract more international visitors and those who stay for a relatively longer time. Now, statistics have shown that the whole market has shifted the target to China and mainland visitors have ranked first in terms of their number. Southeast Asian countries such as Taiwan, Japan and other countries in the area are also our major markets. Experts have told us that the whole market is shifting towards short-term visitors, and they hope that we can attract more Southeast Asian visitors to Hong Kong for a short tour and that Hong Kong will become their favourite spot for a holiday. As regards the internal market, our main target is mainland visitors.

If this is really the general trend of our market, then we have to study their consumption pattern. What exactly is their consumption pattern? Everyone knows, and many colleagues have mentioned that, among these 60% are tourists, 26% come on business and 7% come to visit relatives and 50% of their expenses are on shopping, 30% on accommodation and 12% to 13% on food. Having known their consumption pattern and set the mainland visitors and the mainland market as our main target, then we can set out to look at what software, what hardware and what facilities, that is, whether international or local facilities, that they need. We can also decide in what direction can we develop the tourist attractions, consider what programmes to be held and what services to be provided for these visitors. If we do not have a long-term strategy to determine the market, how can our short-term or long-term measures be consistent with it? Therefore, I have to stress that this is very important. I feel that all in the sector should discuss it together and come up with a consensus before they can plan for the future.

Let me cite another example. Miss Christine LOH has mentioned the Study on the Kowloon Southeast Reclamation conducted by the Planning Department. The study involves an extensive reclamation which will create about 580 hectares of land on which 320 000 people will be housed and a Central Metropolitan Park built. Many opine that the Government does not need to reclaim such a vast piece of the sea and it should just reclaim enough land for the extension of the transport network linking the north, south, east and west parts of Kowloon. Besides environmental reasons, some also suggest that it is a very good spot for the development of Kai Tak Airport and the Harbour for the use by yachting clubs and for windsurfing. From this we can see that all these entail the co-ordination in planning and other various aspects.

From this I go on to my second point. I think that the Government is obligated to set up a monitoring and communication mechanism for all the relevant bodies. Many Members have also pointed out earlier that at present, the Economic Services Bureau is in charge of entry matters, the Trade and Industry Bureau is in charge of exit matters, the Hong Kong Tourist Association implements the policies, the Airport Authority monitors the aviation matters, the Transport Bureau manages the Airport Railway, and then the catering and retail industries are regulated by some other departments. When so many different departments taking the charge of so many different matters, the Government is best at conducting reviews. From the review on the district structure, we see that they are very capable of the co-ordination work. I think that it should also review whether a policy bureau should be charged with the co-ordination of all these matters. The appointment of a Commissioner for Tourism is only a starting point. Rather, I am more inclined to think that it is not so important to have the co-ordination work done within the Government. It is imperative that the Commissioner has the necessary experience in tourism and only then can he take up the co-ordination work of the Government. Therefore, I hope that the appointment of the Commissioner is only a starting point and he should not come under the Economic Services Bureau in the long run. I believe that the establishment of a new tourism bureau is the ultimate solution.

Thank you, Madam President.

PRESIDENT (in Cantonese): Miss CHAN Yuen-han.

MISS CHAN YUEN-HAN (in Cantonese): Madam President, having heard that many comments, I have some mixed feelings. It was Mr David CHU who moved this motion originally, not me. I have these mixed feelings because when all Members in this Chamber show great concern over the future development of this economic stronghold of ours, we have only one government official here, a representative from the Economic Services Bureau. In fact, we have discussed many things today.

I agree to the views of most colleagues. I am a member of the Hong Kong Department Stores and Commercial Staff General Union and its members are also related to tourism. I have been working with trade unions for 30 years now, that is, I have been involved with the retail industry for 30 years, and we can see the close relationship between the two industries. During the '70s and '80s, we never worried that we would run out of customers. No matter how difficult the stores complained that their operation was, tourists kept streaming into Hong Kong, that is, no matter how difficult they said their operation was, their business still bloomed. All along, the salespersons in the tourist sector have been the top in the retail industry. Their salaries and benefits have been the best in the whole retail industry. However, the groups of people who recently sought my help in finding a job are exactly those who used to work in Tsim Sha Tsui. Why are the salespersons working in the tourist areas suffering such a setback? It is all because of the economic downturn that these high-paid salespersons were sacked.

There are remote and immediate causes for such a situation. As for the remote cause, the decline of the whole tourism industry did not appear just recently, or after the outbreak of the Asian financial turmoil. For instance, several big department stores closed down one after the other some time ago, among which was Chung Kiu Chinese Product Emporium that had been very popular among tourists. The Chinese people in the United States and Canada all knew about Chung Kiu in Hong Kong. Foreign visitors also learned about Chung Kiu and the tourist sector also know that Chung Kiu is very much favoured by foreign visitors. But now, the two Chung Kiu stores situated in Tsim Sha Tsui and Waterloo Road have long disappeared. Why is it so? It is because although Hong Kong was renowned as the "Shoppers' Paradise" and "gourmet capital", its overall economic structure has undergone great changes in the past 10-odd years, giving rise to many problems. The first to bear the brunt was the tourist sector. I believe that the real estate industry is the culprit that has brought about the decline of the tourism industry. Because of it, Hong Kong is no longer the shoppers' paradise. Although it is less expensive for Japanese tourists to buy designer products in Hong Kong than in their home country, still it is indeed quite expensive to shop in Hong Kong comparing with other places. The retail stores in the tourist areas have changed their stocks and the commodities they sell are no longer cheap now. They cannot help it. In the face of high rents, how can they afford to keep their prices down?

Dr the Honourable TANG Siu-tong has complained about the service manner of workers in this sector. I would like to tell him that their manner is actually very good and they know that it is wonderful to wear a smile. In fact, many salespersons often receive awards from the Hong Kong Tourist Association. They really want to smile but when the employers are forced to reduce their salaries on account of the high rent, can they still have the mood to smile? This software problem is caused by many remote causes.

Why has the retail industry suffered the worst setback in this financial turmoil or recession? Now my partner and I, who are involved with the retail and catering industries, are dealing with layoff cases every day — it is not that the two of us have been laid-off. (Laughter) Why is it so? It is because these two industries that were blooming before have now declined greatly.

In the past, Hong Kong attracted tourists because of our gourmets and inexpensive goods. We also had an exceptional advantage, our proximity to China, making us the "South Gateway" to the motherland. The Honourable Ambrose CHEUNG was right about this point. What do the European and American visitors want to see in Hong Kong? They would first go to Lok Ma Chau for a look at Shenzhen from there and spend a few days in Hong Kong shopping. Under the Chinese policy in the past, many had to go to China via Hong Kong. Moreover, because of the lack of the "three through" between Taiwan and China, many had to come to Hong Kong first before they could go into the Mainland.

Our tourism industry flourished during the '70s and '80s. At that time, government officials needed not do anything and they even thought that they had no need for the Hong Kong Tourist Association. Now, this golden era is gone. If our officials only continue to dwell on their thoughts that they need not do anything, they are gravely wrong. I very much agree with colleagues who have spoken just now that the problems about the tourism industry are emerging. Big problems will arise if the Government continues to turn a blind eye to it, lacks a sense of crisis and does not come up with concrete measures to revive the industry.

I would like to cite another example. Mr CHEUNG and Miss Christine LOH have talked about this problem before and I would like to speak on it too. After the airport was moved recently, many people had hoped to make use of the old airport site to restructure tourism or restructure a certain development in Hong Kong. Nevertheless, we were all shocked when we saw the Government's blueprint for the development of this area — a large piece of the harbour is to be reclaimed which will not only deprive Hong Kong of one special feature but will also house over 300 000 people there for no reason. Actually, there is a temple in the middle of the sea, an ancient village in Cha Kwo Ling and there is also Lei Yue Mun. Along the Kowloon Bay and Kwun Tong, there are also many beautiful bays. The Legislative Council has invited many different organizations to discuss this issue and they have come up with many ideas which are totally different from the proposal of the Government. This indicates that although Mr TUNG Chee-hwa has talked about the importance of tourism, the government officials do not seem to be able to switch their thinking. Therefore, I very much hope that the Government will really attach importance to this issue. They cannot just behave like today that only the Secretary for Economic Services is present here. Let us take a look. Many from the Hong Kong Tourist Association are here in the public gallery. I just feel that this is a big irony. Although Mr TUNG Chee-hwa has emphasized the importance of tourism in his policy address, I hope that the Government will take concrete measures to restore and develop tourism in Hong Kong. Thank you, Madam President.

PRESIDENT (in Cantonese): Mr Eric LI.

MR ERIC LI (in Cantonese): Madam President, that the tourism industry of Hong Kong can flourish for several decades is basically attributable to our favourable objective environment. We have to recognize that our transformation from the shopper' paradise to the gourmet centre and even the gateway to mainland China did not just come about as a result of the efforts of the tourism industry alone. Rather, it is the objective situation, coupled with natural developments such as the commercial development, and lastly with the efforts of the tourism industry, that has allowed us to make the best out of this opportunity.

After the reunification, the local tourism industry has found itself in a most difficult unprecedented situation. The speeches of some colleagues have touched a few chords in me. The Honourable Miss CHAN Yuen-han has mentioned about the Chung Kiu Chinese Products Emporium Limited. I very much agree to her conclusion. Perhaps she does not know that I was the liquidator of Chung Kiu (Laughter). Perhaps I did not give any trouble to the trade union; and shareholders were very successful at that time. They closed down the company with a smiling face, without encountering much difficulty. However, I believe that the difficulties encountered by other department stores are like what Miss CHAN has described. Moreover, the Honourable TAM Yiu-chung said that to improve the tourism industry, people in the sector have to undergo retraining. He has put it in a very mild way because I think the people may even need re-education. To break through this predicament and to go further ahead, the tourist sector must have new ideas, new attitudes and even be psychologically prepared for a reform.

In the short run, some difficulties such as a reduction in tourist spending as a result of the financial turmoil are unavoidable. Besides, the soaring prices pushed the strong Hong Kong dollar have also deterred visitors from visiting Hong Kong. Some difficulties however are absolutely surmountable. Difficulties like the attitude of those in the sector who only have an eye on quick and big successes and instant benefits, the decline of the service quality and our unfavourable image left on tourists can all be overcome.

The Chief Executive has already outlined a grand plan for the industry in his policy address, including particularly the appointment of a Commissioner for Tourism and the commitment within the government framework to providing full support. Yet, the scope of the Commissioner's work does not seem to be well defined. Many Members have discussed the role of the Commissioner in various perspectives today. This is somewhat worrying. Some in the tourism sector have also expressed their worries about who would assure the office of the Commissioner and what his work would be. Besides, we have yet to find out what effects he would have on tourism. I truly hope that this official will not get a post that gives him no power, no authority and nothing but paper work to do. Today, many colleagues have offered many suggestions for the Government's reference which I hope will help to give this post a definite and effective role.

Being a commercial community, Hong Kong has actually put enormous resources into tourism. Members have also clearly pointed out that it is a problem about the lack of softwares, including a unique cultural dimension and people with the necessary knowledge. I believe that those who have participated in the development of tourism will also agree that not everyone in the industry does have broad foresight. Quite on the contrary, there are short-sighted people with their eyes set on only quick success and immediate benefits.

In dealing with this problem, first of all, we have to attach importance to the effects of tourism on the overall economic system and at the same time, we need to take into account the co-ordination with other trades and also the application of the concept of sustainable development. Factors such as environmental protection, air pollution and also sanitation of the toilets all have a determining effect on the success of our tourism industry.

Second, how do we rectify the sector's attitude of pursuing quick success and immediate benefits? As tourism is a long-term service industry, if we take the problem seriously, we even have to consider giving the visitors a pledge of performance and guarantee that their complaints will receive proper attention. When malpractices are found, should we consider taking certain punitive measures? If we take it as a long-term service industry, we need to look squarely at these problems.

Third, I am somewhat worried that policy-makers would often lay more emphasis on the work that can be easily seen and fall victims to the usual mentality of pursuing grandiose and great success. It is learnt that the Government seems to be planning on the construction of grand buildings such as an opera house, to which I do not totally object. However, I am somewhat worried that, if the Government sets its eyes only on the commercial return, whether it will take a comprehensive view on the overall cultural dimension of Hong Kong. We have already had plenty performance venues now. What are they used for? Are they used for the development of the unique culture of Hong Kong? It does not exactly seem to be the case. At present, most of the performance venues seem to have been occupied by commercial singers and for other purposes. If more such buildings are constructed, how much will they help to promote the unique local culture? Without other supplementary policies and vigorous promotion, I do not see how the construction of this kind of buildings will promote the local culture. To think that the construction of such buildings will attract more tourists to Hong Kong is, in my opinion, impractical.

Fourth, people now have much more chances to going on tours and hence tourists now demand more sophisticated attractions than before. In the past, most of the visitors were led by tour guides to Hong Kong and they would be quite satisfied with just a visit to the Ocean Park and the chance to buy some souvenirs. I think that this touring mode will gradually be phased out. We should sponsor the compilation of self-help tour guides providing information on tourist attractions and transportation.

Lastly, as regards upgrading the service quality, we have a very close relationship with the Mainland and even Macau. I hope that the Government will realize that "when one succeeds, the others will succeed; but when one is ruined, the others will also be ruined" and will therefore spare no efforts and resources to help our neighbouring areas to improve their service quality as well, so that they will be on a par with Hong Kong. I believe that this investment will bring good returns to Hong Kong.

To revive the tourism is more than the sector's own business. It concerns all people in Hong Kong. I hope that the Government will provide support and assistance to this sector. Every one of us are striving for the long-term competitiveness of Hong Kong rather than merely the immediate short-term publicity measures and approaches.

PRESIDENT (in Cantonese): Mrs Sophie LEUNG.

MRS SOPHIE LEUNG (in Cantonese): Madam President, I did not intend to speak originally but when I saw Members speaking so enthusiastically about how to bring out the uniqueness of Hong Kong, I also wanted to join in the discussion. Nevertheless, the Deputy President frowned when he saw me raise my hand as it was already very late (Laughter), so I will try to be brief.

Having heard colleagues' speeches, I also agree that Hong Kong is still a beautiful and dynamic place. Just ask the young people what place that they want to be the citizen of or what citizens they want to tell other people that they are, they will certainly tell you that they are Hong Kong citizens. So I think we should do something for them. We need to understand what special features that Hong Kong has. Hong Kong is a tiny place, but it has everything. It has a beautiful harbour, though somewhat polluted now. Many still think that Hong Kong is a place of miracle, a place with rich local colours and at the same time a world-renowned international city. If you ask me what is required of the future Commissioner for Tourism, I think that he must have a broad vision and be very clear about the special features of Hong Kong. Only then can he enhance the work in all related aspects.

It is a pity that we have to discuss how to promote the tourism industry here today. In fact, we can observe that in the last 10 to 20 years, Hong Kong has not done very much to support tourism or many other industries and has even unintentionally (not purposely) done damages to it. For example, many colleagues have pointed out that we have little sense of environmental protection. Our air is not fresh and our harbour is filthy. I remember that over 10 years ago, a friend of mine who was very good at sailing told me that whenever he wanted to go to a certain port to have seafood there, he could just hop on his boat and sail there. Does he still dare to do so now? I do not believe he does. Just as Miss Christine LOH has said, he might have to discard his boat after a trip in the sea. The environment of this city is indeed badly polluted and we must make more efforts to clean it up. However, as the Honourable WONG Yung-kan has said, there are still activities on the sea. They have not completely disappeared. Some of our pelagic fish have gradually come back to our harbour and we still have some seasonal fish such as the cuttlefish mentioned earlier but unfortunately, the Ma Wan yellow croaker which are rarely seen in the world have disappeared. Our red seabream — do any of us know how the name of Chak Lap Kok came up? — have totally disappeared from our waters for some time but because the seabed is flatter now, some of these fish have come back. I have seen some weighing five or even 10 catties. They are all very beautiful and should be well preserved. Actually, we should make it known to more people so that tourism can develop from this area. At present, there are a few hundred species of coral growing in Deep Bay. We ought to consider drawing up some laws to provide maximum protection to our coastline and marine life. I think that we should consider it very carefully and then implement it expeditiously.

In addition, we have also neglected the unique features of Hong Kong which abounded before but now there is only Tai O left. Shek O was also one of the special features in Hong Kong but I do not know what it has turned into now. The villages in Sai Kung are also very beautiful before but the Government has totally neglected them in its comprehensive zone planning and development. A case in point is Ma Wan. Moreover, the Government of the Hong Kong Special Administrative Region has mentioned about making Hong Kong a design and fashion centre. Actually, we do have the resources and know-how for this. It is only a question of how we are going to put them together to make something out of them. This is what we should consider. Whatever, we must not let the tourists think that Temple Street and Mido Cafe are the only tourist attractions that Hong Kong can offer. Of course, these are places of great interest and Members should also visit them.

I would also like to talk about the theme park mentioned by Mr Howard YOUNG. Of course, I also understand the worries of Miss Christine LOH but we cannot only consider whether we are in such a position to do so. We should urge ourselves on to attain the required conditions. We cannot just close ourselves out from the outside world. Everyone knows that there should be one more big international theme park in the Southeast Asian region but if we do not strive for the right to build it and let other countries get it, by that time, as the Honourable Mrs Selina CHOW said, there is no use crying as once the opportunity is missed, it will never come back. We have to observe our environment carefully. Also, I would like to say that we want to attract more visitors not only for their money but also in the hope that they will bring their culture to Hong Kong and at the same time absorb our culture. We do not just have an eye on the money. Neither do we hope to treat anyone who freely spends money here as a tourist. This is not right. What we should consider is whether Hong Kong can be like other big cities in attracting first-class visitors from all over the world.

Many colleagues have talked about our negative images and suggested how we can open up the channels to listen more to others' opinions. I think what is more important, however, is that we have to pay more attention to showing our care and positive attitude towards others. Mr Howard YOUNG may not know that over 10 years ago, Cathay Pacific Airways was the first international airline that got the chance to work with the United Nations Children's Fund to run an activity called "Change for Good" — sorry, Madam President, I do not know the Chinese name of the activity — and it became a pioneering undertaking highly commended by the world's tourism sector.

Thank you, Madam President.

MISS EMILY LAU (in Cantonese): Madam President, I speak to echo Mrs Sophie LEUNG's speech. I do not want to hold Members up but I do support Mr David CHU's motion and Mr Howard YOUNG's amendment.

Madam President, I would like to talk about the attraction of Hong Kong to tourists, particularly before the change of sovereignty. Many tourists came to Hong Kong during that time. Why? I have heard some people say that they wanted to come to have a look at Hong Kong why in this place where almost all its population was Chinese was ruled by the British. This was the special and unique point of it. Also, at that time when China was about to resume sovereignty of Hong Kong, they heard some Hong Kong people say that they were scared, some saying that they wanted to leave. All that gave people a special impression and that was why people from thousands of miles away also wanted to come and see. Therefore, I agree with Mr TAM Yiu-chung, he was right on this point ─ I do not want to offend the Hong Kong Tourist Association and I know that it has done a lot; and tonight its representatives have to stay up so late here only to listen to our discussion on this and I wonder if they have had their dinner yet ─ that our success then was due to this historic juncture that so many visitors were attracted here. But as soon as the sovereignty was transferred, it was no big deal. Hong Kong became just another city of China. Also, that was our tough luck that our Government kept telling people everywhere that it was "business as usual" in Hong Kong. When business is as usual, what attraction do we have to the visitors? A city is a city. What is so fascinating about it? Therefore, we will have to make our special features stand out to let foreigners see that Hong Kong is such a special place that they must not miss. Hong Kong was a British colony in the past which is in itself very special, as many people would wonder why a few million Chinese people were ruled by a handful of British people.

I feel that the implementation of "one country, two systems" in Hong Kong now is unique in itself and the leadership of our country also has repeatedly told others that this is "one of a kind" and hence we have to promote it to others. In fact, it would be wonderful if we can attract more visitors to come here also when they tour mainland China. As their destination is China, we will of course let them go. There are a great many tourist attractions to visit in China with the rich cultural relics and spectacular scenery, something Hong Kong is no match for. However, although Hong Kong is one of the many cities of China, it is a unique place. We have to let those who have been to China know that they have even more reasons to come to have a look here because they will find that there are also some very special places in China and there are things which are unique to Hong Kong that they cannot find anywhere else in China.

Nevertheless, Madam President, I believe that to say so would have broken a political taboo and some people would never want to put it that way. But this mainly depends on how we package it. It is totally a matter of packaging. If we can then convey a message to foreigners again that Hong Kong is still a very special place which they cannot afford to miss and there are still many things here that they cannot see anywhere else, people will be attracted here. In fact, where else on earth can they see the implementation of "one country, two systems"? But of course, Macau will follow suit later. But Macau is beyond comparison. Therefore, it all depends on how Mr KWAN or the Tourist Association package the message to attract visitors here. I think that a very important message to the world now is that Hong Kong is part of China. But the tourists will think that if they want to go to China, they would choose Beijing or Shanghai instead of Hong Kong. The thing is that we are different here. Madam President, of course we have to let visitors see what exactly our uniqueness is when they come here; otherwise they will think that they are cheated. This is also a trial for our very well-paid senior officials. They must think of ways to leave an impression on the tourists who come to see Hong Kong that "one country, two systems" is so fascinating that they must introduce Hong Kong to their friends and relatives, that although Hong Kong is part of China under the "one country, two systems" policy, it is very different from other Chinese cities and that everyone has to stop over in Hong Kong to have a look en route to China. Since we want the visitors to do that, we have to look for ways to introduce to the tourists those very features unique to Hong Kong which cannot be found in other Chinese cities, make them realize the differences and even help them see the privileges that the Chinese leadership has given Hong Kong so that its people can enjoy a high degree of autonomy.

Madam President, this is a concept that is also very important. Coming to Hong Kong, one would naturally be expected to indulge in eating, drinking and merry making. But how do we attract the foreigners from 8 000, 6 000 or 4 000 miles away to come here or even bring along their families here on holiday? I believe that this is a big challenge to us for since the British withdrew from this territory, Hong Kong has lost its appeal. Some would ask what Hong Kong is and that is the point, I believe, we have to ponder. To attract visitors, we must have something worth visiting and seeing to offer. I just want to point out, Madam President, that places of historic interest and cultural relics are very important. When we go sight-seeing in a foreign country, we also want to see the historic and cultural relics there. Actually, Hong Kong does not lack these things and I believe somethings that foreign visitors particularly wish to see are those related to the British colonial rule. These things are still very fascinating to them. Therefore, someone has mentioned earlier that things such as the former Government House should be listed as a must on the list of tourist attractions. Other than the former Government House, places of special interests also include old temples and ancestral halls in the New Territories. I believe that the Government should help renovate them so that even on a day tour in Hong Kong, tourists will still be able to visit a few of these fascinating places. This is something that we can do. But mostly importantly, it is a question of how to arouse their interest in coming to Hong Kong and to make them feel that although it is part of China, they must still come to Hong Kong in addition to visiting the various places in mainland China.

Lastly, I would like to comment on the appointment of the Commissioner for Tourism. I agree with Mr David CHU that we have to broaden our view and not to limit it to the consideration of civil servants only. We should consider persons outside the Government too. I hope that the Government has the courage to do so. Actually, the Government has also employ some people on contract terms from outside the Government to fill certain posts. I believe that this Council will very much support the Government to do so.

Thank you, Madam President.

PRESIDENT (in Cantonese): Mr Edward HO.

MR EDWARD HO (in Cantonese): Madam President, I was thinking that the Honourable Miss Emily LAU must wish to be the last speaker. (Laughter) But since she has given such a lively speech — I always admire Miss LAU's speeches — since she has spoken so well, I cannot help but speak a few words too.

First of all, I was glad to hear Miss Emily LAU say that "one country, two systems" was such a wonderful thing and "one country, two systems" was genuinely implemented in Hong Kong, making it unique, different from mainland China. She affirmed that Hong Kong still had human rights and freedom, also a difference between it and mainland China. I think that this is a very important message, especially when it from Miss Emily LAU. I hope that when Miss LAU and other Members of the democratic camp pay visits abroad, they will also tell people more about this, that the implementation of "one country, two systems" is successful in Hong Kong. This is very important. (Laughter)

Secondly, I also greatly appreciate Miss LAU's earlier comment about the need to preserve the historic and cultural relics in Hong Kong. I also wanted to speak on this issue today but since I already made my points in December, I do not intend to repeat now. Yet, I still think that it is very important, as Hong Kong does have its very own culture. Hong Kong has a history of 6 000 years. Miss Emily LAU is entirely right that Hong Kong still has many historic buildings and cultural relics, some of which have been preserved but others have not been so fortunate. Nevertheless, we can still find many historic relics in Hong Kong. I think that the Government has provided too few resources and too weak a will to preserve those historic and cultural relics that we should cherish greatly. As regards tourism, actually, tourists come to Hong Kong not just to see the modern buildings with curtain walls; they also want to see the unique culture of Hong Kong. As the Honourable Mrs Sophie LEUNG has said, Hong Kong also has its own special features as we are not totally antique, and neither are we 100% modern. Our East-meets-West taste is exactly where our charm is.

The Government has done little to preserve the private property, especially the people's houses. For example, the Government has preserved this government-owned Legislative Council Building for the use of the Legislative Council but the Government is unwilling to spend money on the preservation of private property since to resume the property requires money. Actually, the Government can consider other alternatives. Take Singapore as an example: When its government wants to preserve a certain historic building, it needs not resume the property or land; rather it compensates the owner with a piece of land with the same plot ratio and equal development potential in the neighbourhood. This is one of the ways and in fact there are many other alternatives that we can consider.

I feel that another problem concerns the need to have some key spots in Hong Kong. Lan Kwai Fong is a case in point but it is created totally by the private sector. Frankly speaking, if we solely depend on the Government, we would never be able to create places like Lan Kwai Fong. In fact, the Government is not capable of doing it. I think that the Government should encourage the people to create more such tourist spots. Take the waterfront of Hong Kong as an example: there are many places wasted. Some places can be used for cargo loading and unloading areas. For the waterfront promenade in Tsim Sha Tsui East, however, it seems that it is only used for jogging or taking a walk with a date. But we can consider the practice of foreign countries and set up some outdoor cafes or shops of various specialties there, providing a place for the people to take a walk, appreciate the scenery or have a rest. There they can also appreciate the Victoria Harbour that has diminished but not quite disappeared yet. The Government should give all these suggestions some consideration. So in addition to re-discovering the many attractions of Hong Kong, we can also enhance its charm.

Thank you, Madam President.

PRESIDENT (in Cantonese): Miss Cyd HO.

MISS CYD HO (in Cantonese): Madam President, I think Miss Emily LAU was trying to say that in such a unique place as Hong Kong, it was a big melting pot for many cultures, at least it was a meeting point for Chinese and Western cultures. Of course we hope that Hong Kong would continue to enjoy human rights, democracy and the rule of law. But we are worried that these will gradually vanish and our city will become just another city in China. After seeing the beauties of China's historical and cultural treasures, the tourists will have no interest to come to Hong Kong and see things which are only replications. Tourists from the Mainland would also ask, "Why is that Hong Kong is not so westernized and it is not much different from my hometown?" I have some friends who came here to visit. Besides shopping, they would like to have a look in this modern city which has become a part of China. They would like to see how westernized and how modern it is. But if they find out that the city is not much different from Shanghai and Beijing, they would return home very disappointed.

I hope Hong Kong can preserve its own cultural outlook and I do not wish the Government to put up our weaknesses as selling points. Hong Kong's own culture is not limited to its historical artifacts and relics. We hope that when tourists come to Hong Kong, they would have a feeling for it, knowing that it is a place where East meets West and it is different from any other Chinese city. I do not want to see us using things like rickshaws and men wearing pigtails as selling points. As the Honourable Edward HO has said, the Government should make use of some places such as the promenade of the Tsim Sha Tsui East or the Kowloon West reclamation and make plans on developing one of the sites into a new centre of culture and to provide more entertainment facilities there, so that Hong Kong can become a regional centre for entertainment services as stated in the policy address. All these merit our consideration.

However, I hope the development in this respect can reflect modern living in Hong Kong and we should not just pretend that we have some historical relics unearthed. Otherwise, it can only kill the smile on our face. Even if we wear a smile, it will only be a false one. Just imagine how are we going to wear a set of ancient costumes today and squeeze a false smile on our face. In fact, the tourism industry has a lot to do with cultural exchange. I hope we can observe with a modern perspective and do not waste our resources on things which are not our specialties.

Thank you, Madam President.

PRESIDENT (in Cantonese): Mr Kenneth TING.

MR KENNETH TING (in Cantonese): Madam President, I originally did not intend to speak. But seeing that Miss Emily LAU has spoken with such a keen interest in the topic, I too wish to say something. I think what Miss Emily LAU has said can actually show a unique characteristic of Hong Kong, something we should all be proud of: if only we can do something all with one heart, we will surely succeed.

A very long time ago, when I studied at a university in the United States, I heard that the coastline of Chicago was really very magnificent. So, I decided that I should have a look at it myself, even though this would mean a straight drive of 120 miles. But when I got there, I saw only a straight, monotonous stretch of coastline, which cannot in any way compare with the liveliness of our hilly coastline. Thus, we can see that Hong Kong really does have its own appeal. Well, before 1997, it might be true that many people wanted to come here for a visit because they feared that Hong Kong as the world knew it would simply vanish and become another mainland city. However, as Miss Emily LAU has rightly put it, when tourists come to Hong Kong these days, they will find out that the opposite is the case, and "one country, two systems" has after all proven itself to be a workable concept in the context of Hong Kong. Is this not something very delightful?

What is more, Honourable Members can still speak as freely as ever before. That is why we should really work much harder and much more positively to serve the community. I support the views expressed by some Honourable Members on the attitude and behaviour of those workers serving tourists. I believe that as long as we can all work with one heart, we will certainly achieve our objectives. Thank you.

PRESIDENT (in Cantonese): I now invite Mr David CHU to speak on Mr Howard YOUNG's amendment. Mr David CHU, you have up to five minutes to speak.

MR DAVID CHU (in Cantonese): Madam President, the amendment moved by Mr Howard YOUNG and my own motion are actually meant to achieve the same objective. The only thing is that his amendment has enriched our debate today in terms of scope and contents. I do not think that he has moved his amendment just for the sake of moving an amendment. So, I too will not oppose his amendment just for the sake of opposition. (Laughter) I support his amendment.

Thank you, Madam President.

PRESIDENT (in Cantonese): Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, I wish to thank the Honourable David CHU, the Honourable Howard YOUNG and other Honourable Members who have spoken so enthusiastically to put forward their valuable opinions. The Government certainly understands the significance of the tourism industry to our economy and employment market. Like Honourable Members, the Government is extremely concerned about the development and long-term competitiveness of this industry.

Like other economies in the region, Hong Kong has also experienced a downturn in its tourism industry over the past year or so. Fortunately, however, our tourism industry has started to show signs of a recovery since the second half of this year. Between July and September this year, a total of 2.4 million tourists visited Hong Kong, with an increase of 9.8% over that of the same period last year. Besides, the overall occupancy rate of our hotels has also risen from 67% in January this year to 75% in September. All this shows that the efforts made by the tourism sector, the Hong Kong Tourist Association (HKTA) and the Government over the past year have not been in vain. But we must note that the number of tourists visiting many of our neighbouring places is still on the decline, which is why we must remind ourselves that we will need to redouble our efforts, not least because there is plenty more to be done.

In order to promote our tourism industry, we will work closely with the tourism sector and the HKTA. Specifically, we will draw up a three-pronged strategy comprising both long-term and short-term measures, so as to:

1. promote and advertise Hong Kong as a good tourist destination;

2. enhance the appeal of Hong Kong as a tourist destination; and

3. further facilitate the entry and exit of tourists.

Although Hong Kong is still the second most popular tourist destination in Asia (excluding the Mainland), we must, as Honourable Members have rightly put it, continue to make strong promotion efforts to maintain our position. The need for such strong promotion efforts is especially obvious after the reunification, as Honourable Members have also pointed out. We must seek to enhance the image of Hong Kong internationally, so as to remove all the misunderstandings about us in overseas tourist markets.

In May this year, the HKTA launched a worldwide, first-of-its-kind promotion campaign entitled "Hong Kong ─ a City of Life". Costing $173 million, this campaign aims to project a fresh image of Hong Kong after the reunification, with emphasis laid on the compactness, varieties and dynamism of its attractions for tourists. It is hoped that this campaign will arouse tourists' interest in Hong Kong again. According to the findings of some recent surveys conducted by the HKTA in some overseas tourist markets, there are signs that the ranking of Hong Kong as a tourist destination has started to climb. This is indeed very encouraging. Moreover, since the reunification in July 1997, the HKTA has also made arrangements for more than 7 000 media and tourism representatives from our major tourist markets to visit Hong Kong, and it has also distributed 500 000 information leaflets overseas to promote the new Hong Kong after the reunification. In the coming year, the HKTA will continue to conduct similar publicity and promotion work.

As Honourable Members have pointed out, the Mainland is now our biggest source of tourists. The Government has therefore decided to allocate funds to the HKTA for the purpose of expanding its office in Beijing and establishing a new one in Shanghai, so as to enhance our marketing efforts in the Mainland.

We will also seek to enhance our co-operation with mainland tourist authorities. We will, on the one hand, advertise Hong Kong as both an indispensable and unique tourist spot for tourists heading for China. On the other hand, we will draw on the abundance of scenic spots in the Mainland as a means of attracting more tourists to Hong Kong, in the hope that Hong Kong and the Mainland can complement each other's inadequacies. In the area of joint promotion efforts overseas, the HKTA has already established good working relations with some major tourist cities in the Mainland, such as Xian and Guilin. We have also reached a consensus with the Guangdong Provincial Government on a series of joint tourist promotion efforts, and we will also enhance our promotion work in the Pearl River Delta.

But promotion efforts, however well-conceived, must be backed up by competitive prices. In this connection, Honourable Members, I am sure, can all notice that over the past year, the tourism sector has been making strenuous efforts to attract tourists by cutting their prices and improving their quality of services. I think the approach of the sector is correct.

If we are to enhance the appeal of Hong Kong, we must make sure that we can always offer our visitors experiences of a diversified nature. We can make enhancement in this respect in terms of software and hardware. In terms of software, the HKTA will continue to develop and promote new tourist products and re-package existing tourist spots. Some Honourable Members have referred to Lan Kwai Fong, but this tourist attraction has been in existence for quite a long time, and we really need to have some new attractions. For this reason, the HKTA is now planning, for example, to re-package Shelley Street in Central and some specific areas in Kowloon City as Themed Dining Districts next year. And, it will also launch a self-help tour programme called "Bird-Fish-Flower" Leisure Experience.

Many foreign tourists are quite fascinated by historical relics, and some Honourable Members have referred to this a moment ago. I agree with Honourable Members that despite its small size, Hong Kong is rich in historical relics and many of these are characterized by a blending of Occidental and Oriental tastes. That is why the HKTA is now trying to make the best use of our precious historical relics and heritage as a means of promoting the tourism industry. Early this year, the HKTA designed and implemented a self-help tour scheme called Heritage and Architecture Tour for Central District; a similar scheme will shortly be implemented for Kowloon. Besides, in the coming one or two months, the HKTA will also set up a Heritage Tourism Task Force for the purpose of formulating individual measures and overall strategies to promote heritage tourism.

Another focus of our work is events tourism ─ the promotion of Hong Kong as the "Events Capital of Asia". In order to achieve this aim, the HKTA has recently launched a scheme entitled Spotlight Hong Kong ─ Towards the Millennium. Under this scheme, support has been given to a whole series of large-scale international events, such as the Hong Kong - Asian MUSICFEST 1997, the Takarazuka Revue Hong Kong Performances, an opera entitled Joseph and the Amazing Technicolour Dreamcoat and, more recently, the "Egyptian Treasures from the British Museum" Exhibition and the "Heavenly Creations ─ Gems of Ancient Chinese Inventions" Exhibition.

In order to further our work in this direction, the Government has recently extended a loan of $100 million to the HKTA for the purpose of setting up an International Events Fund. Over the next five years, the Fund will provide financial assistance to various different organizers of international events. So far, there have been five successful applications for which loans totalling at over $5 million have been granted, and the projects concerned will be launched next year. It is planned that over the next five years, the Fund will be able to provide financial assistance to 50 international events.

In order to provide the venues required for the staging of these international events, we have rented the former Tamar site on short-term tenancy terms to the HKTA for a period up to mid-2000. With this, it will be able to hold cultural and recreational events and other tourism-related activities there.

But in the long run, we will need a venue suitable for the holding of world-class events. In this connection, we are planning to construct a state-of-the-art performance venue on the West Kowloon Reclamation. To sum up, we hope to ensure that at all times, our visitors are always able to enjoy or even participate in the various interesting international events held in Hong Kong.

With a view to further increasing the attractiveness of Hong Kong, we have also done our best to upgrade the hardware support for the tourism industry . In 1996, the Government set up a $50 million Tourism Development Fund to finance the HKTA in its feasibility studies on the creation of new tourist attractions and facilities. The possibilities being studied now include a water-sports centre, resort-type hotels, a world-class wetland park and so on. Recently, the HKTA has completed the Tsing Yi - Ma Wan Film City and Associated Tourism Development Study, in which it is recommended that a large-scale theme park should be established in Ma Wan. The Government thinks that this is quite a good recommendation, and interested private developers are welcome to submit detailed proposals for the consideration of the Government. We are right now studying a report recently completed by the HKTA on the construction of an ocean-liner terminal and hopes to give our feedback in the near future.

Besides, the Government has decided to accord priority consideration to the construction of a scenic cable car link between Tung Chung and the Ngon Ping Buddha Stature on Lantau Island. The Mass Transit Railway Corporation is now conducting the relevant studies and will draw up a plan for implementation. In addition, the Government will also conduct studies on the need or otherwise for more convention and exhibition venues.

Many Honourable Members have given their valuable opinions on the construction of world-class theme parks in Hong Kong. As pointed out by the Secretary for Economic Services, Mr Stephen IP, in this Council last week, the Government in fact very much welcomes any proposals which can boost the development of our tourism industry, and proposals on world-class theme parks are of course included. And, whenever we know of any quality project proposals which can boost the tourism industry of Hong Kong, we will certainly do our utmost to have them implemented on the best possible terms and conditions. Actually, Hong Kong possesses many strengths which make it the best site for theme parks in the region. What we should have in mind should be the interests of Hong Kong as a whole, and, for this reason, we need not restrict our attention to any particular theme parks. But, anyway, I do not think that it is appropriate for us to comment on any individual projects at this stage.

There is also a need for us to improve and develop infrastructure facilities and equipment related to the tourism industry, so as to give added convenience to tourists. The HKTA has already installed 100 Interactive Computer Information Kiosks for Visitors (Touristinfo Power Phones) at popular tourists spots, and I think some Honourable Members may have tried them already. The Government will also allocate $2.5 million to the HKTA for the purpose of conducting a pilot scheme to improve direction signs for tourists in Stanley next year. Moreover, the Government has in principle agreed to finance a pilot scheme on improving our tourist spots. This pilot scheme will commence in Central and Western District in 1999 with the aim of improving the tourist facilities and scenic spots there.

In order to encourage the people to support the development of the tourism industry, and, more importantly, in order to improve and enhance the quality of our tourist services, the HKTA launched a publicity campaign called "Be a Good Host" earlier this year, with a view to raising the awareness of the public in this particular respect; this publicity campaign will continue to be carried out vigorously next year. At the same time, the HKTA is right now drawing up a quality tourist services scheme entitled "Total Tourist Care" which is directed at retail outlets and eating establishments. This scheme is expected to be implemented next year. It is hoped that our tourist services can thus be significantly improved to give our tourists the feeling of "a home away from home".

Like Honourable Members, the Government also attaches very great importance to our environmental cleanliness. At the end of June this year, a large-scale campaign entitled "Healthy Life ─ Towards the New Millennium" was launched, and so far more than 50 events have been held under the name of this campaign. Besides, the Urban Services Department and the Regional Services Department have also made a lot of efforts to maintain the cleanliness in the streets and public toilets located at tourist areas, some examples being the stepping up of enforcement actions, installation of more litter bins and improvements to the management of public toilets.

The work of facilitating the entry and exit of tourists is also very important. At present, Hong Kong is already a place where tourists can enter and exit very conveniently; people from more than 170 countries and places can enjoy visa-free access to Hong Kong, and the Immigration Department is also making continuous efforts to streamline and relax the entry and exit formalities applicable to our visitors. Besides, since July this year, the quota for mainland residents visiting Hong Kong on "Hong Kong Tours" has also been increased by 30%. We will keep working in this direction, and, in conjunction with the relevant Mainland authorities, we are right now looking at the 72-hour "speed' visa arrangements for foreign members of package tours entering Shenzhen from Hong Kong, so as to see whether it is possible to extend such arrangements to Zhuhai. In addition, we are also studying the possibility of increasing the number of travel agencies authorized to organize such "speed" visa package tours. We will continue to review our immigration requirements and arrangements, with a view to facilitating tourists' entry and exit.

Following the inauguration of the new Hong Kong International Airport, we are now able to handle a far greater number of flights than before. Some local airlines have even increased their flights destined for the Netherlands, Singapore, Taiwan and the Mainland. Others have also opened a new route to Istanbul in Turkey. Since the reunification, we have signed 12 new aviation agreements, and the number of such agreements signed thus goes up to 33. We will keep up our efforts in this direction in the time to come, so as to enlarge the aviation networks of Hong Kong.

In order to promote the development of the tourism industry, the Government has been providing immense financial support to the HKTA. In 1998-99, the amount of subsidy granted to the HKTA is about $574 million, which is 20% more than the subsidy granted in the previous year. Of this, about $500 million is for meeting the HKTA's recurrent expenditure.

The Government knows that it has to improve our overall business environment, so as to relieve the plight experienced by the tourism sector. That is why on 1 April this year, a number of tax cuts were introduced. The Hotel Accommodation Tax was reduced from 5% to 3%; the boarding charge at ferry terminals was reduced from $25 to $18; the hotel registration fee and the entry visa fee were both frozen; and, the Air Passenger Departure Tax was reduced from $100 to $50 when the new airport opened.

With a view to promoting the development of our tourism industry, the Chief Executive has decided to appoint a Commissioner for Tourism with sole responsibility for boosting the industry. In this regard, I am very grateful to Honourable Members for their valuable opinions. We will draw up the details regarding the duties and requirements for the post as quickly as possible and submit them to the Establishment Subcommittee of the Legislative Council for its scrutiny. The Government will also see to it that the Commissioner will be given the resources required to execute his or her duties.

Honourable Members are rightly concerned about the choice regarding the appointee, and I understand that all those involved do want the Government to appoint the most suitable person to perform the very important duties of the post. The Government has therefore decided to conduct an open recruitment exercise in which civil servants and those who are not are both welcome to apply. We will release the relevant details as soon as the Legislative Council endorses our manpower establishment proposal and request for funding.

Conclusion

The Government is determined to make Hong Kong a tourist centre and to facilitate the development of the tourism industry. We will continue to render our full support to the development of the industry. And, we are prepared to join hands with the tourism sector and the HKTA in meeting the challenges ahead. Thank you, Madam President.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the amendment moved by Mr Howard YOUNG be made to Mr David CHU's motion. Will those in favour please raise their hands.

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections and by the Election Committee, who are present. I declared the amendment passed.

PRESIDENT (in Cantonese): Mr David CHU, you may now reply. You have up to four minutes and 14 seconds.

MR DAVID CHU (in Cantonese): Madam President, I have moved this motion with the aim of enabling Honourable Members to put forward their proposals on revitalizing our tourism industry because this industry is extremely important to Hong Kong. Through this motion debate, we have imparted a very clear message: We all attach great importance to the tourism industry, and the revitalization of this industry is fully supported by the whole of Hong Kong. We also want to tell investors of tourism all over the world that the tourism industry of Hong Kong is full of enormous potentials. Therefore, international investors should find it worthwhile to offer concessions and preferential conditions and invest in this superb place called Hong Kong.

Thank you, Madam President.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the amendment moved by Mr Howard YOUNG be made to Mr David CHU's motion.

Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT(in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections and by the Election Committee, who are present. I declare the amended motion passed.

NEXT MEETING

PRESIDENT (in Cantonese): I now adjourn the Council until 2.30 pm on Wednesday, 18 November 1998.

Adjourned accordingly at four minutes to Ten o'clock.

Annex I

WRITTEN ANSWER

Written answer by the Secretary for Economic Services to Mr James TIEN's supplementary question to Question 3

The average "unused" time of airbridges during the main operating period between 6.00 am and 12.00 midnight is 24%. This is an average over the period and includes the unavoidable time gaps between the departure of an aircraft and the arrival of the next aircraft.

Annex II

WRITTEN ANSWER

Written answer by the Secretary for Economic Services to Mr James TO's supplementary question to Question 3

On average about four flights a week choose to use remote stands while frontal stands could be made available, all for operational reasons.

Annex III

WRITTEN ANSWER

Translation of written answer by the Secretary for Transport to Mr Fred LI's supplementary question to Question 5

According to calculations made by the Government Property Agency and the Architectural Services Department, passageways for physically handicapped persons are still not available in 23 government buildings. The Architectural Services Department has, since last September, launched a programme to provide those 23 government buildings with such passageways. The programme is expected to be completed in July 1999.

Annex IV

WRITTEN ANSWER

Translation of written answer by the Secretary for Transport to Mr HO Sai-chu's supplementary question to Question 5

At present, there are approximately 2 250 and 13 800 pedestrian crossings with and without dropped kerbs respectively throughout the territory.

With limited resources, the Government can only carry out improvement works gradually. Our present policy is to accord priority to providing dropped kerbs at newly constructed pedestrian crossings, then to providing the same in conjunction with regular maintenance and re-construction works for existing roads. Besides, based on public opinion, the Government will also provide dropped kerbs specially at crossings frequently used by the disabled. Given the amount of resources at present, the Government can handle about 500 crossings annually. The Transport Bureau has asked the Transport Department to conduct a review on the streamlining of work procedures and administrative arrangements with regard to the provision of dropped kerbs with a view to improving the efficiency of handling such works.

Annex V

WRITTEN ANSWER

Translation of written answer by the Secretary for Transport to Mr LAW Chi-kwong's supplementary question to Question 5

According to information provided by the Government Property Agency, the number of private properties now rented by the Government stands at 99, 40 of which are not provided with passageways for physically handicapped persons because they had been built before the code of design practice came into effect.

The Government Property Agency has made it a policy that when looking for private properties for use as new offices for the Government, properties without passageways for physically handicapped persons will not be considered.

Annex VI

WRITTEN ANSWER

Written answer by the Secretary for Education and Manpower to Miss Cyd HO's supplementary question to Question 6

Of the 1 766 cases (with sick leave over three days) settled between January 1997 and October 1998, 447 cases involved permanent loss of part of the earning capacity and no case involved permanent loss of full earning capacity. Of these, 278 cases (or 62%) involved 1% or less permanent loss of earning capacity. Only eight cases (or 1.8%) involved between more than 5% to 10% permanent loss of earning capacity. A breakdown of these cases is at Appendix.

Appendix
Permanent Loss of Earning Capacity of Occupational Injury Cases Reported and Settled from January 1997 to October 1998 by Hospitals under the Hospital Authority
	Number of cases
Percentage of permanent loss of earning capacity	1997	1998 (January - October)	Total number of cases
> 0-1	194	84	278
>1-3	100	36	136
>3-5	18	7	25
>5-10	6	2	8
Sub-total	318	129	447
Number of cases without permanent loss of earning capacity	714	605	1 319
Total	1 032	734	1 766
Notes:
Of the 1 319 cases without permanent loss of earning capacity, 42 (3.18%) were assessed by the Employees' Compensation Assessment Board with zero percentage loss of earning capacity, and 1 277 (96.8%) were settled without having to be assessed by the Assessment Board.

Annex VII

WRITTEN ANSWER

Written answer by the Secretary for Education and Manpower to Mr Michael HO's supplementary question to Question 6

On the basis of the best available information, we have compiled at Appendix a summary of the occupational injury rate of the Hospital Authority and selected overseas hospitals. I must stress that the figures are not directly comparable because we have little information on how overseas hospital authorities capture the injury reports, and define days lost and the coverage of medical personnel which form the basis of calculating the injury rate. Also, the years of comparison are not identical.

Appendix
Occupational Injury Rate of the Hong Kong Hospital Authority Hospitals and Hospitals of Selected Countries
Health Service	Year*	Occupational Injury Rate (per 100 employees)	Remarks
Hospital Authority, Hong Kong	1997	2.9	Injuries with more than three days' sick leave.
Hospitals, Australia	1992-93	2.9# 3.2@	All injuries and diseases resulting in over four days' sick leave, permanent disability or death.
Hospitals, United States	1996	2.7	Injuries and illnesses resulting in working days lost or death.
WRITTEN ANSWER ─ Continued
Health Service	Year*	Occupational Injury Rate (per 100 employees)	Remarks
Medical and other health services, and veterinary services, United Kingdom	1993-94	0.67	Fatal injuries, non-fatal major injuries and injuries with over three days' sick leave.

Note:

# The rate is in respect of all hospitals except psychiatric hospitals.

@ The rate is in respect of psychiatric hospitals only.

* The years of comparison are not identical, given the lack of updated information on the situation in the overseas countries concerned.