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.

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

THE HONOURABLE FRED LI WAH-MING

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

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 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 CHIN-SHEK, J.P.

THE HONOURABLE LAU KONG-WAH

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

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

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

THE HONOURABLE CHOY SO-YUK

THE HONOURABLE ANDREW CHENG KAR-FOO

THE HONOURABLE SZETO WAH

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:

THE HONOURABLE JAMES TO KUN-SUN

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

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

PUBLIC OFFICERS ATTENDING:

THE HONOURABLE MRS ANSON CHAN, J.P.
THE CHIEF SECRETARY FOR ADMINISTRATION

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

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

MR MICHAEL SUEN MING-YEUNG, J.P.
SECRETARY FOR CONSTITUTIONAL AFFAIRS

MR GORDON SIU KWING-CHUE, J.P.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS

MR NICHOLAS NG WING-FUI, J.P.
SECRETARY FOR TRANSPORT

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

MR JOSEPH WONG WING-PING, G.B.S., J.P.
SECRETARY FOR EDUCATION AND MANPOWER

MR STEPHEN IP SHU-KWAN, J.P.
SECRETARY FOR ECONOMIC SERVICES

MR LEO KWAN WING-WAH, J.P.
SECRETARY FOR HOME AFFAIRS

CLERKS IN ATTENDANCE:

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

MR LAW KAM-SANG, J.P., DEPUTY SECRETARY GENERAL

MS PAULINE NG MAN-WAH, 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.
Probation of Offenders (Approved Institution) (Consolidation) (Amendment) Order 1999	25/99
Travel Industry Compensation Fund (Procedure for Ex Gratia Payments) (Amendment) Rules 1999	26/99
Employees Retraining Ordinance (Amendment of Schedule 2) Notice 1999	27/99
Tax Reserve Certificates (Rate of Interest) Notice 1999	28/99
Mental Health (Amendment) Ordinance 1997 (81 of 1997) (Commencement) Notice 1999	29/99
Mental Health (Specification of Special Treatment) Notice 1998 (Cap. 136 sub. leg.) (Commencement) Notice 1999	30/99
Mental Health Review Tribunal (Amendment) Rules 1998 (L.N. 100 of 1998) (Commencement) Notice 1999	31/99
Mental Health (Guardianship) (Amendment) Regulation 1998 (L.N. 99 of 1998) (Commencement) Notice 1999	32/99
Mental Health Guardianship Board Rules (Cap. 136 sub. leg.) (Commencement) Notice 1999	33/99

Sessional Papers

No. 87	─	Li Po Chun Charitable Trust Fund Annual Report for the period 1 September 1997 to 31 August 1998
No. 88	─	Hong Kong Arts Development Council Annual Report 1 April 1997 - 31 March 1998
No. 89	─	The Hong Kong Academy for Performing Arts Annual Report 1997-1998
No. 90	─	The Hong Kong Academy for Performing Arts - Financial Statements and Auditor's Report for the year ended 30 June 1998

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 12 to 15 minutes. When asking supplementary questions, Members should be as concise as possible. They should not ask more than one question, and should not make statements. To do so would contravene Rule 26 of the Rules of Procedure.

After I have called upon a Member to ask a main question, other Members who wish to ask supplementary questions to this question need, in addition to raising their hands, indicate the wish by pressing the "Request-to-speak" buttons in front of their seats.

On the other hand, if a Member wishes to follow up and seek elucidation on an answer, or raise a point or order, please stand up to so indicate and wait for me to call before speaking.

PRESIDENT (in Cantonese): I now invite the Honourable HO Sai-chu to ask the first question.

Promotion of Football

1. MR HO SAI-CHU (in Cantonese): Madam President, regarding the promotion of football in Hong Kong, will the Government inform this Council:

(a) whether it knows if the relevant authorities allocate funds annually to sponsor football in Hong Kong; if so, how the funds compare with those allocated to other sports; whether the Government has assessed if the funds allocated for football are adequate; and

(b) of the specific plans to raise the football standard in Hong Kong, and whether such plans include grooming local talented football players and providing sufficient pitches for football training and matches?

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President,

(a) The Hong Kong Sports Development Board (SDB) is the statutory body responsible for disbursing the Government's direct subvention for sports development. It gives an annual subvention to the Hong Kong Football Association (HKFA) which is the governing body for the sport locally.

The amounts of subvention allocated to the sports associations are decided upon by the SDB having regard to the overall level of funds at its disposal and the competing demands of the various associations. The Government does not make assessments on the amounts allocated to these associations.

Between the financial years 1996-97 and 1998-99, the HKFA received a total of $12.96 million in recurrent subvention from the SDB. In the same period the following amounts were received by associations representing other major sports:

	$ million
badminton	10.41
swimming	9.64
windsurfing	8.7
squash	8.39
table tennis	8.31
basketball	6.65
tennis	5.85
cycling	5.51
rugby	2.73
hockey	2.53
volleyball	2.15

(b) As regards specific plans to raise the standard of football in Hong Kong, this is essentially a matter for the HKFA, the governing body of the sport. It is not the Government's policy to intervene in the running of the autonomous sports governing bodies. However, were the HKFA or any other body to put forward specific requests or proposals aimed at enhancing the standard of sport in Hong Kong, we would be glad to consider these in consultation with the SDB and other relevant bodies. In this context, I understand that the SDB has asked the HKFA to prepare a plan for the development of football, to allow the Board to assess how it might assist the Association in this task.

In respect of the provision of football pitches, public pitches are built by the Provisional Municipal Councils in accordance with current planning standards. There are at present 52 public grass pitches and 11 artificial turf pitches throughout Hong Kong run by the two Councils. The planning or construction of a further 11 grass pitches and four artificial turf pitches is currently underway.

(Note: The third paragraph of part (a) of the reply has subsequently been amended. The details are set out in the letter at Appendix A.)

MR HO SAI-CHU (in Cantonese): Madam President, for a long time in the past, Hong Kong was reputed to be the "football kingdom of Asia" but now it has degenerated into such a state, which is highly regrettable. In the last paragraph of part (b) of the main reply, the Government has mentioned the planning criteria and supply of football pitches. Will the Secretary tell us in greater details whether pitches are provided to football clubs specifically for conducting training programmes? Or will the Government consider converting the vacant turves and hard surface grounds of the Kai Tak Airport into temporary football pitches for young people to make the best use of the site and play football there?

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President, the dozens of football pitches are presently all managed by the two Provisional Municipal Councils. As far as I know, none of these football pitches is set aside especially for the use of certain football clubs. Concerning the suggestion put forward by the Honourable Member, I can follow it up with the two Councils and see if they will consider it. As to the utilization of the Kai Tak Airport site, I am happy discuss with the departments concerned and examine if part of the area can be used as a temporary football pitch.

DR YEUNG SUM (in Cantonese): Madam President, I have been given to understand that the Hong Kong Sports Institute (HKSI) has ceased to organize football training courses, which will have a serious impact on the grooming of local football talents. Since the Government is so concerned about the development of football, will the Government re-examine this issue together with the authorities concerned?

SECRETARY FOR HOME AFFAIRS (in Cantonese): I believe that Dr YEUNG Sum is asking about the Focus Sports. Although football is not currently a Focus Sport selected by the HKSI, that does not mean that the HKSI does not provide any assistance to it. Other than annual recurrent funding, there are also preferential arrangements in regard to the venues, such as football clubs can enjoy a 50% reduction in rental and the Hong Kong National Football Team can even use the pitches free. As for football training, I understand that the HKFA used to work with the HKSI on certain joint football training programmes. As regards whether they will continue with such co-operation, I believe it is a matter of co-ordination and discussion between the two bodies.

DR YEUNG SUM (in Cantonese): Madam President, the Secretary has not answered my question direct. I was asked whether the Government will re-examine together with the relevant authorities the provision of football training courses by the HKSI.

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President, I have also mentioned in the main reply that it is essentially a matter for the HKFA with respect to the training of players and raising of the football standard in Hong Kong. If the HKFA has any plans which need the assistance of the Government or the HKSI, we are always prepared to discuss with them. We also understand that the SDB has requested the HKFA to prepare a development plan to facilitate the SDB's evaluation of how the SDB can help the development of the sport.

MR KENNETH TING (in Cantonese): Madam President, there have been incidents in recent years involving individual football players accepting brides for arrangement of "match fixing" in Hong Kong, bringing the local football sport into disrepute. Will the Government inform this Council whether, while promoting the development of football, it also pays attention to nurturing the football players' personal integrity and professional conduct?

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President, with such incidents in this sport, I believe the Government, the general public and also Members have been disheartened to see some very promising football players make such unwise acts. I understand that the HKFA is also very much concerned about this and will adopt appropriate arrangements and training to prevent to the best of their ability such incidents from recurring. I know that the Independent Commission Against Corruption is also very concerned about this. We all wish to see none of these disappointing incidents happening again in future.

MR CHEUNG MAN-KWONG (in Cantonese): Madam President, football is very popular in Hong Kong. Recently, in some football matches in Asia, the Hong Kong National Team has lost in one match 0 to 5 and another 0 to 6. In two matches, it has lost a total of 11 scores. Some members of the Hong Kong National Team have been involved in "match fixing" in some international matches. These have all disappointed and brought shame to many local football fans who are at the same time disheartened. Will the Government tell us how it can enhance football training in schools to raise the students' standard, such as building more pitches close to the schools, systematically grooming the techniques and skills of local players, and also encouraging all young people to play football honestly, so as not to let football fans down again, so much so that they are now reluctant to go to the Hong Kong Stadium to watch local matches but watch the European matches transmitted by the television instead?

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President, like Mr CHEUNG, I have been very disappointed with our results in the recent international matches. We know that the HKFA has worked very hard in this regard and gone to great lengths either in the training of players or in the employment of coaches, in the hope of promoting the sport and improving Hong Kong's results in the international matches. But the result is still very disappointing. I believe everyone knows what have happened, such as changing of coaches. I hope that the HKFA, the SDB as well as the Government will bring this favourite sport of many further ahead.

MR CHEUNG MAN-KWONG (in Cantonese): Madam President, the Secretary has not told us how to promote this sport in high gear in school in order to enhance our young people's football standard, which is very important. If the Government only responds to this question in such a perfunctory manner, the standard of the sport in Hong Kong will not improve even in 20 years.

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President, I have also said just now that we hope that the HKFA, as the governing body of the sport, can put forward some suggestions to the SDB and the Government to see how we can all work together, giving our best, to bring this sport forward. As regards the pitches, I have also said that we already have a few dozen pitches and the construction of more is also on stream. We hope to gradually strike a balance between supply and the demand.

MR AMBROSE CHEUNG (in Cantonese): Madam President, the Government has not shown its disappointment with the local football sport in the main reply. It has all the while been very passive and said that the HKFA is welcome to put forward recommendations. May I ask whether the Government will take the initiative to discuss with the HKFA any plans that can enhance the standard of the sport locally? The Government has also mentioned that the SDB has asked the HKFA to prepare a development plan but failed to provide any information to this Council. Does the Government know whether the HKFA has made any proposal to the SDB and what the SDB's response is? What is the Government's involvement in this?

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President, actually we have kept in close contact with the HKFA. As a matter of fact, we held a meeting with them yesterday. The most important point is ...... everyone has to understand that the HKFA, as a governing body, must take the initiative and lead in this matter. The SDB has asked the HKFA to prepare a plan in this respect and I believe the HKFA will study it thoroughly. For the time being, we have yet to receive any proposals from the HKFA. When we receive any proposals from them, we will definitely study them together with the HKFA and the SDB on how to promote this sport.

MR NG LEUNG-SING (in Cantonese): Madam President, it has been mentioned in the last paragraph of the main reply that there are at present 52 public grass pitches and 11 artificial turf pitches in Hong Kong and the planning of a further 11 grass pitches and four artificial turf ones is currently underway. I have seen the protest outside the Legislative Council Building demanding for venues for gymnastics. Since football is not listed as a Focus Sport of the HKSI, it will not be given a very high priority ─ that of course does not mean that we do not need this sport. May I ask the Government, when designing or planning on the construction of football pitches, will it also consider accommodating facilities of other recreational and sport activities that are in urgent demand in these pitches?

PRESIDENT (in Cantonese): Mr NG, this question is about football. Although you have skilfully linked your supplementary question to the theme of the main question, it is still not directly relevant to the main question. In this circumstance, if the Secretary for Home Affairs has such information on hand, he can answer it now.

SECRETARY FOR HOME AFFAIRS (in Cantonese): Madam President, both football and gymnastics are sports. (Laughter) Sometimes football pitches can be used for other purposes. But technically, it will involve certain difficulties to accommodate gymnastic equipment in a football pitch.

PRESIDENT (in Cantonese): Members, as this Council has spent more than 15 minutes on this question, we will now go on to the second question.

Members of District Councils

2. DR YEUNG SUM (in Cantonese): Madam President, will the Government inform this Council whether it knows the countries or territories, other than the Hong Kong Special Administrative Region (SAR), the district councils of which have members appointed by the government; and the countries or districts the district councils of which have all their members returned by elections?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, because of the constraints on time and resources, we are unable to gather comprehensive information of district councils of all countries and territories. We have obtained information on some of the European, American and Asian countries and territories mainly through the Internet and other available publications.

From the information we collected, we note that district councils outside Hong Kong could be roughly divided into two types: one with real political power and the other mainly advisory in nature. The majority of district councils belong to the former. We have gathered only limited information on the district councils of other countries and territories which are mainly advisory in nature. However, from what we have gathered from the Internet, we have identified at least the following examples:

(a) The first example is the Community Boards of New York City, the United States. There are altogether 59 Community Boards and each of them comprise up to 50 members, all appointed by the Borough President in the respective borough. The Boards play an advisory role in zoning and other land-use issues, in community planning, in the co-ordination of municipal services. They also help to resolve residents' service delivery problems. Their functions are similar to those of the district boards in Hong Kong.

(b) The second example is the Provincial Advisory Council of Taiwan. Subsequent to the streamlining of the provincial government in Taiwan last year, a new provincial advisory council was established. It plays mainly an advisory role and members are all appointed by the Government.

DR YEUNG SUM (in Cantonese): Madam President, we have obtained the following information only by a staff member of the Democratic Party. In regard to this issue, the Democratic Party has written to the consulates and embassies of various countries to find out about the nature and composition of the district councils of various countries and territories. In the replies of the 17 countries that responded, most of them told us their district council members were returned by one-person-one-vote elections. These countries include the United Kingdom, the United States, France and Germany, and also India, Japan and New Zealand. The district boards of Hong Kong abolished the appointed seats back in 1994. Why are appointed seats being re-introduced now, contrary to the democratic development of the rest of the world?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, I have already said in the main reply that the district councils of most places have real political power, and as Dr YEUNG Sum has said, their members are of course returned by one-person-one-vote elections. There are the few examples of district councils we found on the Internet that are purely advisory in nature and whose members are all appointed by their administration. Therefore, Hong Kong is not the odd place out that has appointed members to such councils. Other places also have such a situation though there are only very few such places.

Dr YEUNG Sum has questioned whether this is a great retrogression in democracy. In respect to that we have to look at the unique situation of Hong Kong. With the "one country, two systems" in place, Hong Kong is one of its kind in the whole world. Moreover, everyone knows that during the consultation we gathered diverse rather than one-sided views; some are in favour of and some against the issue of appointed seats. Whether it is indeed "a great retrogression in democracy", we can look at the real situation. In the past district boards were constituted of constituencies, each of which had a population of 17 000. In the last District Board Elections in 1995, there were 346 seats. In the District Council Election proposed to be held late this year, the constituencies will basically have a population of 17 000, that is, the criterion will remain the same. But owing to the growth in population, the number of seats will increase, rather than decrease, from 346 to 390. Therefore, the appointed seats are only a supplement which will not affect the number of directly elected seats. I must reiterate that the number of directly elected seats will increase.

MR GARY CHENG (in Cantonese): Madam President, according to the information provided by the Government earlier, district councils can be divided into two types. But is there a causal relationship between their composition and their nature? That is, according to the information that the Government has on hand, is it that councils with real political power are necessarily returned by election while those being principally advisory in nature are necessarily comprised of appointed members?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, as I have said, our information on hand is not comprehensive. As Dr YEUNG Sum has said, we obtained such information from certain sources. According to the information available to us, the relationship between the composition and the nature of the two types of councils are just as described by Mr CHENG, that is, members of those with real political power are mostly returned by one-person-one-vote elections while members of those being advisory in nature are mostly appointed.

MR MARTIN LEE (in Cantonese): Madam President, will the Government inform this Council in the entire 20th century, whether there are any countries or territories, other than our SAR, the district councils of which revert to the introduction of appointed seats after a spell of having all members returned by election, and the number of appointed seats increases as compared with the last term ─ I repeat, increases, not decreases?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, there is not much information we have obtained, nor do we have much understanding about certain matters. But from the face of it, in the second example that I have cited, that is, the Province of Taiwan, it has also gone through the same process as ours. What we wish to do now was already done in Taiwan last year when it abolished the provincial government. The streamlining of the provincial government is to abolish the province and reduce it from a provincial government to a Provincial Advisory Council. I am not sure if I have mastered and understood the whole picture of their situation, but from the information and the circumferential evidence that we have, it appears to be the case.

PRESIDENT (in Cantonese): Mr LEE, which part of you question needs clarification?

MR MARTIN LEE (in Cantonese): Madam President, I was asking about the whole world but the Secretary has only cited the example of Taiwan. Does it mean that there are no other cases in other parts of the world?

PRESIDENT (in Cantonese): Mr LEE, please sit down first before the Secretary will answer you. (Laughter) Secretary for Constitutional Affairs, do you have anything to add?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, I have already said that our information is neither comprehensive nor adequate. As we only have a limited amount of information, so I dare not answer Members' questions hastily without verifying it. Nevertheless, it seems that this is the only information that we can gather.

MR MARTIN LEE (in Cantonese): Madam President, will the Secretary answer me in writing?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, I think that even if I am to answer the Honourable Member in writing, I would not be able to provide much more information than what I have now. (Laughter) Yet, if I am given more time to do some consultation to verify the one or two cases that I have on hand, I may be able to give a written reply. (Annex I)

MR ERIC LI (in Cantonese): Madam President, those who oppose the system of appointment are worried that the Government will bring someone holding the same stance as the Government's into the advisory framework to side with some political parties. Given that, not only the consultation would lose its meaning, they also worry that these people would become tools in political dealings. Did the Government know, in the course of gathering this information, the criteria for the appointment of members adopted by these governments? Are there any signs showing that more people of political parties closer to the government would be appointed, or the government would attach more importance to professionals with no political background at all?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, I certainly understand Members' interest in this issue, and I share their interest in this matter as well. But the information gathered by us from the Internet did not show much detail. We can write to them to inquire if they have any criteria for appointment. If they reply to us, no matter whether they have any criteria, we will present the information to Members. However, this will take quite some time. If Members would like us to do so, I will write to them making the inquiries. (Annex II)

MR YEUNG YIU-CHUNG (in Cantonese): Madam President, districts boards are advisory bodies for district administration. May I ask the Secretary how, in general, members of advisory bodies are returned? Apart from district boards, are there any other advisory bodies with most of their members returned by election?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, in the advisory framework of the Government, there are many professional committees, totalling at a few hundred, with most of their members appointed. If a committee is established to tap the information or expertise of a certain profession, generally we will lay more emphasis on the candidates' contribution and knowledge in those fields when considering their appointment.

As regards whether there are members of such committees returned by election, there are few such cases that I know of. Certainly they do not account for the majority. Insofar as I can recall, 10 seats of the Hong Kong Arts Development Council are returned by election among the representatives of various sectors.

MR ALBERT HO (in Cantonese): Madam President, may I ask the Secretary whether, from the information that he has or according to his understanding, the places that have appointed council members would deliberately appoint candidates who have lost in the election as council members, hence watering down the effect of "those who have won in the election", just like the case of Hong Kong in 1997?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, to the best of my understanding, which I hope to be correct, the two examples that I cited earlier had all their members appointed instead of partly elected and partly appointed. In Hong Kong, in the proposed District Councils, most members will be returned by election and the number of elected seats will exceed all of those in the past. Therefore, the number of people joining the District Councils by way of election will also exceed all of those in the past. Therefore, in this respect, we cannot consider that a retrogression in democracy. However, ours is a mixed system with members returned both by election and by appointment. To my understanding, the two examples that I cited earlier were composed solely of appointed members, with no elected elements. Given that, I do not believe that the problem raised by Mr Albert HO just now should exist.

MR ALBERT HO (in Cantonese): The Secretary can look at my question from a broader perspective. I hope that the Secretary can give me an answer regarding whether the appointment system would somehow water down the effect of the election. With some members of the district councils being returned by election, will the administration use the appointment system to bring people who have lost in the election into the district councils? This is actually a general question that I hope the Secretary could answer.

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, to my understanding, these councils are all advisory in nature, and there is not a balancing electoral system which makes use of such an advisory framework to counterbalance or set off the effect of election. This is what I understand and that is why I said that there is no such a problem as raised by Mr Albert HO.

MR ANDREW WONG (in Cantonese): Madam President, first of all, I would like to commend my old school-mate, Secretary Michael SUEN, for being so smart as citing two remarkable examples. In the second example, members of the Provincial Council of Taiwan were elected in the past, so was the governor of the province ......

PRESIDENT (in Cantonese): Mr WONG, due to the time constraint of the question time, please come to your supplementary question direct.

MR ANDREW WONG (in Cantonese): It was very obvious that the example was cited for the sake of "eliminating the councils". I do not believe that the Secretary could dig up only these two examples on the Internet. The second example is New York City. Under the mayor and the grand municipal council, there is no municipal government, therefore, there are some councils of an advisory nature ......

PRESIDENT (in Cantonese): Mr WONG, please state your question directly and do not express your personal opinion.

MR ANDREW WONG (in Cantonese): Take Los Angeles as an example, Madam President, may I have your leave to expound it a little?

PRESIDENT (in Cantonese): Mr WONG, if you want to express your opinion, you may propose a motion debate. But this is the question time and under the Rules of Procedure, Members should be as concise as possible when raising questions and refrain from making statements. Please ask your question now.

MR ANDREW WONG (in Cantonese): My question is very simple. Can the Secretary give us all the information that he has obtained from the Internet?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, certainly. But we should not forget that there are two parts to this question; one part is about councils the members of which are elected. I made it very clearly on the outset that as the majority of councils are vested with real political power, their members are returned by one-person-one-vote elections. I have many examples of councils here that have their members returned by this kind of election. I have also said we could not find very many examples of councils that are advisory in nature and have appointed members. From the Internet, I have honestly only found two examples. As to the case of Los Angeles as mentioned by Mr Andrew WONG, we have not seen it. Its council members may have been returned by one-person-one-vote elections, but we have not seen it. Therefore, to show that we are answering the main question, as it concerns whether there are councils the members of which are appointed, we did find that there were such examples but we could only find two, and hence I cited those two. As for others, had we spent more time, we may have found more. However, in the limited time allowed, we could at best find two.

MR ANDREW WONG (in Cantonese): Madam Present, although I said just now I would like to expound my point a little, I only meant to put the supplementary question more clearly. However, even though I explained so clearly, the Secretary still could not give me a satisfactory answer. May I ask the Secretary to give us all the information that he has collected?

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, I have already said that I can. However, most of the information that obtained by us is on councils the members of which are returned by one-person-one-vote elections, and they include those in Australia, Canada, England, France and Japan. I can provide Members with this information. (Annex III)

PRESIDENT (in Cantonese): Members, this Council has spent over 16 minutes on this question. We will now proceed to the third question.

Re-routing of Tseung Kwan O Western Coast Road

3. MISS CHAN YUEN-HAN (in Cantonese): Madam President, instead of constructing Tseung Kwan O Western Coast Road (WCR) along the coastline to connect Tseung Kwan O with East Kowloon as originally proposed, the Administration has recently come up with another proposed route which will run through Lei Yue Mun district. It is learnt that the new proposal will seriously affect the preservation of monuments and development of tourist attractions in Lei Yue Mun. In this connection, will the Government inform this Council of:

(a) the rationale for re-routing the WCR; and

(b) the plan that the Administration has in place for the preservation of the monuments and the development of tourist attractions in the district, such as the long-standing Lei Yue Mun Village, in the next five years?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, I will first answer the question relating to the original route as proposed by the Government.

(a) The Government presented the schematic design of the WCR to the Kwun Tong District Board in June 1997, but that was not a proposed alignment. The Government began to explore possible alignments for the WCR in early 1997 and has studied various possible options. After careful consideration, the Government presented one possible alignment to the Traffic and Transport Committee of both the Kwun Tong Provisional District Board and the Sai Kung Provisional District Board in December 1998. The various options that have been considered could be broadly grouped into the following three categories:

(i) Sea Options ─ they connect Tseung Kwan O and the proposed Yau Tong Bay Bridge by way of marine bridges that go along the waterfront of Lei Yue Mun. These options are not acceptable because they would reduce the width of the marine fairway of Lei Yue Mun Gap by about one-quarter (from 450 m to 350 m). This would adversely affect the very busy marine traffic there. Moreover, the deep water and strong currents around Lei Yue Mun Gap would render construction extremely difficult.

(ii) Tunnel Options ─ they run through the Lei Yue Mun Headland in tunnel and connect to the proposed Yau Tong Bay Bridge. As the tunnel would be 700 m long, Dangerous Goods Vehicles (DGVs) will be banned from using the road, thus defeating one of the main purposes of the WCR. Moreover, tunnel options will also involve the WCR cutting through the same area of the Lei Yue Mun seafood restaurants.

(iii) Inland Options ─ they run on elevated structure above the existing Cha Kwo Ling Road. These options would require resumption of industrial buildings at Yau Tong and also affect housing developments along the road. These options also require heavy cutting into the slope of the Lei Yue Mun Headland. Moreover, building an elevated road above the Cha Kwo Ling Road would create unacceptable noise, air quality and visual impacts on the areas along the alignments.

The recommended option presented to the Kwun Tong Provisional District Board is already the option with least adverse impact, having regard to all constraints on the construction of the WCR.

(b) We fully appreciate the tourism value and importance of the Lei Yue Mun area. This is reflected in our two areas of works: firstly, preserving the heritage within the area; and secondly, developing the tourist potential of the area. According to the records of the Antiquities and Monuments Office, there are three historical buildings and structures in the area:

(i) Batteries on Devil's Peak and its coastal defence facilities;

(ii) Tin Hau Temple in Lei Yue Mun; and

(iii) Tin Hau Temple in Cha Kwo Ling.

Although these historical buildings and structures are not declared monuments under the Antiquities and Monuments Ordinance, the Government would render appropriate protection to these buildings and structures in accordance with the relevant provisions of the Environmental Impact Assessment Ordinance passed last year, should they be affected by large scale public or private developments.

We are exploring ways to improve and develop the tourist facilities in Lei Yue Mun so as to develop the area into a better and more attractive tourist spot. We are now conducting the Study on Village Improvements and Upgrading of Lei Yue Mun Area which will look into, among other things, the tourism development potential of the area. Besides, we are also carrying out a study on improving the various facilities of the district, in the hope that Lei Yue Mun can be developed into a better and more attractive tourist spot. The Planning Department is about to commission the study on Lei Yue Mun Development, and the Hong Kong Museum of Coastal Defence is also being constructed at the Lei Yue Mun Barracks site on Hong Kong Island by the Provisional Urban Council. The museum aims to preserve the antiquities and heritage there as well as to enhance the awareness and interest of the public and visitors on the coastal defence history of Hong Kong and the Lei Yue Mun area. The Hong Kong Tourist Association (HKTA) will continue with its publicity efforts to promote the attraction of Lei Yue Mun as a fishing village, its heritage and cuisine. From a wider perspective, we have set up a Heritage Tourism Task Force to focus on individual initiatives and on a broader strategy for promoting heritage attractions in Hong Kong to visitors.

MISS CHAN YUEN-HAN (in Cantonese): Madam President, it is mentioned in the main reply of the Government that the recommended alignment recently presented to the Kwun Tong Provisional District Board is already the option with least adverse impact. But the recommended alignment will in fact also cut through Lei Yue Mun, which is why Lei Yue Mun as we know it will probably disappear. Then, in part (b) of the main reply, a number of protection measures are mentioned, and reference is even made to the Environmental Impact Assessment Ordinance. What actually is the orientation of the Government anyway, may I ask? If that option ─ the option described as producing the least adverse impact ─ is adopted, Lei Yue Mun will be cut into two halves, and Lei Yue Mun as a monument will disappear forever. May I therefore ask the Government how it is going to preserve Lei Yue Mun?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, as far as our planning is concerned, Lei Yue Mun will exist forever; what is more, it will even be developed into a better tourist spot for both local residents and foreign visitors. Therefore, I can assure Members that Lei Yun Mun will not disappear. The question now actually concerns how we can manage to construct a road without failing to preserve the monuments in the area and to develop the tourist facilities there. Madam President, what we now have is just a blueprint, a tentative alignment. The Kwun Tong Provisional District Board will continue to follow up and discuss this issue at its meeting on 8 February. I am sure that district board members and others who are concerned about the preservation of Lei Yue Mun will certainly continue to follow up this issue. And, when a suitable alignment is worked out in the future, we will still need to study quite a number of issues relating to design and actual construction. However, in the course of design, the Government will always attach central importance to the preservation of the area's attractions and the development of tourist facilities there.

MR EDWARD HO (in Cantonese): Madam President, the Secretary's reply sounds much too abstract and theoretical. As far as this project is concerned, the Secretary has consulted neither the Planning, Lands and Works Panel nor the Transport Panel of this Council. Now that he has already consulted the Kwun Tong Provisional District Board, and there seems to be a finalized scheme already, may I ask the Secretary whether he will consult Members of this Council?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, as I pointed out a moment ago, the Kwun Tong Provisional District Board will discuss this topic at its meeting on 8 February. Actually, this works project has not yet reached the stage of consultation. When the right time comes, and if there is any need to do so, I will bring up this matter in the appropriate panel of this Council.

MR CHAN KWOK-KEUNG (in Cantonese): Madam President, according to the Secretary, the Sea Options will reduce the width of the marine fairway of Lei Yue Mun by about 100 m. But I know that the ships using the Lei Yue Mun fairway nowadays are no longer very big, and we must also note that a width of 350 m is already four times the width of a standard soccer pitch. So, why are the Sea Options not feasible?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, the Lei Yue Mun Gap is used not only by small vessels, and ships of very huge tonnage also sail eastward out of Hong Kong through it. The Government can provide Members with the relevant information if they so desire. But what is of more importance is that besides causing navigational problems, a further reduction of the existing width of the Gap may also give rise to many other problems. Construction works are one example. We may well be talking about reducing just 100 m of the sea surface. But we simply do not know how much work we will have to do underwater before we can provide adequate support for a suspension highway bridge; this will necessitate a lot of studies. And, as a result, we may face a problem of whether or not the Gap will have to be further reduced in width. For these reasons, the Government does not wish to adopt the Sea Options.

PRESIDENT (in Cantonese): Secretary for Economic Services, do you have anything to add?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, with your permission, I would like to add a few words because the Marine Department has given me some information in this respect. According to our latest survey, conducted in August last year, the Lei Yue Mun fairway is indeed extremely busy. Everyday, an average of 800 vessels of various sizes will use the fairway, and during the peak periods, an hourly average of 100 vessels is recorded. Contrary to what Mr CHAN Kwok-keung has said, the vessels we refer to are not all small ones, and many of them are ocean-liners, high-speed passenger ferries and other types of ships. And, any reduction of the width of the Lei Yue Mun Gap will surely be a cause of concern to the Marine Department because the existing width of the Gap is just about 450 m, which is only half the width of the narrowest fairway in Victoria Harbour.

MR FRED LI (in Cantonese): Madam President, we are supposed to be talking about Lei Yue Mun in Kwun Tong. However, in the main reply, the Government also refers to the Provisional Urban Council's Museum of Coastal Defence in Chai Wan. I am therefore very puzzled, and I think a clarification is required. Will the Government make an undertaking that it will consult the residents' organizations and trade organizations in Lei Yue Mun, so as to work out a WCR alignment which is acceptable to all?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, for matters relating to the alignments of the WCR and their impacts on the future development of Lei Yue Mun, the Government will continue to discuss with the Kwun Tong Provisional District Board at its future meetings, and we will also follow up the matter with different organizations. We hope that a scheme acceptable to all can be worked out.

MR WONG YUNG-KAN (in Cantonese): Madam President, I actually want to follow up the supplementary question asked by Mr CHAN Kwok-keung. The Secretary has referred to the impacts on the busy marine traffic at Lei Yue Mun Gap. But what does he mean by large ships?

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, I think Mr WONG's supplementary question is about the kinds of ships which will be affected, a point which I have already mentioned. The latest survey conducted by the Marine Department in August last year shows that many large ocean-liners such as the Star Pisces also use this fairway. The information of the Department shows that sometimes, as many as 100 vessels will sail through the Lei Yue Mun Gap, and besides ocean-liners, the types of vessels include also launches, high-speed passenger ferries, fishing boats and yachts. I believe that with the development of the Tseung Kwan O port, the throughput will certainly increase.

MR HOWARD YOUNG (in Cantonese): Madam President, the Batteries and the two Tin Hau Temples in the vicinity of Lei Yue Mun are listed in the Secretary's main reply as tourist spots. But everyone in the local tourist industry knows that tourists do not go to Lei Yue Mun for these, because most of them actually want to eat the seafood and look at the seafood stalls there. I now have a letter sent by a tourist to a water cruise agency. The tourist says in his letter that what he likes best are the seafood and the seafood stalls in Lei Yue Mun. Hence, may I ask whether the project will include any arrangements to relocate the seafood restaurants and stalls in Lei Yue Mun? Or, will any arrangements be made to enable them to continue their operation as a special attraction of Hong Kong?

PRESIDENT (in Cantonese): Secretaries, which one of you are going to answer this question? Secretary for Economic Services.

SECRETARY FOR ECONOMIC SERVICES (in Cantonese): Madam President, like Mr Howard YOUNG, I very much want to preserve Lei Yue Mun as an attractive tourist spot, too. We would of course do our very best to preserve the characteristics of Lei Yue Mun. And, in the words of the Secretary for Planning, Environment and Lands, Lei Yue Mun will exist forever. Actually, the HKTA has already made a lot of efforts to promote Lei Yue Mun abroad, in particular its cuisine and attractiveness as a fishing village. Since we are talking about the future, we should really adopt a macro perspective and see how the overall attractiveness of Lei Yue Mun can be enhanced. So, in addition to considering the well-known seafood restaurants and seafood there, we are also exploring the possibility of building more tourists facilities in Lei Yue Mun, such as coach bays, landscaped gardens, promenades and so on. But these are all preliminary ideas. Next month, the Planning Department will start a comprehensive study on the future development of Lei Yue Mun in conjunction with the Economic Services Bureau, the HKTA and the Kwun Tong Provisional District Board, or even the Legislative Council. Of course, as pointed out by the Secretary for Planning, Environment and Lands, when it comes to the need or otherwise to relocate any existing seafood restaurants, or when it comes to any longer-term arrangements, much will have to depend on the alignment finally chosen and the number of restaurants and stalls thus affected. As for what we are going to do in the long run...... The building of another village, for example, and things like that...... Well, all this has to be decided in the future. In the meantime, we will study our ideas together with the Planning Department, and the work concerned will be completed at the end of this year. I am sure that more information can be made available to Members then.

PRESIDENT (in Cantonese): This Council has already spent 17 minutes on this question. We will now proceed to the fourth question.

MTRC Cutting Back on Operating Costs

4. MR ANDREW CHENG (in Cantonese): Madam President, with regard to the series of measures implemented by the Mass Transit Railway Corporation (MTRC), which aim at cutting back on operating costs, will the Government inform this Council whether it knows:

(a) the measures adopted by the MTRC in regard to its staffing establishment, as well as the duties and remuneration of its staff;

(b) if the MTRC has rescheduled its train services; if so, the details of that; and

(c) how such measures will affect the train services provided by the MTRC?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, in the midst of depression in Hong Kong, the severe economic downturn has affected the revenue flow and increased the pressure on the financial performance of many organizations, both in the private and public sectors. The MTRC has not been spared. To meet the challenges arising from the rapidly changing operating environment, the MTRC needs to respond to these changes by finding new ways to generate revenue, to keep its operating costs under good control and to seek continuously to improve productivity and efficiency.

The patronage growth for the MTR has experienced a marked decline last year. The patronage of the urban lines has declined by 3.9% in 1998 as compared with 1997 and the patronage of the Airport Railway is well below forecast. Although the MTRC has been able to maintain a high level of performance through continuous efforts in increasing productivity and efficiency, it has to plan its future operations under the possible prospect of a significant dilution in earnings.

Accordingly, the MTRC has embarked on a series of cost reduction programmes in its overheads, capital expenditure, work process efficiency and productivity in staff resources. These measures include management streamlining leading to hiring freeze and non-replacement of vacated posts, the elimination of 30 managerial posts and the deletion of all Transport Interchange positions leading to 48 Transport Interchange staff having to leave the corporation. In addition, the MTRC will continue to streamline its management structure to achieve greater efficiency. No further general staff trimming programme is expected in the foreseeable future. The MTRC does not plan to reduce the salaries paid to staff, but is reviewing other areas of staff costs such as benefits and allowances so as to reduce costs.

The MTRC has assured the Government that these staff saving measures will not result in any reduction in the level of safety or the quality of service for passengers. Neither has it rescheduled train services. It does however make adjustments to train frequencies from time to time to match passenger demands but they are not for cost reduction purpose.

The MTRC has to operate under prudent commercial principles within the terms of the MTRC Ordinance. Staff rationalization and cost saving measures are primarily management issues for the MTRC which must seek to remain competitive and financially viable. In the long run, a failure to react to the changing environment would severely affect the MTRC's ability to provide quality service to passengers and to undertake improvement programmes.

MR ANDREW CHENG (in Cantonese): Madam President, while accidents of passengers falling onto the tracks happened one after another lately, the MTRC has been testing the installation of screens on platforms for a very long time. Will the Secretary inform this Council whether the MTRC has delayed the installation of platform screens because of its expenditure cuts?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, the answer is negative. If Honourable Members would like to have more details, I have submitted twice detailed written replies on the MTRC's plan of installing platform screens in response to questions raised in this Council respectively on 20 January this year and 16 December last year. Members may wish to refer to these replies.

MRS MIRIAM LAU (in Cantonese): Madam President, as the MTRC has eliminated 30 managerial posts, will the Secretary tell us what duties are covered by these 30 managerial posts? Besides, how will the elimination affect the overall operation of the MTR? Who will take over the duties which were originally covered by these 30 managerial posts?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I have mentioned in the main reply that the MTRC's present measures aim mainly at streamlining corporate structure and operation in general. The 30 managers come from different departments, so different departments are involved. However, the MTRC has affirmed that the elimination of these 30 managerial posts will not affect its overall operation or standard of service; it only serves to attain the goals of streamlining structure and improving efficiency.

MRS MIRIAM LAU (in Cantonese): Madam President, the Secretary has not answered about their duties. Will he tell us what the so-called duties "in general" are? Are they station managers, clerical managers or other managers?

PRESIDENT (in Cantonese): Secretary, do you have anything to add?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I will provide the relevant detailed information to Mrs LAU in writing. (Annex IV)

DR RAYMOND HO (in Cantonese): Madam President, in the fourth paragraph of the Secretary's main reply, he says that train services will not be rescheduled because of the cutting back on operating costs. However, it was reported that the train frequency was reduced on the Airport Railway's Tung Chung Line. If it is not because of the cutting back on costs, is it due to other problems such as the design of the signalling system failing to meet the requirements?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I remember that I have answered a similar question about the train frequency of Tung Chung Line in a Legislative Council meeting last year. Anyway, in brief, the present frequency of the Tung Chung Line is one train every 10 minutes. This frequency is maintained throughout the day as long as the Tung Chung Line operates. In the long run, if the patronage and population of Tung Chung grow to a certain extent, the train frequency of the line can be increased. We have never said that the train frequency of Tung Chung Line will be reduced. It has been kept at the frequency of 10 minutes a train since its inauguration, and chances are that the frequency will be increased in the future. What we are discussing now is whether the frequency will be increased in the days to come, rather than whether the frequency of the Tung Chung Line has been slashed.

MR CHAN WING-CHAN (in Cantonese): Madam President, the MTRC is reviewing staff costs of other areas such as benefits and allowances so as to reduce costs. Will the Secretary tell us, if the above measures are to be adopted, whether the trade union of the MTRC will be consulted? Will the MTRC listen to the views of its staff and enhance communication like an open-minded employer?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, according to the information provided by the MTRC, the answer is affirmative. In fact, in the course of reviewing staff welfare, the MTRC has always been consulting the staff consultative council in detail and with sincerity. Therefore, in keeping with this spirit, the MTRC will continue to work with the staff side in search of a solution acceptable and satisfactory to the both parties.

MR CHAN WING-CHAN (in Cantonese): The Secretary has not answered my supplementary question at all. My question is: Has the MTRC exchanged views with its trade union and acted as an open-minded employer?

PRESIDENT (in Cantonese): Secretary, do you have anything to add?

SECRETARY FOR TRANSPORT (in Cantonese): I think I have already answered that question. Anyway, I can repeat it. The MTRC will definitely consult the relevant labour organizations and representatives on all measures regarding increasing income and decreasing expenditure.

MR LEE CHEUK-YAN (in Cantonese): Madam President, it seems to me that the main reply attributes the MTRC's layoff of staff and cutting back on benefits to the economic downtown and dire straits of Hong Kong. However, the truth is that the problem actually originates from the Airport Railway. In the first half of last year, the MTRC in fact made a profit of $1.2 billion, and it was only in the second half of the year that it lost money in operation, and that was all because of the Airport Railway. Does the Secretary agree with me? I just want the Secretary to make a fair remark: Does he agree that it is unfair to punish the MTRC employees with layoff and cuts in benefits? Is it fair to make them pay for the loss incurred by the Airport Railway? I just want the Secretary to make a fair and just remark. I think this is unfair and it is something that should not be done.

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I believe the last few sentences said by Mr LEE should actually be said by me: I should ask him to make a fair and just remark. I have said very clearly in the main reply that, in 1998, the patronage of the urban lines ─ I stress that they are "urban lines" which do not include the Airport Railway ─ declined by 3.9%. Among the 7 800 general staff of the MTRC, only 48 employees have to leave due to the corporation's present layoff measure and they are definitely connected with the operation of the Airport Railway. These 48 employees who have to leave all work at the Transport Interchanges of the Airport Railway stations and are responsible for directing traffic. Why does the MTRC delete these positions? It is because, after the Transport Interchanges of the Airport Railway came into operation, the MTRC discovered that there was no need to provide such a service and the work could well be taken up by other staff at the stations. This is what is meant by cutting cost and it is something that must be done. As for the managerial posts, we are saying that among the 900 managers, only 30 will be affected and the percentage is 3.3%. Basing on the above information, I hope that Mr LEE can make a fair remark. The MTRC's current measures of layoff and wage reduction are implemented not only because of the loss suffered by the Airport Railway.

MR LEE CHEUK-YAN (in Cantonese): Madam President, the Secretary has not answered my supplementary question.

PRESIDENT (in Cantonese): Mr LEE, which part of your supplementary question has not been answered?

MR LEE CHEUK-YAN (in Cantonese): I feel the Secretary has only answered that the layoff is fair, but he has not mentioned whether the cuts in benefits are fair. The cuts in benefits affect all MTRC employees, not only the employees of the Airport Railway. As for the 3.9%, it is very "trivial" and has little impact on the MTRC. I still hope that the Secretary can make a fair remark: Is it not unfair to punish employees by cutting back on benefits?

PRESIDENT (in Cantonese): Secretary, do you have anything to add?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I hope that the figure concerned is really as "trivial" as Mr LEE has said. However, it is indeed not a "trivial" thing to operate a corporation as the MTRC which runs such a big business and hires so many employees. I would like to stress once more that, as a responsible company, the MTRC must take the realistic operating environment and the prospective environment into account and thus take appropriate measures to earn more income and cut down expenses. Otherwise, it is only an irresponsible organization and, at the end of the day, the service provided daily to the more than 3 million passengers of the MTR will be jeopardized.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, I hope that the Secretary can make a fair remark. The 3.9% drop of patronage has led to the layoff this time around. But will the Government inform us whether, in the original plan, the Airport Railway is supposed to make profit or lose money? If it is supposed to lose money, how heavy is it a burden?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, very coincidentally, I have to give a written reply to another question today on the profit forecasts of certain public organizations including the Airport Railway. However, when I talked about the operation of the Airport Express and the Tung Chung Line just now, I said that the patronage of the Airport Railway falls about one third short of the forecast. This will definitely have a great, not "trivial", impact on the forecast profit. As for the actual amount of profit being affected, since the Airport Railway has only been operating for a few months, we have to wait for the year-end settlement of accounts before a concrete figure can be obtained.

MR LEUNG YIU-CHUNG (in Cantonese): I was asking: How heavy is the burden brought about by the losses? Is this staff trimming programme a result of the Airport Railway's patronage falling too far short of the forecast? Is the main reason for the layoff not the 3.9% drop in patronage?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I have admitted in the main reply that the Airport Railway operation is one of the factors, but the decline in patronage of the urban lines is obviously another factor.

PRESIDENT (in Cantonese): Fifth question.

Wage Reductions and Retrenchments Implemented by Public Organizations

5. MR LEUNG YIU-CHUNG (in Cantonese): Madam President, regarding the wage reductions and retrenchments implemented by the management of public organizations wholly or party owned by the Government or other publicly-funded organizations, will the Government inform this Council whether:

(a) the Administration has given any instructions to such organizations as to whether wage reductions and retrenchment should be implemented; if so, the contents of those instructions; if not, the reasons for that;

(b) the Mass Transit Railway Corporation (MTRC) gave notice to and consulted the Government prior to announcing its decision to lay off a number of employees last month; if so, of the opinion that the Administration had given to the company; if not, the reasons for that; and

(c) an assessment has been made to determine if the company's retrenchment of staff has been implemented in accordance with the procedures recommended in the Guidelines On What To Do If Wage Reductions And Retrenchments Are Unavoidable (the Guidelines) issued by the Labour Department; if the company has not followed the procedures, whether its knows the reasons for that?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, the first paragraph of my main reply is quite similar to the main reply to the fourth question, please bear with me if Members find parts of my answer are repetitive.

(a) In the midst of depression in Hong Kong, the severe economic downturn has affected the revenue flow and increased the pressure on the financial performance of many organizations, both in the private and public sectors. To meet the challenges arising from the rapidly changing operating environment, they need to respond to these changes by finding new ways to generate revenue, to keep their operating costs under good control and to seek continuously to improve productivity and efficiency.

The Administration has not given any instructions to government-owned commercial organizations regarding wage reductions and retrenchments. These bodies are autonomous and their boards are responsible for such matters. We therefore do not consider it appropriate to issue instructions of this nature to such bodies.

We are, however, in the process of seeking information from 10 such organizations on the steps they are taking, in parallel with the private sector's response to the economic downturn, to control staff costs, particularly those of management and senior staff, as this is a matter of public interest. We will study their replies carefully.

The Administration has also not issued any instructions to government subvented organizations regarding wage reductions and retrenchments. However, like all government bureaux and departments, organizations receiving government subventions are subject to the Enhanced Productivity Programme and the target of achieving 5% productivity gains by 2002-03.

(b) The MTRC has informed the Government of its staff rationalization and cost saving plans prior to their announcement. Under the MTRC Ordinance, the Corporation has to be run under the principle of commercial prudence. The staff rationalization and cost saving measures announced by the Corporation are consistent with this principle. The Corporation has assured the Government that these measures will not result in any reduction in the level of safety or quality of service for passengers. The Corporation has also assured the Government that they will minimize the impact on the concerned staff by offering them as much assistance as possible. The Corporation has taken measures including entering into discussions with their contractors and business partners to seek to outplace some of them. Those staff who cannot be outplaced immediately will be given priority to rejoin the Corporation, as and when recruitment recommences. Training courses have been arranged to help prepare them for job interviews.

(c) The Guidelines issued by the Labour Department last October are to advise both employers and employees on how to deal with wage reductions and retrenchments. The basic premise behind the Guidelines is to encourage employers and employees to have frank and sincere discussions, and in a mutually understanding spirit, if faced with the prospect of wage reductions and retrenchments. The objective of such dialogue is to arrive at a reasonable solution so as to avoid unnecessary disputes or conflicts. As circumstances vary among individual companies and some may have their unique mode of operation, it is not realistic to lay down a uniform set of circumstances and procedures in dealing with wage reductions and retrenchments. The Guidelines therefore can only set out some general principles in dealing with such situations and in reminding both employers and employees of matters to which they should pay attention and ways of arriving at a workable solution.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, according to paragraph 3.4 of the Guidelines, if after careful considerations the employer remains convinced that retrenchment is the only course for the corporation, he "must hold frank and open discussions with consultative committees, staff associations or in-house unions to explain to them fully the gravity of (his) organizations's problems." As far as I know, and as the Secretary said in his reply to the supplementary question raised by Mr CHAN Wing-chan, the Mass Transit Railway Corporation (MTRC) only mentioned that event with the Staff Consultative Committee and there was no open discussion of the event, nor was there any frank explanation of the gravity of the corporation's problems. So, may I ask the Secretary if the Government, when drawing up these Guideline, had harboured any thoughts of "permitting the officials to burn down houses while forbidding the common people to light lamps", as the saying goes? At the same time, how will the Government, in the course of enforcing the Guidelines, make these organizations comply with the Guidelines, so as not to make the Guidelines a "toothless tiger"?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, according to the information given to me by the MTRC, it was emphasized that they had made full reference to the Guidelines issued by the Labour Department and had fully complied with the six key points to be noted by employers in section 3 of the Guidelines. The six key points to note are: (1) the livelihood and future security of those to be laid off; (2) the members of the workforce to be laid off should be as few as possible and that it must virtually be a one-off exercise so that the remaining staff can be reassured that their jobs are secure, at least within a certain timeframe; (3) that the employer should do his homework very carefully to establish just how much it is going to cost to lay off a percentage of the workforce; (4) staff must be given full explanation of the gravity of the organizations's problems; (5) that the employer should discuss with the employees everything from the simplest to the most detailed points involved in calculating termination compensation; (6) that the employer must be patient and sympathetic in such discussions. Madam President, the MTRC has fully complied with the above key points mentioned.

PRESIDENT (in Cantonese): Mr LEUNG, which part of your supplementary question has not been answered?

MR LEUNG YIU-CHUNG (in Cantonese): Actually, what I want to ask is not about the details in the Guidelines which should be considered. What I am concerned is that there ought to be frank and open discussions and the employees should be given a full explanation of the gravity of the organization's problems, but I think that has not been done. Is the Government "permitting the officials to burn down houses while forbidding the common people to light lamps"? Has the Government monitored and inquired into that incident? Has the Labour Department done anything? What should be done to prevent the Guidelines from degenerating into a "toothless tiger"?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I have already mentioned in my main reply that the Guidelines only set out some general principles and remind the employers as to what they should do, such as the principles which should be adhered to and the attitudes which should be taken when wage reductions and retrenchments have become absolutely unavoidable. In this regard, what the MTRC has done is entirely consistent with the spirit of the Guidelines. The purpose of the Guidelines is to provide some general principles for employers' reference.

MR LAU KONG-WAH (in Cantonese): Madam President, the Secretary has said earlier that the MTRC retrenchment was made as a result of the 3.9% patronage drop and in terms of the staff laid off, the layoff rate at the managerial level was 3.3%. These two figures are strikingly close. I would like to ask on behalf of the incumbent managers, should the patronage drop further, will further retrenchments be made? What is the position of the Government, being one of the directors of the MTRC, on this issue? Is it in support of this practice?

PRESIDENT (in Cantonese): Mr LAU, I know that you would also like to raise a supplementary question on the fourth question, but I did not ask you to raise your question. Now it is the fifth question, the subject matter of which is different from that of the fourth question. Please think your supplementary question over again and I would let you ask it later. I would like to invite another Member to raise his supplementary question first.

MR LEE CHEUK-YAN (in Cantonese): Madam President, in part (b) of the main reply the Secretary mentioned that the MTRC should operate on prudent business principles, and so there was a need to reduce expenditure. The Secretary in fact also mentioned that the patronage of the Airport Railway had fallen short of the forecast by 30%. Does the Secretary agree that such a forecast is far from being prudent at all? However, the MTRC has been very prudent in cutting expenses and then cutting staff benefits as well, would the Secretary call that fair?

PRESIDENT (in Cantonese): Mr LEE ......

MR LEE CHEUK-YAN (in Cantonese): Madam President, I can see that you are knitting your brows, actually what I meant was I would like to ask the Secretary whether he would agree that the company had not been very prudent in making forecasts, and that it was on the other hand very prudent indeed in cutting expenditure and squeezing money and benefits out of the employees. There were no prudent and kind thoughts given to the livelihood of the employees but all that the company had done was to tighten its purse strings. Is this double standard not unfair?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, there is obviously a disparity between the actual patronage and the forecast of the Airport Railway. In answering numerous questions on this issue, I have already explained what that disparity is and I have also tried to analyse why there is such a disparity. As a matter of fact, the patronage of the new airport is also 19% short of the projected figures. When faced with a disparity between the actual situation and the initial forecast, as an accountable company, it is compelled to address the problem and to take bold and proper actions. If not, then who is going to suffer? The answer is the employees. In the long run, it is the 8 000-plus employees together with the passengers. What the MTRC is doing is for the sake of the "rice bowls" and the job security of these 8 000-plus employees in the long run, the service given to the passengers, as well as its responsibility to the people of Hong Kong. That is why this mild move aiming at cutting expenses is taken, and taken with a long-term commitment in mind. It will be rather inappropriate of us if we are to condemn such a mild move as this.

MR LAU KONG-WAH (in Cantonese): Madam President, I have given further thoughts to the supplementary question I have just raised and I feel that it has not deviated from the scope of the main question. However, I can put it in another way. As the Secretary is a member of the board of directors of the MTRC, does it mean that the Government supports the retrenchment made by the company last month? In the future, will the Government still stick to this objective and continue to lend its support?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, actually the two directors appointed by the Government share the same considerations with the other directors of the MTRC. Our first and foremost consideration is that how the company can maintain its service and overall operations without any disruptions. In this regard, when measures are proposed by the MTRC management to streamline its operations for the organization as a whole, of course, all the directors must express their support or objection taking into account the interests of the company as well as those of the parties affected. Therefore, the wishes of directors are in line with those of the Government in maintaining the services provided, the consistently efficient performance of the corporation as well as the long-term and overall benefits of its 8 000-plus staff.

MR ANDREW CHENG (in Cantonese): Madam President, in the last question and answer session of the Chief Executive, the Chief Executive's reply to the retrenchment made by the MTRC as "understandable", while the Secretary, in part (b) of the main reply, said the measures taken by the MTRC are consistent with the principle of commercial prudence. I think the Government is just helping someone to do evil, that is, enabling a public body wholly owned by the Government to lay off its staff while making a profit. As for this retrenchment by the MTRC, the Secretary has described it as being consistent with commercial principles, but is it also consistent with the Government's call for concerted efforts to tide over difficult times and the principle of employment creation mentioned by the Secretary?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I have made it very clearly in part (a) of my main reply, that is, that the economic downturn has increased the pressure on the financial performance of many organizations, both in the private and public sectors. To meet the challenges arising from the unfavourable operating environment, they need to respond to these changes by finding ways that will enable the organization to continue operating. The Government has launched the Enhanced Productivity Programme with a view to raising productivity and saving costs. In this respect, we share the same pressure experienced by commercial organizations, and all public organizations are in pretty much the same boat.

MR ANDREW CHENG (in Cantonese): Madam President, my supplementary question is: Will the Government consider the present retrenchment the MTRC inconsistent with the call for concerted action to tide over difficult times and the principle of employment creation?

PRESIDENT (in Cantonese): Secretary, do you have anything to add?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I do not feel that there exist any conflicts.

MISS CHAN YUEN-HAN (in Cantonese): Madam President, just now I have been listening to the Secretary's reply. I believe that in times of economic downturn, there is a need to find new ways to generate revenue and to keep operating costs under good control, and the public would agree to that as well. However, is it necessary to generate revenue and save costs by targeting at the employees and make them bear the brunt of all the troubles? Another concern is, like Mr CHAN Wing-chan and Mr LEUNG Yiu-chung have repeatedly asked the Government just now, whether the MTRC has acted according to the Guidelines compiled by the Government recently in making the retrenchment, and despite the Secretary's repeated affirmation, this is actually not the case. As the MTRC is a public organization wholly owned by the Government, could the Secretary or another Policy Secretary tell us what should we do?

PRESIDENT (in Cantonese): Which Policy Secretary will answer this question? Secretary.

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, Miss CHAN's supplementary question has been very well put indeed. She said that it appeared the MTRC had not acted according to the Guidelines. My answer is that the MTRC has indeed acted according to the Guidelines.

MISS YUEN-HAN (in Cantonese): Madam President, in fact the MTRC has not acted according to the Guidelines, the staff were just ......

PRESIDENT (in Cantonese): Miss CHAN, what would you like to ask? You must ask your supplementary question in a straightforward manner.

CHAN YUEN-HAN (in Cantonese): Madam President, I shall now raise my question. Thank you for giving me the chance and reminding me of the rule. How does the Secretary prove that the MTRC has acted according to the Guidelines? Why is the trade union which has a membership of a few thousand members not consulted? Could the Secretary for Transport answer my question directly?

PRESIDENT (in Cantonese): Secretary, do you have anything to add?

SECRETARY FOR TRANSPORT (in Cantonese): I have replied just now. I have also listed the six key points. I do not intend to repeat them here.

PRESIDENT (in Cantonese): Miss CHAN, I know that apart from you, there are also some other Members who have opinions different from the Secretary for Transport, but this cannot be dealt with during question time. Members may wish to follow up this issue through other effective channels.

The sixth question.

Proposed KCRC Station in Tsim Sha Tsui East

6. MR HOWARD YOUNG: Madam President, regarding the proposed Kowloon-Canton Railway Corporation (KCRC) rail station to be constructed in Tsim Sha Tsui East, will the Government inform this Council:

(a) whether it has assessed the impact of the relevant construction work on the business of hotels in the vicinity and on tourism as a whole;

(b) whether it will consider the views of the affected hotel operators and shopkeepers on minimizing such impact; and

(c) of its plans to minimize the nuisance caused to the public by such construction work?

SECRETARY FOR TRANSPORT: Madam President, the extension of the East Rail from Hung Hom to a new station in Tsim Sha Tsui at Middle Road (the TST Extension) will provide an additional convenient transport link between Tsim Sha Tsui and the New Territories, and to the boundary crossing to Lo Wu. It will enhance the attraction of Tsim Sha Tsui as a convenient shopping and commercial centre, both to the local community and to tourists. I believe that this view is shared by the hotels and shop operators in the area.

For a project of the scale of the East Rail extension to Tsim Sha Tsui, there will inevitably be some disruption and inconvenience during the construction period. For example, the temporary closure of part of Salisbury Road, part of the seafront promenade and some other public recreational facilities for certain periods between the year 2000 and 2003 will be required. Our objective is to minimize such inconvenience and disturbance. The roads and facilities affected will, therefore, be closed only while construction is in progress, and will be reinstated immediately after the construction is completed. To minimize disruption to local traffic, construction works along Salisbury Road will be carried out in phases and proper traffic diversion arrangements will be put in place. As far as practicable, we will also entrust to the KCRC the associated government public works, so as to shorten the period and scale of the road closure required.

We value the input and co-operation of the local community, hotels and shop operators during the construction of the TST Extension. We have contacted the management representatives of the hotels, shop operators and commercial buildings on the scope and impact of the project. The KCRC will soon have further meetings with them to brief them on the latest position. It will maintain an on-going dialogue with the parties concerned to keep them informed of the latest developments, including the environmental mitigation measures and the traffic diversion arrangements during the construction period. Their views will be taken into account in these matters, especially in drawing up the traffic diversion arrangements.

MR HOWARD YOUNG: Madam President, the objective for the end product of construction is to achieve an improvement on the station itself as well as on the related exits and access to the station. When the Secretary said in his reply to paragraph (b) of my question that the Government would consider the views of hotel operators and shopkeepers, are these views only confined to the construction process and the nuisance generated, or will it also consider views such as where the location of future exits should be in order to enhance pedestrian flow in business areas?

SECRETARY FOR TRANSPORT: Madam President, we certainly would consult and brief the operators and the parties directly affected by the project on the detailed design, including access to the railway station. Indeed, we have not yet gazetted the railway scheme as such, and after the gazetting, there will be opportunities for raising statutory objections. We certainly would like to consult and brief the parties involved before the statutory plan is gazetted.

MRS MIRIAM LAU (in Cantonese): Madam President, I would like to ask a minor question before asking a supplementary question. I would like to seek clarification on ......

PRESIDENT (in Cantonese): Mrs LAU, would you please ask your supplementary question direct.

MRS MIRIAM LAU (in Cantonese): Yes, Madam President. I now put my supplementary question. There is a discrepancy in the English and Chinese versions of the reply. In the English version of the second paragraph of the reply, it says that the period is between the year 2000 and 2003, but in the Chinese version, it says that it is between the year 2000 and 2004. Which one is the correct version? Secondly, since construction works will be carried out in Tsim Sha Tsui East, which is basically a traffic jam black spot, the Secretary in the second paragraph of his reply said that proper traffic diversion arrangements will be put in place. However, Chatham Road and Salisbury Road are already heavily congested. What are the feasible traffic diversion arrangements in the Government's contemplation to ensure a continuous smooth traffic flow which will not come to a standstill?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I thank Mrs LAU for pointing out the printing mistake. It should be between the year 2000 and 2004, in which the whole project will be completed. Traffic congestion in Tsim Sha Tsui East or the proposed construction area along Tsim Sha Tsui is indeed very serious. The Government did foresee the problem long time ago. The construction of Hung Hom Bypass was started in 1995 and is expected to be completed by August or September this year. Traffic in this black spot will be improved upon the completion the bypass. It will also tie in with the commencement of our new project by providing an alternate route for traffic diversion purposes.

MR AMBROSE CHEUNG (in Cantonese): Madam President, the Provisional Urban Council basically supports the TST Extension proposed by the KCRC. But it is rather worried about the Government's ability to monitor this project. Does the Government have any specific proposals and procedures in monitoring the project? In a recent consultation exercise conducted in the Provisional Urban Council or some district boards, five proposals were put forth: firstly, a single option without any alternative; secondly, as far as the impact on public recreational facilities is concerned, five such facilities will be closed down at the same time ......

PRESIDENT (in Cantonese): Mr CHEUNG, is there any relevance between the "five different proposals" and your supplementary question?

MR AMBROSE CHEUNG (in Cantonese): Yes, there is.

PRESIDENT (in Cantonese): I hope Members would be as succinct as possible in question time so that more Members could ask their questions.

MR AMBROSE CHEUNG (in Cantonese): Fine, Madam President. The five proposals I have just mentioned are as follows: The first one is a government-proposed single option without any alternative; five parks will be closed down simultaneously; the design is too general (the Signal Hill Garden is an example); assessment on environmental impact has yet to be done; assessment on pedestrian flow is not yet done either, but the Council and district boards are asked to accept the project. Can the Government tell us whether it has any more specific plan or proposal to follow up various situations in order to show that it is capable of monitoring the KCRC's proposed project?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, the Government's consultation is neither a one-way process nor something done on a one-off basis. The Honourable Member mentioned the Provisional Urban Council, the predecessor of which, the Urban Council, was first consulted in 1997. The consultation process is still going on. Undeniably, some concrete proposals, such as detailed environmental impact assessment and mitigation measures are indeed not yet completed. Hence, we have undertaken to brief and discuss with the Provisional Urban Council on how to minimize the impact on various facilities under its management. But I must stress that roads and facilities will not be closed down simultaneously unless it is necessary or essential to do so. Roads or facilities will be closed down in sections or phases when necessary and reinstated as soon as the project is completed. I should further stress that the Government is very concerned about various situations and seeks to ensure that disruption is kept to the minimum.

MR HO SAI-CHU (in Cantonese): Madam President, insofar as I understand it, it will take four years for the project to complete and associated government works will be entrusted to the KCRC so as to shorten the period of road closure required, according to the second paragraph of the Secretary's reply. Could the Secretary tell us whether the entrustment of the works, apart from keeping the road closure period to the minimum, can also shorten the construction period which is expected to be four years? If so, how will the construction period be shortened? Will compensation be given to shop operators who are affected during that period of time?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, let me talk about the associated government works first. As far as railway construction is concerned, the railway corporation will undertake the construction of the railway and stations while other related road works are basically the responsibility of the Government. For the benefit of enhancing the progress and shortening the time required, these two groups of works are undertaken simultaneously rather than separately or one after another. In other words, some public works will be entrusted to the railway corporation at the same time so that these two groups of works can tie in with each other. In fact, this can expedite the progress. As to the actual time that can be saved, I have no information in hand but will give Mr HO a written reply if necessary.

The second part of the question is about compensation. Under the current Railways Ordinance, any person whose business is affected, for instance, by a railway project, including road works, can lodge a claim for compensation in accordance with the law.

MR HOWARD YOUNG: Madam President, in response to my supplementary question, the Secretary said that there would be ample time for people to raise questions after the plan is gazetted. I am aware that the Hong Kong Hotels Association has, in fact, written to some government departments expressing their views on the location of station exits. Will the Government assure us that, although legally they can listen to objections or suggestions after it is gazetted, they will also give adequate consideration to such voluntary suggestions made before the tedious procedures involved in gazetting are completed?

SECRETARY FOR TRANSPORT: Madam President, I can assure the Honourable Member that we will certainly consider every view that we receive either before or after the railway scheme is gazetted. However, the mechanism of the gazetting is such that after the plan is gazetted, there is a statutory period of nine months within which we must try to resolve the objections with the objectors. And that is a time frame within which we must work. But prior to that, if there is any way that we can accommodate suggestions already been made, we would certainly include them before gazetting the plan.

MR AMBROSE CHEUNG (in Cantonese): Madam President, in the second paragraph of the main reply, the Secretary said that the project as a whole might affect the Tsim Sha Tsui seafront promenade. In fact, a total of five parks and leisure grounds, including the Signal Hill Garden, Middle Road children playground, Peking Road leisure ground, the garden outside Wing On Plaza, as well as Tsim Sha Tsui promenade, will be affected in different phases of the project from 2000 to 2004. Would the KCRC be asked to consider a few more options on the construction of the TST Extension? Would the public and district boards be further consulted on this matter?

SECRETARY FOR TRANSPORT (in Cantonese): Madam President, I really have to tell a story. We did not propose the TST Extension only right now. We started to carry out relevant study and put forth various proposals a few years ago. The various parties concerned have also been consulted. In 1996, we started to consult the Yau Tsim Mong District Board on different options for the Hung Hom/TST Extension. Different alignments were compared and the feasibility of certain alignments was discussed. Only after repeated discussions did we arrive at the present proposal. Of course, in the end, information concerning the scope of the project would be gazetted in accordance with the relevant statutory procedures. Interested parties can exercise their statutory rights to lodge objections. But it does not mean that I will make use of these legal procedures to fend off people's suggestions. Surely, we are ready to take on board people's views, including those of the Provisional Urban Council, on how to minimize the impact of the project as far as practicable.

PRESIDENT (in Cantonese): That is all for the story and the question time ends here.

WRITTEN ANSWERS TO QUESTIONS

Declaration Requirement on Documents Imported and Exported through Express Couriers

7. MR JAMES TIEN (in Chinese): Under the Import and Export (Registration) Regulations (Cap. 60 sub. leg.), any person who imports or exports through express couriers documents not exempted by the Regulations shall lodge declarations with the Commissioner of Customs and Excise and pay the relevant charges. In this connection, will the Government inform this Council:

(a) of the reasons for setting the above requirement;

(b) of the revenue attributable to the above requirement last year, and of its percentage against the total revenue derived from declaration charges as a whole; and

(c) whether the Administration will consider exempting the documents imported and exported through express couriers from the declaration requirement, so as to facilitate the conduct of business; if not, the reasons for that?

SECRETARY FOR TRADE AND INDUSTRY (in Chinese): Madam President,

(a) According to the Import and Export (Registration) Regulations, a subsidiary legislation under the Import and Export Ordinance (Cap. 60), with the exception of articles exempted specifically under regulation 3, any person who imports or exports any article shall lodge with the Commissioner of Customs and Excise a declaration within 14 days after the importation or exportation of the article and pay the prescribed charges. Under the existing regulations, the exempted articles are mainly those that are not used for commercial purposes, such as personal baggage, gifts, samples and articles solely used for the purpose of exhibition. At present, documents imported and exported through express couriers or by any other means do not fall within the scope of exempted articles.

(b) In 1998, the total revenue derived from the collection of declaration charges on all imports and exports of articles was $1,123 million. As the articles needed to be declared under the Import and Export (Registration) Regulations are classified by the categories they belong to rather than the means by which they are imported or exported, the Government therefore keeps no separate record on the amount of trade declaration charges collected from the import and export of documents through express couriers.

(c) The documents imported into and exported from Hong Kong, whether through express couriers or by any other means, may contain articles that are of commercial value, for example, valuable printed matters. Therefore, we are of the view that it is necessary to retain the declaration requirement for documents imported and exported through express couriers or by any other means.

Under this general principle, the departments concerned are considering exempting documents imported or exported through express couriers and which are without commercial value from the declaration requirement, so as to streamline the declaration process and to facilitate the conduct of business. Moreover, the Government is actively promoting the Electronic Data Interchange (EDI) scheme. Businessmen can now lodge declarations by EDI which is a much more efficient way to complete the required procedure.

Statistics on Disabled Persons

8. MR LAW CHI-KWONG (in Chinese): It is learnt that the Government has never compiled statistics on the disabled population in Hong Kong for use as reference data in planning the provision of relevant social services. In this connection, will the Government inform this Council whether it has plans:

(a) to include statistical items related to disabled persons in future population censuses; if not, the reasons for that; and

(b) to conduct a comprehensive and independent survey on the disabled population in Hong Kong; if so, the timing and scale of such survey; if not, the reasons for that?

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

(a) In considering what data topics are to be included in the 2001 Population Census, the Census and Statistics Department has indeed given detailed deliberations on whether to include the topic on people with disabilities. However, for the following reasons, we do not think that it is appropriate to obtain these data through the Population Census.

The topic on people with disabilities was included in the 1981 Population Census. However, experience from that population census was that there were considerable difficulties in collecting such data through the census. These included the difference in understanding of "disability" by the census enumerator and by the respondent, the need to delineate precisely different types and degrees of disability in the interviewing process, and the willingness on the part of respondents to supply information on household members with disabilities. Subsequent validation and analysis also suggested that the data on people with disabilities obtained from that census were subject to serious under-reporting, and hence was not accurate.

Disability is a complex concept. To ensure the accuracy of data on disability, the questionnaire has to be much more detailed and elaborate than what the Population Census can permit. Hence, we consider that statistical data on people with disabilities should not be collected through the Population Census. Other countries and territories also experience similar difficulties in this regard.

(b) The Census and Statistics Department is actively considering the collection of relevant data through existing statistical survey systems. As the technical problems involved are numerous and as there are also resource constraints, more in-depth studies are required before the scale and timing of such a task can be worked out.

Figures on Infants

9. MR MICHAEL HO (in Chinese): Will the Government inform this Council of the number of infants born annually in each of the public and private hospitals over the past five years and, of these infants, the respective numbers of those born by Caesarean section and those who died at birth?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President, according to the information provided by the Hospital Authority and the Department of Health, the number of births in each public and private hospital, which provides Obstetrics and Gynaecology services, in the past five years is as follows:

(i) the total number of births and the number of those born by Caesarean section in public hospitals is at Appendix I;

(ii) the total number of births and the number of those born by Caesarean section in private hospitals is at Appendix II;

(iii) the number of infants who died at birth, including still births (that is, number of foetuses with gestation period of 28 weeks or more that show no sign of life at birth) and neonatal deaths (that is, number of deaths aged within 28 days from birth) in public hospitals is at Appendix III; and

(iv) the number of infants who died at birth, including still births and neonatal deaths in private hospitals is at Appendix IV.

Appendix I

Total number of births and the number of those born by Caesarean section in public hospitals

	Number of total births (Number of those born by Caesarean section)
Public hospital	1993-94	1994-95		1995-96	1996-97	1997-98
Alice Ho Miu Ling Nethersole Hospital	1 325 (180)	The hospital was relocated to Tai Po in August 93
Caritas Medical Centre	2 623 (321)	2 417 (330)		2 297 (374)	1 988 (318)	1 716 (315)
Kwong Wah Hospital	5 400 (844)	5 145 (788)		4 562 (782)	4 472 (777)	4 281 (844)
Our Lady of Maryknoll Hospital	2 159 (464)	2 306 (523)		1 751 (392)	632 (163)	940 (254)
Pamela Youde Nethersole Eastern Hospital	910* (106)	3 641 (465)		4 084 (550)	4 183 (692)	3 725 (622)
Pok Oi Hospital	483 (0)	490 (0)		212 (0)	Delivery service closed in October 1995
Prince of Wales Hospital	7 961 (1 042)	8 003 (1 178)		7 534 (1 179)	7 138 (1 256)	5 920 (1 251)
Princess Margaret Hospital	4 258 (648)	4 390 (559)		4 219 (605)	3 833 (577)	3 113 (484)
Queen Elizabeth Hospital	6 531 (1 032)	6 233 (848)		5 941 (808)	5 774 (951)	4 427 (782)
Queen Mary Hospital	863 (173)	742 (175)		698 (153)	743 (175)	720 (154)
Tsan Yuk Hospital	5 223 (664)	4 775 (547)		4 837 (634)	4 524 (610)	4 013 (567)
Tuen Mun Hospital	6 017 (916)	6 685 (1 041)		6 935 (1 100)	6 883 (1 115)	6 105 (1 065)
United Christian Hospital	3 513 (335)	3 482 (437)		2 882 (469)	3 595 (645)	3 467 (635)
Yan Chai Hospital	317 (0)	Delivery service closed in December 1993.
Overall	47 583 (6 725)	48 307 (6 891)	45 952 (7 046)		43 765 (7 279)	38 427 (6 973)

* Pamela Youde Nethersole Eastern Hospital only started operation in October 1993.

Appendix II

Total number of births and the number of those born by Caesarean section in private hospitals

	Number of total births (Number of those born by Caesarean section)
Private hospital	1994	1995	1996	1997	1998
Baptist Hospital	8 126 (3 757)	7 596 (3 646)	6 651 (3 440)	6 494 (3 387)	5 329 (2 821)
Canossa Hospital	1 229 (609)	1 089 (532)	928 (476)	883 (528)	824 (470)
Evangel Hospital	1 602 (314)	1 353 (282)	1 126 (276)	146 (36)	Delivery service closed in February 1997
HK Adventist Hospital	688 (304)	686 (251)	868 (303)	737 (263)	689 (270)
HK Sanatorium Hospital	1 492 (798)	1 601 (834)	1 357 (760)	1 326 (749)	1 083 (676)
Matilda Hospital	737 (193)	751 (205)	751 (205)	775 (226)	846 (263)
Precious Blood Hospital	336 (137)	Delivery service closed in November 1997
St. Paul's Hospital	3 117 (1 400)	2 665 (1 242)	2 105 (1 014)	1 935 (1 003)	1 796 (908)
St. Teresa's Hospital	4 726 (1 925)	4 753 (1 917)	4 241 (1 778)	4 479 (2 012)	3 769 (1 694)
Tsuen Wan Adventist Hospital	1 498 (462)	1 403 (433)	1 110 (368)	1 095 (383)	920 (344)
Union Hospital	57* (20)	849 (353)	1 053 (467)	1 265 (621)	1 173 (624)
Overall	23 608 (9 919)	22 746 (9 695)	20 190 (9 087)	19 135 (9 208)	16 429 (8 070)

* The Union Hospital only started operation in June 1994.

Appendix III

Total number of still births (that is, number of foetuses with gestation period of 28 weeks or more which show no sign of life at birth) in public hospitals

	Number of still births
Public hospital	1993-94	1994-95	1995-96	1996-97	1997-98
Alice Ho Miu Ling Nethersole Hospital	3	The hospital was relocated to Tai Po in August 1993
Caritas Medical Centre	10	16	14	10	6
Kwong Wah Hospital	17	28	11	20	16
Our Lady of Maryknoll Hospital	11	9	4	3	2
Pamela Youde Nethersole Eastern Hospital	4	6	17	9	13
Pok Oi Hospital	0	1	0	Delivery service closed in October 1995
Prince of Wales Hospital	52	30	31	25	25
Princess Margaret Hospital	22	11	23	16	8
Queen Elizabeth Hospital	38	30	22	20	19
Queen Mary Hospital	6	10	4	7	8
Tsan Yuk Hospital	24	16	19	12	13
Tuen Mun Hospital	23	27	23	26	24
United Christian Hospital	23	15	6	7	4
Yan Chai Hospital	0	Delivery service closed in December 1993.
Overall	233	199	174	155	138

Total number of neonatal deaths (that is, number of deaths aged within 28 days from birth) in public hospitals

	Number of neonatal deaths
Public hospital	1993-94	1994-95	1995-96	1996-97	1997-98
Alice Ho Miu Ling Nethersole Hospital	3	The hospital was relocated to Tai Po in August 1993
Caritas Medical Centre	2	9	9	6	8
Kwong Wah Hospital	10	13	10	9	13
Our Lady of Maryknoll Hospital	7	4	3	2	0
Pamela Youde Nethersole Eastern Hospital	1	6	6	7	2
Pok Oi Hospital	1	0	0	Delivery service closed in October 1995
Prince of Wales Hospital	26	1	2	10	12
Princess Margaret Hospital	12	6	16	4	12
Queen Elizabeth Hospital	47	42	27	23	16
Queen Mary Hospital	1	13	13	10	10
Tsan Yuk Hospital	11	11	13	7	1
Tuen Mun Hospital	20	22	24	18	11
United Christian Hospital	11	19	1	11	7
Yan Chai Hospital	0	Delivery service closed in December 1993.
Overall	152	146	124	107	92

Appendix IV

Total number of still births (that is, number of foetuses with gestation period of 28 weeks or more which show no sign of life at birth) in private hospitals

Private hospital	Number of still births
	1994	1995		1996		1997	1998
Baptist Hospital	22	26		19		11	10
Canossa Hospital	4	1		2		2	1
Evangel Hospital	3	4		1		2	Delivery service closed in February 1997
HK Adventist Hospital	0	2		2		0	0
HK Sanatorium Hospital	8	2		3		5	4
Matilda Hospital	0	0		3		0	2
Precious Blood Hospital	0	Delivery service closed in November 1994
St. Paul's Hospital	8	5	6		3			6
St. Teresa's Hospital	5	7	2		8			12
Tsuen Wan Adventist Hospital	5	2	2		3			0
Union Hospital	0	1	3		2			2
Overall	55	50	43		36			37

Total number of neonatal deaths (that is, number of deaths aged within 28 days from birth) in private hospitals

Private hospital	Number of neonatal deaths
	1994	1995	1996	1997	1998
Baptist Hospital	2	7	4	3	6
Canossa Hospital	0	1	2	0	0
Evangel Hospital	4	2	0	0	Delivery service closed in February 1997
HK Adventist Hospital	0	0	0	0	0
HK Sanatorium Hospital	3	1	3	0	1
Matilda Hospital	1	1	0	0	1
Precious Blood Hospital	0	Delivery service closed in November 1994
St. Paul's Hospital	2	1	0	0	1
St. Teresa's Hospital	0	6	2	3	0
Tsuen Wan Adventist Hospital	0	0	0	0	0
Union Hospital	0	0	1	3	1
Overall	12	19	12	9	10

Mutual Fidelity Insurance Scheme

10. MR ALBERT HO (in Chinese): At present, the Professional Indemnity Scheme for practising solicitors does not provide indemnity in respect of claims brought about by the dishonesty, fraudulent act or fraudulent omission (such acts) of solicitors. In this connection, will the Government inform this Council whether:

(a) it has assessed the adequacy of the existing legislation in protecting clients from losses brought about by such acts of their solicitors; if the existing legislation is found inadequate, whether it will consider introducing amendments to the relevant legislation in order to provide better safeguards for clients; and

(b) it will consider establishing a mutual fidelity insurance scheme and requiring practising solicitors to join such a scheme in order to provide compensations to clients who suffer from losses brought about by such acts of their solicitors?

SECRETARY FOR JUSTICE (in Chinese): Madam President, the adequacy of existing legislation in protecting clients from losses caused by their solicitors was assessed in the Consultation Paper on Legal Services, published by the former Attorney General in March 1995. The paper noted that the existing Indemnity Fund does not compensate clients for money lost by reason of the fraudulent act of solicitors who are sole practitioners or partners of a firm. Moreover, it compensates clients in respect of a fraud perpetrated by a solicitor's employee only if the solicitor could have prevented the fraud by exercising ordinary care and skill in the management of the practice. The paper considered this position to be unsatisfactory. It recommended that there should be a statutory fidelity fund to protect consumers from the dishonesty of solicitors or their employees, which should be financed by a levy on solicitors.

A majority of respondents to the Consultation Paper supported the establishment of such a fidelity fund. As a result, the Report on Legal Services published by the former Administration in February 1996 stated that legislation would be introduced to implement the recommendation.

Since then, the Law Society has established a working party to consider the establishment of a fidelity fund. I am informed by the Law Society that it is collecting information from other common law jurisdictions to ascertain whether, and if so, on what basis they have such funds. The method by which such a fund would be financed is clearly a fundamental issue.

In the light of this development, the Administration is not currently proposing either to introduce legislative amendments or to establish a mutual fidelity insurance scheme for lawyers. However, the Administration will monitor the Law Society's work in this area and will, if necessary, reconsider its position.

Procurement of Computer Products by the Government through Tenders

11. MR SIN CHUNG-KAI: Regarding the procurement of computer products by the Government through tenders, will the Government inform this Council:

(a) of the normal length of tender period for such products;

(b) of the normal time gap from tender invitation to product delivery;

(c) given the short product life cycle of some computer products, how it ensures that the computer products procured through tenders will not soon become obsolete; and

(d) whether it will consider other means of procuring computer products with short product life cycle?

SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING: Madam President,

(a) For the procurement of computer products, we normally allow at least three weeks for tenderers to submit their bids. Where the procurement is covered by the World Trade Organization Agreement on Government Procurement (WTO GPA), that is, with a tender value exceeding 130 000 Special Drawing Rights (SDR) (that is, around $1.47 million), the tender period is six weeks at the minimum.

(b) Depending on whether the procurement is covered by the WTO GPA, the normal time gap from tender invitation to product delivery ranges from two to four months.

(c) We normally include a provision on technology substitution in computer contracts. This enables the Government to substitute a product/model which has become obsolete before delivery by a new product/model that meets the specified user requirement.

(d) We adopt a bulk contract approach to improve the efficiency in procuring computer items commonly used by departments on an on-going basis, for example, personal computers, printers and word processing software. Under the bulk contract, the Government has the flexibility to procure new models that come on the market subsequent to the conclusion of the contract without further tendering. With this arrangement, users within the Government will be able to switch to new models quickly. We also keep the procurement process for computer products under review in order to cope with rapid technological development.

Deficit Recorded in the Protection of Wages on Insolvency Fund

12. MR ERIC LI (in Chinese): The Protection of Wages on Insolvency Fund (the Fund) has recorded, for the first time, a deficit this year since it came into operation. In this connection, will the Government inform this Council whether it knows:

(a) if the Fund will have continuous deficits in the coming three years; if there will be deficits, the estimated deficit for each year; and

(b) if the relevant authorities have formulated any contingency plans to reduce the deficit; if so, whether they have assessed the impact of these plans on the operating costs of industrial and commercial enterprises?

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

(a) It is estimated that the Fund will incur deficits in the current and the next two financial years. Details are as follows:

1998-1999	$160 million
1999-2000	$114 million
2000-2001	$108 million

The above estimates are projected mainly on the basis of past experience. However, it should be noted that the estimates are subject to a number of unpredictable variables, including the Fund's income from the levy on business registration certificates, the number of applications approved by the Fund, the income and the length of service of individual applicants, and so on.

The Fund will incur a smaller deficit in 1999-2000, compared with that in 1998-1999 mainly because the Fund is expected to recover, by way of subrogation in 1999-2000, about $32 million from the assets of Yaohan Department Store after its winding-up.

We have proposed that the maximum ex gratia payment of severance payment be increased from the existing limit of $36,000 to $50,000, plus 50% of the excess entitlement. It is estimated that the Fund will have to pay an additional $19 million per year, which has already been taken into account in the estimated deficits above.

(b) As at the end of 1998, the Fund recorded an accumulated fund of $747.5 million. It is estimated that the Fund will incur deficits in the next two financial years. However, barring any drastic increase in the number of applications, we estimate that the Fund will still have a balance of $470 million at the end of March 2001, without the need of raising the levy on business registration certificates. Therefore, it is unnecessary for the Government to consider any contingency plans for the time being.

Profitability of Infrastructure Facilities

13. MR CHEUNG MAN-KWONG (in Chinese): Will the Government inform this Council whether it knows:

(a) the current profitability of various infrastructure facilities (including the Western Harbour Crossing, the Airport Railway, the new airport at Chek Lap Kok and Route 3 (Country Park Section), and so on) which came into operation in recent years;

(b) the respective estimated profits and internal rates of returns (IRR) of these facilities; and

(c) if the answers to parts (a) and (b) above indicate that current profits are lower than originally expected,

(i) whether the relevant authorities have assessed the reasons thereof;

(ii) the measures that will be adopted to improve the profitability of these facilities; and

(iii) whether there are plans to revise the IRRs of these facilities; if so, of the revised IRR for each of them; if not, the reasons for that?

SECRETARY FOR TRANSPORT (in Chinese): Madam President, the infrastructural facilities referred to in the question, that is, Western Harbour Crossing, Lantau Link, Route 3 (Country Park Section) (CPS), Airport Railway and the new airport all came into operation recently. The first four facilities were planned and built to provide infrastructural support to the new airport which has been built to meet Hong Kong's need well into the 21st century.

The return on investment and ultimately the profitability of each project is measured by expected internal rate of return (IRR), projected to be as follows over the project's operational life:

* this equates approximately to 10% in nominal terms assuming 5% long-term inflation rate.

The patronage of the above facilities for the months since the commencement of their operation has been lower than the original forecasts. As regards the new airport, the current volatile economic situation has significantly affected the number of air travellers. This and the lower than expected rate of intake for the Tung Chung New Town have affected the usage of the Lantau Link and the Airport Railway. The Mass Transit Railway Corporation is making vigorous efforts to reduce operating costs and promote the use of the Airport Express Line. The Airport Authority is taking measures to cut costs and explore new revenue sources. The Western Harbour Crossing Company Limited and Route 3 (CPS) Company Limited have also taken measures to keep costs down and launched promotional campaigns and concession schemes to boost patronage.

All these infrastructural facilities are large scale and long-term projects. The rate of return on investment is in respect of the entire period of their operational lives. There is therefore neither the plan nor the need to revise the IRR of these projects at this early stage.

Time Limit for Surrendering Flats to HA

14. MR LAU KONG-WAH (in Chinese): The Hong Kong Housing Authority (HA) put in place new measures on 14 January 1999, requiring successful Green Form public rental housing (PRH) applicants under various home ownership schemes to surrender their original PRH flats to the HA within one calendar month after taking over their newly-bought flats or effecting the Deed of Assignment. Tenants who occupy the flats for an extended period will be charged an occupation fee equivalent to three times the amount of the net current rent plus rates. In this connection, will the Government inform this Council if it knows:

(a) the criteria adopted by the HA in determining the one-month time limit; and

(b) if the HA has assessed whether the time limit is adequate for the tenants concerned to have the fitting-out works of their newly-bought flats completed and to move out from their PRH flats; and if the assessment shows that the time limit is too short, whether the HA will consider extending the time limit to two months; and if no consideration will be given to extending the time limit, the reasons for that?

SECRETARY FOR HOUSING (in Chinese): Madam President, to ensure equitable use of public housing resources, the criterion adopted by the HA in determining the timeframe is the prevention of double housing benefits enjoyed by a public housing tenant for a prolonged period. Thus the one-month time limit is set and is considered fair. It also facilitates early release of the rental flat for re-allocation to another household in genuine need.

Whether the one-month time limit is adequate depends on individual circumstances. If an outgoing tenant has difficulty in moving to a newly bought flat within one month for any reason, the HA will permit the tenant to extend the stay up to two more months by paying an occupation fee. Such an arrangement is considered adequate and fair, and will discourage a household from holding on to the rental flat.

Further extension will be allowed only exceptionally and on strong compassionate grounds.

Goods Vehicle Parking Spaces in Hong Kong Island East

15. DR YEUNG SUM (in Chinese): Regarding the supply and demand of goods vehicle parking spaces in the Eastern District of Hong Kong Island, will the Government inform this Council:

(a) of the respective shortfalls, according to the Administration's latest estimates, of daytime and overnight goods vehicle parking spaces in the district by the year 2001;

(b) of the number of cases of illegal on-street parking involving goods vehicles in the district last year;

(c) of the respective sites which have been classified or rented out on short-term tenancies as temporary vehicle parks, and those which have been formally planned as vehicle parks, among the sites which have been earmarked for goods vehicle parks in the district; and where they are mainly located;

(d) of the measures adopted since 1995 to solve the problem of shortage of goods vehicle parking spaces in the district; of the new measures that the Administration intends to adopt in the future, so as to ultimately solve the problem of shortage of goods vehicle parking spaces in the district; and

(e) whether it has assessed when a balance will be achieved between the supply and demand of goods vehicle parking spaces in the district; if so, the results of the assessment?

SECRETARY FOR TRANSPORT (in Chinese): Madam President,

(a) According to the forecast of the Transport Department on goods vehicle parking spaces in the Eastern District, there will be a shortfall of 1 300 spaces during the day and a surplus of 1 100 spaces overnight in 2001.

(b) A survey carried out by the Transport Department in August 1998 revealed that there was a daily average of 314 goods vehicles illegally parked in the Eastern District.

(c) There are 13 sites in the Eastern District which are used for goods vehicle parking. The details are at Annex. They are all sites granted on short term tenancies for temporary parking purposes. The Government's plans to provide permanent car parking facilities do not include conversion of any of these sites into permanent goods vehicle parking lots as they will be used for other permanent development purposes.

(d) Since 1995, the following measures have been or are being implemented in the Eastern District to increase the supply of parking spaces for goods vehicles:

(i) The number of short term tenancy sites for goods vehicle parking has been increased from eight in 1995 to 15 in 1998, resulting in the increase of goods vehicle parking spaces from 1 100 to 1 400.

(ii) A multi-storey car park with a provision of 400 parking spaces for light goods vehicles and medium goods vehicles has been planned at Lo Shue Pai. The site is scheduled for sale in 2000-01.

(e) The Government's ability to provide car parking spaces to fully meet the projected daytime shortfall for goods vehicle parking is constrained by many factors, especially the limited availability of land in the Eastern District. The Transport Department is liaising with the Lands Department and monitoring the situation closely. Steps will be taken to increase the supply of goods vehicle parking spaces as far as practicable.

Annex

List of Short Term Tenancy Sites in Eastern District
as at December 1998

STT No.	Location
EHX 147	Hing Man Street
EHX 176	Siu Sai Wan Road
EHX 178	Hoi Yu Street
EHX 179	Ka Yip Street
EHX 189	Siu Sai Wan Reclamation
EHX 194	Java Road
EHX 196	Hing Man Street
EHX 201	Lei King Road
EHX 203	Siu Sai Wan Reclamation
EHX 229	Shing Tai Road
EHX 230	Heng Fa Chuen
EHX 232	Siu Sai Wan Road
EHX 67	Holy Cross Path

Re-registration of Ventilation Contractors

16. MR LAU KONG-WAH (in Chinese): In March 1998, the Buildings Department wrote to all registered ventilation contractors in the territory, requiring them to register again under the new registration system prescribed by the Buildings (Amendment) Ordinance 1996, by April 2000. In this connection, will the Government inform this Council whether there is any difference between the new and the old systems in terms of the examination procedures and criteria; if so, the reasons for such differences; if not, the justifications for the Administration to require these contractors to be examined again?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Chinese): Madam President, the Buildings (Amendment) Ordinance 1996 provides for, among other things, the implementation of a new registration system for contractors who are categorized into registered general building contractors and registered specialist contractors. Ventilation contractors fall into the latter category.

On 1 April 1998, the Buildings Department implemented the new registration system for specialist contractors. As a transitional arrangement, the current registration of ventilation contractors will remain valid within two years after the implementation date of this new system.

Under the old system, there were no stipulations for specific requirements on the qualifications, competence and experience of the contractors. However, under the new system, an applicant must fulfill the following criteria:

(a) if it is a corporation, the Building Authority will examine its management structure to ensure that it is competent to perform the responsibilities specified in the Buildings Ordinance;

(b) the applicant himself, officers or key persons such as the appointed persons and technical directors must reach the specified level in terms of qualifications and experience; and

(c) the Building Authority will examine the applicant's ability to have access to plant and resources.

On the procedures of examination, the difference between the new and old systems lies in the appointment of a Contractors Registration Committee by the Building Authority under the Buildings (Amendment) Ordinance 1996 to assist him in considering the contractors' applications for registration. The roles of the Committee include examining the applicant's qualifications; inquiring as the Committee considers necessary to ascertain whether an applicant has the relevant experience; conducting interviews with the applicant or the appointed persons; and advising the Building Authority to accept, defer or reject applications. The Committee consists of a Building Authority's representative and eight persons nominated by professional bodies or concerned associations and organizations, which include the Hong Kong Institute of Architects, the Hong Kong Institute of Surveyors, the Hong Kong Institute of Engineers, the Hong Kong Construction Association Limited, the Hong Kong E&M Contractors' Association Limited, and such bodies as the Building Authority may think fit.

The purposes of formulating a new registration system and standards for contractors are to raise the level of the construction industry and the quality of registered contractors, to clearly define the statutory responsibilities of a contractor registering in the status of a corporation, and to ensure that a registered contractor possesses adequate qualifications, experience, ability and resources to perform the responsibilities stipulated in the Buildings Ordinance.

Assistance to Small and Medium Enterprises

17. DR DAVID LI: The provisional seasonally adjusted unemployment rate rose to 5.8% in the last quarter of 1998, which is the highest figure ever derived from General Household Surveys conducted since 1981. In this connection, will the Government inform this Council whether it will consider introducing measures to assist small and medium sized firms to maintain the number of their employees?

SECRETARY FOR TRADE AND INDUSTRY: Madam President, the Government is committed to providing maximum support to small and medium enterprises (SMEs) to enhance their productivity and competitiveness. To meet the specific needs of SMEs, the Government and various industrial support organizations have introduced a range of measures and services including various service centres, Special Finance Scheme for Small and Medium Enterprises and the Small and Medium Enterprise Office to be set up under the Industry Department this year. In addition, the fruition of our various support schemes such as the Industrial Support Fund and the Services Support Fund will also help strengthen the competitiveness of our SMEs. Under the free market principle, the Government has no intention to interfere with the operation and the number of employees of individual firms. However, these measures which aim to enhance competitiveness should be positive for the economic development of Hong Kong in the long term. This in turn should be able to create better employment opportunities for our workforce eventually.

Alignment Design of Tseung Kwan O Western Coast Road

18. MR FRED LI (in Chinese): It is learnt that the proposed alignment of Tseung Kwan O Western Coast Road (WCR) will pass through Lei Yue Mun district, which will necessitate the cessation of business for a considerable number of seafood shops and restaurants, thereby seriously affecting the livelihood of the residents concerned and hindering the tourism development in the district which is renowned internationally for its characteristic restaurants. In this connection, will the Government inform this Council:

(a) of the respective estimated numbers of households, seafood shops and seafood restaurants in Lei Yue Mun district that will be affected by the proposed works;

(b) whether it plans to modify the alignment design of the road so as to bypass those shops and restaurants; and

(c) whether it plans to consult the relevant Provisional District Board and local organizations before a final decision is made on the alignment design?

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

(a) The Government has not yet taken a final decision on the alignment of the WCR. Although the Government's feasibility study has recommended a preferred alignment, the exact number of households, restaurants or shops that would be affected could not be established until the detailed design of the road has been completed. The Government would ensure that the road would be designed in such a way as to minimize as far as possible any disturbances that might be caused to the Lei Yue Mun seafood restaurants and shops.

(b) The Government began to explore possible alignments for the WCR in early 1997 and has studied various possible options including those bypassing Lei Yue Mun seafood shops and restaurants. The various options that have been considered could broadly be categorized into:

(i) Sea Options ─ they connect Tseung Kwan O and the proposed Yau Tong Bay Bridge by way of marine bridges that go along the waterfront of Lei Yue Mun. These options are not acceptable because they would reduce the width of the marine fairway of Lei Yue Mun Gap by about one quarter (from 450 m to 350 m). This would adversely affect the very busy marine traffic there. Moreover, the deep water and strong currents around Lei Yue Mun Point would render construction extremely difficult.

(ii) Tunnel Options ─ they run through the Lei Yue Mun Headland in tunnel and connect to the proposed Yau Tong Bay Bridge. As the tunnel would be 700 m long, Dangerous Goods Vehicles (DGVs) will be banned from using the road, thus defeating one of the main purposes of the WCR. Moreover, tunnel options will also involve the WCR cutting through the same area of the Lei Yue Mun seafood restaurants.

(iii) Inland Options ─ they run on elevated structure above the existing Cha Kwo Ling Road. These options would require resumption of industrial buildings at Yau Tong and also affect housing developments along the road. These options also require heavy cutting into the slope of the Lei Yue Mun Headland. Moreover, building an elevated road above the Cha Kwo Ling Road would create unacceptable noise, air quality and visual impacts on the areas along the alignments.

The recommended option presented to the Kwun Tong Provisional District Board (PDB) is already the option with least adverse impact, having regard to all constraints on the construction of the WCR.

(c) The Government first consulted the Kwun Tong DB on the schematic plan of the WCR in 1993 and subsequently reported progress to the Kwun Tong DB in 1996. The Government presented the schematic design of the WCR to the Kwun Tong DB in June 1997. Our preferred alignment was endorsed by the Traffic and Transport Sub-committee of both the Kwun Tong PDB and the Sai Kung PDB in December 1998. We will be briefing the full Kwun Tong PDB again on 8 February to provide further details regarding the WCR. Departments concerned stand ready to brief local organizations on the WCR.

Controls on Advanced Technologies and Encryption Technology

19. MR SIN CHUNG-KAI: Participating countries in the Wassenaar Arrangement (WA) on Export Controls for Conventional Arms and Dual-use Goods and Technologies agreed at their fourth plenary meeting held on 2 and 3 December 1998 to maintain controls on certain advanced technologies and encryption technology. In this connection, will the Government inform this Council:

(a) whether it has assessed the impact of the decision on the import of such technologies into Hong Kong; if so, the details of its assessment; if not, the reasons for that; and

(b) of the measures in place to assist the local industries concerned to obtain or develop such technologies?

SECRETARY FOR TRADE AND INDUSTRY: Madam President,

(a) Members of the WA agreed in December 1998 to clarify and relax the controls on a number of encryption items. Apart from clarifying the scope of liberalization on certain consumer entertainment television systems such as DVD products, cordless telephone systems designed for home or office use, and equipment which is specially designed to protect intellectual property from illegal copying such as movies or music sent over the Internet, the more significant revision covers the relaxation of encryption products at or below 56-bit and those mass-market hardware.

We welcome such relaxation of control. We will introduce legislative amendments to Schedule 1 of the Import and Export (Strategic Commodities) Regulations to bring our control in line with the WA's latest revisions. Upon enactment of the amendments, the import and export of those encryption products which have been removed from the WA's control list will no longer require licences. Preparation on the amendments is underway. We aim to have the amendments effected as soon as practicable. The trade of such products will be facilitated insofar as they are decontrolled by the WA, and thus removing the need for licensing requirements in Hong Kong.

(b) We are keen on ensuring our businesses' access to a wide range of high-tech products and advanced technologies produced by our trading partners. It is, therefore, our established practice to follow closely the revisions made by the international control regimes governing the flow of high-tech products. It is also in Hong Kong's interest to maintain an effective control system so as to ensure the confidence of our trading partners in our system, and thus our continued access to high-tech products and advanced technologies. We will also continue to maintain regular dialogue with our major trading partners so as to keep us updated on developments in the international arena in this field.

Construction of Phase II of the Cheung Sha Wan Wholesale Food Market Complex

20. MR JAMES TO (in Chinese): The Government informed this Council earlier that it would undertake the construction of the Phase II of the Cheung Sha Wan Wholesale Food Market Complex (the Complex) and had revised the scope of the project. In this connection, will the Government inform this Council whether:

(a) the mid-stream container working facilities in the original design will be retained in the revised project; if not, the reasons for that; and

(b) it has assessed if the increased traffic flow of heavy vehicles will lead to traffic congestion in the vicinity of the residential area within the reclaimed area of West Kowloon upon the opening of the Complex; if so, the details of it; and whether any corresponding measure has been formulated in this regard?

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

(a) The mid-stream container handling facilities in the original design will not be retained in Phase II of the Complex. The recent slowdown in mid-stream operations has reduced the demand for mid-stream sites and we consider it not necessary to provide additional facilities for mid-stream operations in Phase II of the Complex.

(b) The Architectural Services Department has commissioned consultants to carry out traffic impact assessment (TIA) for the Complex Phase II project. The TIA will study and assess the potential traffic impact arising from the operation of the Complex on the West Kowloon Reclamation area (including the residential area), and recommend appropriate mitigation measures to minimize traffic impact. The TIA will start in February this year and is scheduled for completion by the end of this year.

BILLS

First Reading of Bills

PRESIDENT (in Cantonese): Bills: First Reading.

LEGISLATIVE COUNCIL (AMENDMENT) BILL 1999

ELECTIONS (CORRUPT AND ILLEGAL CONDUCT) BILL

CHINESE MEDICINE BILL

CLERK (in Cantonese):

Legislative Council (Amendment) Bill 1999 Elections (Corrupt and Illegal Conduct) Bill Chinese Medicine Bill.

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.

LEGISLATIVE COUNCIL (AMENDMENT) BILL 1999

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, I move the Second Reading of the Legislative Council (Amendment) Bill 1999.

The election of the First Legislative Council of the Hong Kong Special Administrative Region was successfully held in May last year which also set a record high voter turn-out rate of 53%. According to the blueprint set down in the Basic Law, the Hong Kong Special Administrative Region (SAR) will hold the election of the Second Legislative Council in 2000. It is now time to make the detailed electoral arrangements by way of legislation.

The Government's long-standing objective for the development of the electoral system is very clear. We will do our best to:

(a) continue to promote the democratic development in Hong Kong in accordance with the Basic Law under the principle of gradual and orderly progress;

(b) ensure that the electoral arrangements are open, fair, clean and acceptable to the people of Hong Kong; and

(c) encourage active participation in future elections, and enhance the people's knowledge and awareness about the elections.

In December last year, the Government consulted the Legislative Council Panel on Constitutional Affairs in respect of the electoral arrangements for the Second Legislative Council. The Legislative Council (Amendment) Bill 1999 tabled today seeks to amend the existing Legislative Council Ordinance, with a view to establishing the legal basis for the election of the Second Legislative Council, and its text also reflects the views put forward by the public and Members. The Bill will also make consequential amendments to the Electoral Affairs Commission Ordinance and other Ordinances. I will now highlight the important points of the Bill to Members.

In accordance with the Basic Law, the Bill stipulates that the number of seats for geographical constituencies will increase from 20 to 24. Twenty-four Members will be returned from five geographic constituencies, each consisting of four to six seats. The "list voting system" will continue to be used in the election of the Second Legislative Council as it has now been familiar to and widely accepted by the community.

The number of seats for functional constituencies will remain at 30. The delimitation of functional sectors will basically be the same as the First Legislative Council election, with the exception of the Urban Council and Regional Council functional constituencies which will be replaced by two new ones, namely the District Council and the catering functional constituencies. The District Council functional constituency will include all District Council members covered in the District Councils Bill. The method of delimitation of the catering functional constituency will be the same as the method for delimitation of the catering subsector in the Election Committee in 1998.

The Bill also proposes certain technical amendments to the electoral arrangements for the functional constituencies in order to delimit the various constituencies more clearly. The basic criteria for the eligibility of electors in every functional constituency will be specified in the Legislative Council Ordinance while the detailed list of electors will be set out in a new schedule. In addition, we will also update the list of electors according to the latest data available, such as by deleting those companies and organizations that have been closed down.

As regards the electoral arrangements for the Election Committee, other than reducing the number of seats to be elected by the Committee from 10 to six, the rest will remain practically the same as those of the last election. To adapt the relevant statutory provisions to the election of the Second Legislative Council, the Bill also proposes certain technical amendments and some others consequential upon the establishment of the District Council and the catering functional constituencies.

It should be noted that we have, in the light of experience gained from the First Legislative Council election, proposed in the Bill several measures to improve the existing electoral arrangements. They include:

(a) To introduce an arrangement of "advance polling" to allow voters who are unable to cast their votes on the general policy day for various reasons to vote in advance. The Chief Executive will specify a date or dates within 15 days before the general polling day for such purpose. Voters who have such need may apply for voting in advance in accordance with the regulations made by the Electoral Affairs Commission.

(b) The existing Legislative Council Ordinance provides that the election process must terminate upon the death or disqualification of any candidate. This will not only waste the considerable amount of time and money already put in the election campaign by the candidate, the Government and other candidates must put in new resources for a by-election. To minimize the disruption to an election, the Bill proposes a number of amendments to the existing provisions concerned so as to, for instance, allow the Returning Officer to revise the list of validly nominated candidates to allow the election process to continue if he learns that a candidate has died or is disqualified in the period between the expiry of the nomination and the start of the polling day.

(c) In view of the function and work nature of the Privacy Commissioner for Personal Data and the Chairperson of the Equal Opportunities Commission, and also their responsibility to ensure that no conflict of interests will arise in the course of discharging their duties, we propose to amend the existing Ordinance to stipulate that the persons holding the above posts and their staff are not eligible for candidature.

We hope to improve the present electoral laws through the above amendments to make the electoral arrangements fairer, cleaner, more open and more acceptable to the public. The new measures, such as the arrangements for advance polling, are introduced in the hope of facilitating participation by voters, encouraging more people to participate in the election next year and increasing their knowledge about the election. To achieve this, the Government will also mobilize suitable resources for the voter registration campaign in early 2000 and it will spare no efforts in calling on more eligible voters to register.

Moreover, I believe that Members have also noticed that the Bill has not put into effect the proposal made by the Government early last December to allow candidates to put up campaigning advertisements on television and radio at their own expenses. I wish to explain the rationale behind this here. Since the proposal was made public, many views have been expressed by various sectors but the views are very much diversified and no consensus can be reached. Under such circumstances, we think that the conditions are not yet ripe for the implementation of this proposal. Therefore, we do not plan on implementing it in the 2000 election. But we will, after the conclusion of the election for the second term of office of the Legislative Council, review this proposal again to determine whether it should be implemented in future elections.

Although there is still ample time before the 2000 election, there are many important steps still awaiting completion, including the public consultation by the Electoral Affairs Commission on the demarcation of geographic constituencies under the new requirements of the Bill about which recommendations must be formulated and submitted to the Chief Executive by October this year. A whole series of subsidiary legislation must also be amended or rewritten for the implementation of the new provisions of the Bill. Therefore, we hope that the Bill tabled today will be passed before this Council rises in July this year so that the relevant preparatory work for the election can commence on schedule.

Thank you, Madam President.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Legislative Council (Amendment) Bill 1999 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.

ELECTIONS (CORRUPT AND ILLEGAL CONDUCT) BILL

SECRETARY FOR CONSTITUTIONAL AFFAIRS (in Cantonese): Madam President, I move the Second Reading of the Election (Corrupt and Illegal Conduct) Bill.

All along, our elections have been carried out cleanly and honestly which I believe every resident in Hong Kong is rightly proud of. One of the major reasons for this is that we have strict laws forbidding corrupt and illegal conduct in elections. However, owing to the evolution of our electoral system, this law which was enacted in 1955 has become outdated, so there is a need to update a greater part of its provisions to tie in with the election patterns and social conditions of today.

In drafting the new Election (Corrupt and Illegal Conduct) Bill, we have retained all provisions in relation to criminal acts in the existing Corrupt and Illegal Practices Ordinance (CIPO). With the benefit of the experience gained from the election of the First Legislative Council, we decide to express some of the existing provisions in greater details and add in new ones. We have also adopted a simpler and easier from of legal language and a more systematic and meticulous layout, in the hope of making the new Bill clearer and readily comprehensible.

As regards the scope of application, the new Bill will continue using the arrangements of the CIPO which will cover the elections of the Legislative Council, the proposed District Councils, Heung Yee Kuk and also the Executive Committee of a Rural Committee.

Concerning the classification of crimes, the Bill will, just like the CIPO, divide prohibited conduct into two major categories, namely, the corrupt conduct and illegal conduct. Corrupt conduct refers to an intentional act that will produce a direct effect on the election, while illegal conduct refers to illegal conduct that will have an indirect effect on the actual election process and the relation between the nomination of candidates and the polling.

Offences in connection with corrupt conduct can be divided into five major categories. The first is offences concerning candidature. It will be an offence in law to use force, threats or deceit to influence others' standing as candidates.

The second type of corrupt conduct concerns the polling preference of voters. It will be an offence in law to offer an advantage, food or entertainment to, or use force or deceit to influence others' polling preference.

The third type of corrupt conduct is related to polling. A person commits an offence if he impersonates another at an election, votes at an election knowingly that he is not entitled to do so, makes a false presentation to an electoral officer and later votes at the election, or illegally votes at an election more than once. Moreover, to put paper other than a ballot paper in a ballot box, or to deface or destroy ballot papers, or to remove a ballot paper from a polling station are also considered corrupt conduct.

The fourth type of corrupt conduct deals with election donations. The Bill stipulates that a candidate cannot use election donations for purposes other than meeting his election expenses. The candidate must return any unused portions of donations or any portions of aggregate donations in excess of the ceiling allowed to the donor or dispose of them in accordance with the donor's instructions.

The fifth type of corrupt conduct deals with offences in relation to the withdrawal of an election petition or an election appeal. We propose to add a new provision to bar the withdrawal, on account of bribery, of an election petition or an election appeal made to the Revising Officer under the Legislative Council Ordinance questioning the election of any Election Committee subsector.

Illegal conduct can be classified into two major categories. The first concerns with election expenses. With respect to the geographic constituency election of the Legislative Council, all candidates on one voting list must authorize each other candidate on the list as the election expense agents and the candidates must collectively authorize all election expense agents of candidates on the list, the reason being that the election expenses incurred by any candidate on the list will be deemed as for the purpose of contributing to the election of all candidates on the list.

In addition, a candidate breaks the law if the election expenses he incurs exceeds the maximum amount prescribed. Each and every member on a voting list commits an offence if the aggregate election expenses incurred at an election by the group exceeds the maximum amount of election expenses prescribed. But if any of such candidates can prove that the relevant expenses are incurred without his consent and without negligence on his part, it can serve as a defence for him.

The second type of illegal conduct concerns the publishing of false statement. A person commits an offence if he publishes a false statement that a certain candidate is no longer a candidate. Moreover, a person also commits an offence if he publishes a false statement that he himself or another person is a candidate at an election. This is a newly added provision which seeks to address the case that a certain member of a voting list of candidates, after withdrawing from an election, publishes a misleading statement that he is still a member of the list. A person also commits an offence if he publishes a false statement of fact for the purpose of promoting or prejudicing the election of a particular candidate or particular candidates.

Under the existing CIPO, a person commits an offence if he uses the name or device of a person or an organization without the prior written consent of the person or organization, causing others to believe that this former person has obtained the support of the latter person or organization. The new Bill retains this provision, and further specifies that the provision also applies to the logo of a particular person or organization, or the pictorial presentation of a person.

I believe we all agree that publicity plays a very important part in an electioneering campaign. Having learned from our experience, we have included negative propaganda as part of the publicity campaign of an election and we have also redefined an election advertisement as a notice, which can be displayed in any form, that has the effect of promoting or prejudicing the election of a candidate or candidates at an election. This new definition does not include any neutral advertisement for the general promotion of an election such as the message given out by a professional body to its members calling on them to vote at an election.

We understand that candidates may carelessly contravene the statutory provisions owing to inadvertence, accidental miscalculation or other reasonable causes. Hence, the Bill provides a mechanism to allow a candidate, election agent or another person to apply to the Court for an order relieving the applicant from penalties and disqualification that may be imposed on him under this Bill. In addition, the Court may, basing on similar reasons, also make an order extending the time limit for submission of the election declaration form or rectifying the particulars in the declaration form.

Members should be well aware that the first District Council elections will be held in November this year. Therefore, we very much hope that this Bill will be passed in time so as to provide a better regulatory mechanism for the elections and at the same time help the candidates to better understand the relevant statutory provisions.

Thank you, Madam President.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Elections (Corrupt and Illegal Conduct) Bill 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.

CHINESE MEDICINE BILL

SECRETARY FOR HEALTH AND WELFARE (in Cantonese): Madam President, I move the Second Reading of the Chinese Medicine Bill.

This Bill seeks to establish a comprehensive statutory framework for the regulation of Chinese medicine practitioners and Chinese medicines through legislation. The Bill sets down provisions for the registration of Chinese medicine practitioners, licensing of traders in Chinese medicines and registration of proprietary Chinese medicines and other related matters to ensure the standard of Chinese medicine practitioners, and to regulate the use, manufacture and trade of Chinese medicines, in order to safeguard the safety of people who use the medicine and also to lay a sound foundation for the development of Chinese medicine in Hong Kong.

After this Bill is passed, a statutory organization known as the Chinese Medicine Council of Hong Kong will be established, under which there will be two Boards, namely, the Chinese Medicine Practitioners Board and the Chinese Medicines Board. The Chinese Medicine Practitioner Board supervises the practice of Chinese medicine practitioners while the Chinese Medicines Board oversees the use, manufacture and trade of Chinese medicines. Most members of the committees and subcommittees under the Boards will be drawn from various sectors in the Chinese medicine business, realizing the spirit of "self-regulation" of the business. Other members will include government representatives and representatives from other sectors such as the educational sector, so as to ensure that this regulatory body will give full regard to the interest of the whole community.

In respect of the regulation of Chinese medicine practitioners, the Bill proposes to set up a registration system for practitioners engaged in general practice, bone-setting and acupuncture. Under this system, the professional status of the practitioners will be established through the licensing examination, registration and disciplinary systems. All persons aspiring to practise this profession are required to obtain a recognized bachelor degree in Chinese medicine before they can be registered as "registered Chinese medicine practitioners" after passing the licensing examination. After registration, a person must acquire a practising certificate before he can practise Chinese medicine. The certificate is valid for three years and renewable upon expiry. One of the conditions for renewal is that the applicant must have received continuing education in Chinese medicine during the three years. To enable educational and scientific research institutes to engage appropriate Chinese medicine practitioners to perform mainly teaching and research work in Chinese medicine, the Bill provides a limited registration system to enable the persons concerned to engage in the above work in Hong Kong without sitting for the licensing examination. The regulatory framework also includes a disciplinary system to effect due disciplinary action against a Chinese medicine practitioner who violates the code of practice and discipline, which includes permanent or temporary removal of the person's name from the Register of Chinese Medicine Practitioners.

As regards the regulation of Chinese medicines, the Bill proposes to set up a licensing and registration system for the trading of Chinese medicines. The regulatory mechanism includes licensing the retailers and wholesalers of Chinese herbal medicines, and wholesalers and manufacturers of proprietary Chinese medicines as well as registration of individual propriety Chinese medicine items.

In regard to the Chinese herbal medicines, there are listed respectively in Schedules 1 and 2 of the Bill 31 potent medicines and 574 commonly-used medicines. Retailers and wholesalers must acquire the relevant licences before they are allowed to supply or sell the medicines listed in the Schedules. The medicines listed in Schedule 1 may be retailed or dispensed only by prescriptions issued by a registered Chinese medicine practitioner.

All proprietary Chinese medicines manufactured or sold in Hong Kong must be registered. All manufacturers and wholesale dealers of proprietary Chinese medicines are also required to acquire the relevant licences before they can operate.

Moreover, in the framework there is also a disciplinary system for the regulation of Chinese medicine traders. If complaints against a licensed trader or manufacturer are substantiated, the licensee may have his licence suspended or revoked by the Chinese Medicines Board.

Since Chinese medicine has a long history and is widely used in the community, to minimize the disruption to the Chinese medicine business in introducing legislation for regulation of the sector, we firmly believe that we should provide appropriate transitional arrangements for all the existing Chinese medicine practitioners and members of the Chinese medicine business and the proprietary Chinese medicines presently sold in Hong Kong.

As regards the Chinese medicine practitioners, a practising practitioner who has acquired substantial experience through years' of practice or a recognized qualification in this field can be exempted from the licensing examination or registration assessment and be registered as a qualified practitioner. On the other hand, currently operating Chinese medicine traders and manufacturers of proprietary medicines can continue with their operation in accordance with the transitional arrangements. The trading of proprietary medicines already being sold in Hong Kong can also be carried on in accordance with these arrangements until the end of the transitional period.

Details of the transitional arrangements are listed out in clauses 90 to 96, 118, 128 and 138 of the Bill.

The decision to regulate Chinese medicine by legislation was made after protracted studies and extensive consultation. The Preparatory Committee on Chinese Medicine was established in March 1995 to advise the Government on the development and regulation of the Chinese medicine trade in Hong Kong. Their proposals have been adopted after the public consultation and included in this Bill. Therefore, I wish to take this opportunity to express our gratitude to the Preparatory Committee on Chinese Medicine and other individuals and bodies for the many constructive ideas they have provided.

Madam President, I recommend that this Council passes this Bill.

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the Chinese Medicine Bill 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.

MOTION

PRESIDENT (in Cantonese): Motions. Proposed Resolution under the Protection of Wages on Insolvency Ordinance

PROPOSED RESOLUTION UNDER THE PROTECTION OF WAGES ON INSOLVENCY ORDINANCE

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, I move the motion standing in my name on the Agenda.

The resolution seeks to raise the limit of ex gratia payment in respect of severance payment payable from the Protection of Wages on Insolvency Fund (the Fund).

The Protection of Wages on Insolvency Ordinance (the Ordinance) which came into effect in 1985 stipulates that employees who are owed any arrears of wages, wages in lieu of notice or severance payment they are entitled to under the Employment Ordinance (Cap. 57) by their insolvent employers may apply for ex gratia payments from the Fund. The ceilings for ex gratia payments are set out in the relevant provisions of the Ordinance.

Under section 3 of the Ordinance, the Protection of Wages on Insolvency Fund Board (the PWIF Board) has been formed to administer the Fund. The Ordinance also authorizes the Commissioner for Labour to make ex gratia payments from the Fund to those employees affected by their insolvent employers. The PWIF Board comprises a chairman, three representatives each from employers and employees and three public officers. Regular reviews on the payment limits are conducted to ensure that the amount of ex gratia payments can provide reasonable protection for employees. The most recent adjustment was made in February 1996.

We have recently conducted a review on the coverage of the Fund. We found that in 1997-98, over 93% and 97% of the applicants for payments of arrears of wages and wages in lieu of notice respectively could recover their full entitlements. However, in 1997-98, only about 74% of the applicants for severance payment could recover their entitlements in full.

As the vast majority of applicants have been able to recover their full entitlements to arrears of wages and wages in lieu of notice, the Administration considers that the existing levels of protection for these two items are adequate and there is no need to revise their payment limits. Nevertheless, we consider that there is a need to provide better financial relief to employees who are owed severance payment by their insolvent employers. This is particularly important under the present economic climate, because these employees may need more time to secure a new job. A higher sum of ex gratia payment of severance payment will enable them to tide over the unemployment period without having to resort to the Comprehensive Social Security Assistance.

We now propose to increase the limit of ex gratia payment for severance payment, from the existing $36,000 plus 50% of any excess entitlement, to $50,000 plus 50% of any excess entitlement. This proposal, if implemented, will enable more applicants to get the full amount of their entitled severance payment. Even though some will still be unable to recover their full entitlements, they will get a higher level of severance payment from the Fund. Based on our estimation, about 84% of the applicants will be able to get their entitled severance payment in full after the passage of this proposal.

It is estimated that implementation of the proposed severance payment limit will cost an additional $19 million annually in pay-outs. Although the Fund has recorded an operating deficit of over $100 million for the period April to December 1998, the financial position of the Fund is still healthy. As at the end of December 1998, the total accumulated fund stood at $747.5 million which should be able to cope with the additional pay-outs. Therefore, the proposal is unlikely to increase the levy to be paid by employers.

The Labour Department has consulted and received support from the Labour Advisory Board and the PWIF Board. The Legislative Council Panel on Manpower has also given their support to the proposal.

Subject to the passage of the resolution by this Council, we recommend that the revised limit of ex gratia payment of severance payment should become effective on the day of its publication in the Gazette (that is, 5 February 1999).

Madam President, I beg to move and hope that Honourable Members can support this resolution.

The Secretary for Education and Manpower moved the following motion:

"That -

(1) with effect from 5 February 1999 ("the effective date"), section 16(2)(f)(i) of the Protection of Wages on Insolvency Ordinance be amended, by repealing "$36,000" where it twice appears and substituting "$50,000";

(2) the Ordinance as amended by this Resolution shall not apply in respect of a severance payment the liability for payment of which arose before the effective date; and

(3) the Ordinance as in force immediately before the effective date shall apply to a severance payment the liability for payment of which arose before that date as if this Resolution had not been made and passed."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by the Secretary for Education and Manpower as printed on the Agenda be passed. Does any Member wish to speak?

MR LAU CHIN-SHEK (in Cantonese): Madam President, the Hong Kong Confederation of Trade Unions (CTU) supports the resolution to increase the ex gratia payment payable from the Protection of Wages on Insolvency Fund (the Fund). However, I wish to add two points.

First, since the purpose of the Fund is to protect employees, there should not be any ceiling on the ex gratia payment, as this would make it impossible for employees to obtain reasonable compensation and compensation in full. The Fund derives its income from levy on registered companies and may be considered as a kind of collective insurance. Its purpose is to enable employees to apply for ex gratia payment from the Fund to meet their immediate needs, in the event that a company fails to pay wages, wages in lieu of notice and severance payment due to bankruptcy. Therefore, I do not think that there should be a ceiling on the ex gratia payment in principle, since this would prevent employees from obtaining their entitlements in full.

Under the existing legislation, there is a ceiling on ex gratia payment for default on the payment of wages, wages in lieu of notice and severance payment. This resolution merely raises the ceiling on compensation for severance payment. Despite this, over 10% of employees affected by the closure of their companies will still not be able to obtain their entitlements in full. This is extremely unfair to them. Actually, the Fund still has a healthy balance. While the drain on the Fund may increase in this period, the closure of companies will in my view have a greater impact on employees as well due to the poor economy. If the Fund does not provide compensation in full, I believe that employees will find it hard to recover compensation from the employer after the winding-up of the company. As a result, they would be exploited of their wages, wages in lieu of notice and severance payment. This would be a "double blow" to employees who are facing unemployment.

Therefore, the Government should no longer just act as the occasion demands. Rather, it must study again the possibility of lifting the ceiling on ex gratia payment or at least consider raising the ceiling to a reasonable level. Otherwise, Members from the CTU will propose a resolution again to fight for the reasonable rights of employees.

Madam President, another point which I would like to make is about how to protect employees laid off after their wages have been reduced. The Government has said that it would introduce a bill to amend the Protection of Wages on Insolvency Ordinance in the near future, stipulating that compensation for severance payment paid from the Fund will be calculated on the basis of the employee's wages before introducing the reduction, if the employer has made an undertaking in writing before wage reduction. However, as I have pointed out repeatedly, it is unreasonable that an undertaking in writing made by the employer is required before the compensation for severance payment payable from the Fund will be calculated on the basis of the employee's wages before reduction. I urge the Government again to table the relevant bill in this Council as soon as possible. I will also consider introducing an amendment to abolish the requirement for a written undertaking. In other words, compensation payable from the Fund must be calculated on the basis of the wages before reduction under all circumstances, so that employees would not suffer from a "double blow".

Madam President, I so submit. Thank you.

MR ERIC LI (in Cantonese): Madam President, I speak in support of this motion. In view of the extremely poor economy, the drastic increase in the number of companies going bankrupt and the rapid rise in the number of the unemployed, I feel that this motion is quite timely.

Seeing the drastic increase in the number of bankruptcy applicants and companies going bankrupt, I was extremely worried that the Protection of Wages on Insolvency Fund (the Fund) might run into financial difficulty due to such an increase. However, after talking to the Secretary, Mr Joseph WONG, and getting the information, I think that he has convinced me. He told me not to worry for the moment and that the Fund was still financially very sound.

However, I wish to take this opportunity to point out that increasing the Fund's compensation pay-out will only bring about a temporary relief to the whole economic problem. It can only provide some relief to the hardship of the unemployed. Ultimately, apart from awaiting an economic upturn, the Government must see if it can adopt some measures to save some companies on the verge of bankruptcy from going bankrupt, in view of the Fund's finances and the unemployment rate. Does the Government have more positive measures to save people from unemployment?

There is indeed something that the Government can do. At the meeting of the Panel on Financial Affairs on Monday, several colleagues and I discussed a corporate rescue scheme submitted by the Law Reform Commission. Similar schemes have been in force overseas for years and the Hong Kong Government has been studying it for two years. I very much hope that the Government will take a clearer stand with regard to this scheme, because the Government appeared to be not knowing which way to go when the consultation paper was published. Under these circumstances, seeing that the Fund is being depleted of its valuable resources, colleagues from different parties representing employers and employees respectively hope to work together for a common cause. At this moment in Hong Kong, is there not a particular need for a scheme to rescue the enterprises and reduce the number of the unemployed? Some companies fail due to some rash and wrong decisions, even though they may be quite simple mistakes. Other companies are caught in financial straits temporarily due to the sudden financial turmoil. Should they follow the existing law? If so, they would let the banks recover their debts and let the employees make a bankruptcy petition against them after they have repaid the interest and lost all their assets. Is this the best system? Mr LAU Chin-shek has also raised some points. The Fund, founded on its original concept, is unable to cope with such serious economic problems. Under these circumstances, should we not consider the matter at greater depths and conduct a review in order to devise a more comprehensive scheme, rather than simply raising the compensation ceiling to provide some temporary relief and leaving it at that?

I hope that the Government will take a clearer, more positive and bolder stand. I also hope that colleagues in this Council will give greater support to schemes to rescue companies from bankruptcy and reduce unemployment. Thank you, Madam President.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, it is of course good news for some workers when the Administration revises the ceiling on severance payment under the Protection of Wages on Insolvency Fund (the Fund). This is because there is an increasing number of people who need to apply for compensation recently from the Fund due to the large number of companies or organizations which fail to effect severance payment.

The last amendment was made in February 1996, which was more than three years from ago, and today we have this amendment. Indeed during these three years many organizations have folded and many workers laid off. Many among the laid-off workers have not obtained their entitled compensation because the ceiling has not been yet revised. So, I think it is rather unfair to those workers who were laid off during these three years.

On the other hand, the Government estimates that after the amendment about 84% of the applicants who are dismissed will be able to obtain full compensation. Although the figure is 10% higher than the 75% in 1997, we must not forget the base number at present, which is terms of bankrupt companies, is much larger than before. The increase in terms of percentage points is not a good thing for with an increased base and the same percentage points, the number of people who cannot enjoy the benefit of obtaining their full entitlements is large. Therefore, as a colleague said just now, in the long run we must remove the ceiling; otherwise it would be unfair to the workers. Why? Because on the one hand the law prescribes the severance payment entitlements of workers, and yet on the other the Administration cannot give them full compensation. This is unfair to the workers. I do hope the Secretary for Education and Manpower can consider how some improvement can be made in future. I reckon the Secretary would normally say: The present ratio is high enough and 81% is a large number. What can you expect? He may say the Fund was not set up to solve all problems and it only plays a supplementary role. But I think the aim of the Administration in setting up the Fund should be to solve all the problems. If that cannot be done, I do not see any point in setting it up at all.

In addition, there is one more problem. In terms of wages in arrears, the Fund cannot provide full compensation to workers. Just as the Secretary said, over 90% of the workers could now get compensation in full for wages in arrears. However, I could not help wondering why the Administration could not benefit the rest, bearing in mind over 90% of the workers can get full compensation? The amount of money required for this should not be too large and the Fund would not be unduly burdened. Since the Fund has accumulated as much as $700 million, I believe even if the Administration raises the amount of compensation for wages in arrears, it can still well afford it.

So, in this respect, I would urge the Secretary to conduct a review again on the ceilings for wages in arrears and severance pay so that in the event of a mishap workers may get all their entitlements. In fact, Madam President, at the moment when workers become jobless or are dismissed, they would fail to secure employment for a long period. How do they support themselves during this period? They usually live on the so-called severance payment. They would then have to worry less. Nor would they need to rely on Comprehensive Social Security Assistance, which is described as a culprit for "nurturing lazy bones". Indeed the compensation is a reserve. What can workers do if they cannot even obtain the reserve in full? In tackling the problem, we cannot just look at the percentages. We should look at the matter in terms of the actual rights. Since the law confers on the workers their full rights, we should not deprive them of their fair share of the compensation.

Madam President, although I support the amendment as tabled before this Council, I still hope the Secretary can make further improvements. Thank you, Madam President.

MR ANDREW CHENG (in Cantonese): Madam President, I rise to speak on behalf of the Democratic Party to support the resolution. But as many of the Members of the Democratic Party said just now, we have two points to say on the rationale or spirit behind the resolution. We hope the Secretary for Education and Manpower can work harder on these.

First, it is the ceiling on severance payment mentioned by our colleagues. We think the Government's proposal to set a ceiling on the payment is unfair. We hope the Government can let us know the rationale behind this proposal as soon as possible so that we can be convinced. Second, it is the issue of double standards. We have repeatedly indicated to the Government that the so-called guidelines on wage reductions are not legally binding, and under the current tide of wage reductions and retrenchments, employees are not in a position to bargain. The Government just says as a rule that it hopes both labour and management can try their best to co-ordinate and negotiate and indicates that it would certainly not amend the Employment Ordinance for the matter. In other words, only guidelines would be issued. But later we found in government documents that the Government intended to stipulate in the Protection of Wages on Insolvency Ordinance the calculation method for severance payment in the event of a closure or winding-up of a business after wage reduction. In the circumstances, I think the Government is using double standards. I believe due to a need for a clear calculation method for the Fund, the Government is compelled to propose a relevant amendment.

But for those employees whose employers have not been wound-up, who have to suffer repeated wage reductions and who need to face possible layoffs in future, the Government is asking them to try their best to negotiate with their employers. I think in so doing the Government is oblivious to the fact that employees may not have the ability to negotiate given the present economic situation. Therefore, I hope the Government can avoid using double standards. If the Government does propose a relevant amendment to the Protection of Wages on Insolvency Ordinance, I very much hope it can simultaneously propose a relevant amendment to the Employment Ordinance in those parts concerning calculation of severance payment and long service payment, including the situation in which an employee's wages have been reduced repeatedly within a period of one to two years.

In addition, as the Honourable LAU Chin-shek said, the amendment would give rise to a loophole if the Government can only confirm an agreement in writing between labour and management. Another loophole is that the Government would take the last agreement on wages for calculation. In other words, if an employee's wages have been reduced repeatedly in the last 12 months, the calculation of the ex gratia payment of severance payment will be made on basis of the last agreed wages. I do not think this is fair either. Obviously, if wages have been reduced repeatedly, the last one which is also the most recent one must be the lowest. Why does the Government want to take the last one but not the first one? Therefore, I hope the Government will make suitable amendments to the Protection of Wages on Insolvency Ordinance when it tables a bill for the matter before this Council. Such amendments should have incorporated the opinions of Members, be appropriate amendments about the written undertaking and the last written undertaking mentioned by the Government, rather than "half-baked" amendments. Thank you, Madam President.

MISS CHAN YUEN-HAN (in Cantonese): Madam President, the Hong Kong Federation of Trade Unions (FTU) supports the resolution tabled by the Government today. We have been holding the view that the Government should raise the relevant amount of payment and that is why we support the resolution. But we are also a little bit disappointed. Perhaps the resolution was the result of discussions held quite a while ago, without taking into consideration the recent developments which therefore seem not to have been reflected in the resolution. For instance, just now several colleagues in this Chamber mentioned about wage reduction events in the year and some new problems have arisen. We are now telling the Government we expect some of the companies which have been cutting wages and welfare benefits for their staff in the past year will probably close after the Chinese New Year. How is the Government going to cope with this situation?

Why am I stressing this point? Because in dealing with numerous cases of such nature, I asked the Secretary for Education and Manpower and other officials: When that situation arises, what would be used as the base for calculating the wages on insolvency? After some repeated follow-up efforts by us, the Government now says written undertakings would have legal effect. But I must tell the Government that in all the labour dispute cases that I have handled, the most difficult are those relating to reductions in wages and welfare benefits. In labour disputes of such nature, very often the cause is poor business, leading to massive reductions in wage and welfare benefits and hence labour disputes. Under such circumstances, it is futile to ask workers to demand their employers to put everything down in black and white. Employers will simply refuse to do so. Take the example of a case I handled recently, involving the Kwoon Chung Motors Company Limited, a non-franchised bus company. The whole process lasted over half a month. During that time, I was saddened and felt helpless. Saddened because I witnessed the dichotomy faced by workers who needed to keep their jobs and fight for their interests at the same time. Only when the Government puts itself into our shoes will it understand the dichotomy. It is difficult, even very difficult, for workers to force their employers to state in black and white the original wages and to agree to compensate them on basis of the original wages in the event of a dismissal.

Many workers were afraid that they would either be dismissed at once or regarded as having refused the terms proposed to them as soon as they made such requests. In the past year, there have been numerous incidents of wage reductions. What I would like the Government to face squarely are the following issues. To begin with, it is the issue of compensation for wages on insolvency. How can we provide protection for our workers? Workers who have black and white contracts will of course receive protection. But if they do not have them, what can they do? I am of the view that the Government must think about this issue now. It should not wait until after the Chinese New Year when the problems arise.

Madam President, given the present economic climate, workers are helpless. The Government must lay down more laws, including the setting up of an advance payment fund on insolvency, to protect them. I hope that after today's resolution, the Government will put forward another resolution, in the light of the reductions in wages and welfare benefits in the past year to suitably amend the Protection of Wages on Insolvency Ordinance. Failing this, I am worried that problems will arise when workers go in large numbers to apply for ex gratia payments when companies close down after reducing the wages of their workers. Even if the ceiling is raised to $50,000, problems will still arise when the Government effects payments on basis of their reduced wages. I hope the Secretary will understand the position and I also hope the Government will draft the next amendment without delay and table it for discussion.

Madam President, on behalf of the FTU and the Democratic Alliance for the Betterment of Hong Kong, I support the resolution tabled today. Thank you.

MR LEE CHEUK-YAN (in Cantonese): Thank you, Madam President. Our Chairman, the Chairman of the Hong Kong Confederation of Trade Unions, said a short while ago he supported the resolution. So, I am not going to say too much.

However I must tell the Secretary for Education and Manpower that I consider this resolution rather rare. In July, I requested that the ceiling on the severance payment be increased to $44,000. For the first time, and the Government seldom does something like this, the amount finally agreed upon by the Government exceeded that which I requested. This was a good start and I hope more similar cases in future may turn out like this. I hope the Government can be more aggressive than I so that I will look more moderate or even conservative. This is really a good start and I hope Secretary WONG can do it again in future.

Despite the higher-than-expected severance payment ceiling proposed by the Government, I still find the situation in respect of wages in arrears and wages in lieu of notice disappointing. I cannot understand why the Government does not amend the amounts which have been in force for two years. In fact, there are still many cases, up to 6% of the cases, in which workers fail to get back their wages in arrears. This is utterly unreasonable. This is unfair to workers because workers labour for wages but in the end they cannot get them. This does not stand to reason. So, I hope the Secretary for Education and Manpower can refrain from holding a conservative perspective; he should be more aggressive than I am. I suggest a ceiling of $44,000 for the payments and the Government can propose a ceiling higher than that. I hope the Secretary can make amendments as quickly as possible in this connection. On the other hand, I do not want the Government to make it a habit to require us to make demands every one or two years. I hope instead the Government can take the initiative to make proposals for raising the ceilings of the severance payment one year later.

As regards the second issue, I am glad that the Director of Administration is also here. I have spoken to two relevant departments about some unresolved cases and I hope they can be resolved as soon as possible. These are cases in which applicants applied for compensation from the Protection of Wages on Insolvency Fund (the Fund). In doing so, they had to go through the Legal Aid Department but they could not satisfy the means test of the Department. As a result, they could not obtain payment from the Fund. I do not think this makes sense at all because it is just unreasonable to ask people who wanted to recover $30,000 to $40,000 or even $100,000 to pay $40,000 in legal aid costs just to achieve the recovery. The workers were recovering their own wages but they were required to pay the Legal Aid Department for the recovery. The Department, having been paid, would probably not proceed with the matter as it thought the proceedings would not be profitable. It would not apply to wind up a company for a small net gain. As a result, a number of cases are held up at the Department. Administratively speaking, the cases have been labelled pending cases but I think the most effective way of dealing with the cases is to ask the Labour Department to handle the cases directly so that payment is made by the Fund, to obviate the need of having to go through the Legal Aid Department and satisfying the means test. I trust this is the most radical way of solving the problem in order to save workers the trouble of having to scurry between several departments. Thank you, Madam President.

MR HO SAI-CHU (in Cantonese): I have listened to what several other colleagues have said about adjustments in the amount of compensation payable from the Protection of Wages on Insolvency Fund (the Fund). They all supported the adjustment in severance payment. We in the Liberal Party also support the adjustment, but at the same time we hold some views similar to those mentioned by the Honourable Eric LI a while ago.

Firstly, we are concerned about the upward adjustment of the compensation paid out of the Fund. If the trend continues, will there be sufficient money to pay? We must understand there is now over $700 million in the Fund. But if workers fully recover all the three categories of compensation: wages in arrears, wages in lieu of notice and severance payment, each will get a maximum of $200,000. The total amount in the Fund can only support 3 500 workers if they are to get the maximum of $200,000 each. Members have spoken on the large number of companies which may go bankrupt in future and many workers may apply for compensation from the Fund. So, if we increase the amount of Fund compensation too quickly, this may not be fair to those workers who apply for compensation from the Fund at a later stage. We must understand that a major reason for setting up the Fund is to help those workers with their livelihood in the short term during which they cannot find new jobs as a result of their companies going bankrupt. The Fund is not meant to pay workers their full entitlements. The spirit of the Fund is to make ex gratia payments, not full compensation on behalf of the insolvent company, to workers.

Second, I would like to let everyone know there is an issue which we have been discussing for a number of years and about which we have to be careful. If workers can get full compensation through the Fund once a company becomes insolvent, there is a danger that workers may conspire with a company on the verge of bankruptcy so that the employer can take away all the money before declaring itself insolvent. Then the Fund will have to pay in full what the insolvent employer has to pay. This is a very important point. If there is a difference between the amount owed and the amount payable, workers may at least exercise some vigilance against their employers to make sure that they do not cheat in this manner. Of course, some may say people do not in fact cheat in this way, but that is another issue. We must take the possibility into our consideration.

Third, although some may say we are being unfair to workers, which may be true from a certain viewpoint, I can tell everyone with confidence it is even more unfair to some employers. This is because the Fund is now financed by successful businessmen. Those employers who fail in their business cannot make any contributions but it is the Fund that compensates the workers for the failed employers, whose failures are thus being covered by other companies. Therefore, I hope everyone can understand it is not always possible to be 100% fair to all parties. Most of the time, we need to find a balance when we lay down the rules.

Thank you, Madam President.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, I am very grateful to Honourable Members for speaking in support of this motion. I hope that Members of the Legislative Council will keep up this fine tradition and continue to support the motions or legislation proposed by the Education and Manpower Bureau in future.

Just now, Mr LEE Cheuk-yan was particularly appreciative of the fact that the present proposal of the Government is an improvement on the former proposal. Actually, it shows the Government's understanding for employees who fail to obtain sufficient severance payment due to bankruptcy of the company and that it has taken the recent economic situation into account. However, this does not mean that the my bureau's proposals could coincide with Mr LEE Cheuk-yan's suggestions every time or be better than his suggestions. Since our present proposal is more desirable than Mr LEE's proposal, we hope that he would still support us in future even if our proposals are less favourable than his.

Members have raised several questions, which I would like to respond to briefly. The first point is about the ceiling on the ex gratia payment payable under the Protection of Wages on Insolvency Ordinance (the Ordinance). Several Members suggested that there should not be any ceiling. I believe that it is a question of principle and that we need more time to discuss it. Just now, Mr HO Sai-chu pointed out that the spirit of the Protection of Wages on Insolvency Fund (the Fund) was embodied in the ex gratia payment. He also said that the employers who paid the levy were not the bankrupt employers. In other words, employers who are not bankrupt pay the levy to ensure that the Fund can make ex gratia payment to employees whose employers have gone bankrupt.

Another point is in my view also worthy of note. In my earlier speech, I pointed out that the Fund had a deficit of over $100 million from April to December 1998. In the long term, there will be deficits in this financial year and the next two financial years, with each year's deficit being over $100 million. Therefore, we have to prudently supervise the operation of the Fund. Otherwise, if the Fund goes broke, it would be disastrous indeed.

Another point is the corporate rescue scheme proposed by Mr Eric LI. I have heard his view. However, I think that we could discuss this proposal at an appropriate time.

One point has a greater bearing on the Ordinance and that is, how the Government should amend the Ordinance to ensure that severance payment in the event of the bankruptcy of a company will be calculated on the basis of the wages before wage reduction, if its employees had to accept such reduction before bankruptcy, and the employer undertook that any severance payment would be calculated on the basis of the wages before reduction. The crux of the matter seems to be a question asked by Members: Why is that a written guarantee or written agreement is made the basis for the current amendment to the Ordinance? With regard to this, we have to refer to the guidelines on the protection of wages on insolvency. The guidelines mention that the Government expects employers to make a written undertaking if they agree to this arrangement. Actually, the guidelines are meant to protect the employees, because in many cases, a dispute between employer and employee could be avoided if there is a written agreement. Moreover, if the matter is taken to the court, it would be easier for the court to make a judgment. Although strictly speaking, oral agreements are also legally recognized, many disputes will still arise if there is not a written one. However, this has little direct bearing on today's motion. Therefore, I do not intend to talk about it at length. We will no doubt have a chance to discuss it later. Members of the Legislative Council will not let us off so easily. We will certainly have a chance to discuss this issue.

Lastly, I thank Members for supporting this motion.

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

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

MEMBERS' MOTION

PRESIDENT (in Cantonese): Members' motion. Motion with no legal effect. In accordance with Rule 36(5) of the Rules of Procedure, each Member will have up to 15 minutes for his/her speech.

Today we will continue to try out the electronic queuing system for speaking in respect of debates on motion without legal effect. Members who wish to speak in the debate on the motion need, in addition to raising their hands, indicate the wish by pressing the "Request to speak" buttons.

PRESIDENT (in Cantonese): Motion: Report of the Select Committee.

REPORT OF THE SELECT COMMITTEE

MRS SELINA CHOW (in Cantonese): Madam President, I move the motion which has been printed on the Agenda. On 21 September 1998, when Mrs Anson CHAN gave evidence at the hearing of the Select Committee, she was asked why the Airport Development Steering Committee (ADSCOM) had not considered the two critical items, namely the Flight Information Display System (FIDS) and Hong Kong Air Cargo Terminals Limited (HACTL), before the decision on deferring the airport opening date to June 1998 was taken, Mrs CHAN said, and I quote, "If I had known at the time that the investigation committee would deliberate on this document in such detail, I would have asked for the minutes to be much more detailed."

When Anson gave evidence a second time to the Select Committee on 12 December 1998, she was quizzed again, this time on the contradiction between her assertion to the Select Committee that the Airport Authority (AA) was left to decide on its own affairs and minutes of the ADSCOM which recorded regular instructions issued directly by the ADSCOM to the AA management, Mrs CHAN replied, "If I had known there would be today's investigation committee, I would have been much more cautious with the minutes."

I do not know whether Mrs CHAN meant that the minutes were lacking or that they did not accurately reflect the true situation. I do know that the Select Committee was grateful that we had such excellent records of the ADSCOM's meetings, without which the truth that we have managed to unravel would have been much more cloudy.

Some commentors suggested that civil servants are worrying that in future they would not be able to speak frankly without the protective shield of confidentiality, and our investigation might have taught them the lesson that they should cover their back when they speak at such forums.

I hope this is all conjecture, for it would be a sad day if our top civil servants, who have always proved themselves as an elite force, would fail to own up to their accountability. Public expectation of them is high. They are given the authority that rightly belongs to the executive. Therefore they have to shoulder the responsibility, and equally the blame for mistakes made.

There is no doubt that the Select Committee Report has broken new grounds, and sent shock waves through the establishment. I have to confess that I was taken by surprise on many counts. I was totally unprepared for the overwhelming public endorsement of our Report. I accept that there has been criticism of our majority decision not to include penalties in it, but by and large, it has been welcome as the true reckoning of the airport opening fiasco. I should have guessed. During the process of the investigation, the Committee has worked hard and argued fiercely to come to the collective consensus that you now see. Collectively, we have in fact successfully reflected the community's wish in the pursuit of the truth.

There was never any doubt in our minds from the very beginning, although remained unsaid until we started writing the Report, that the blame for the shame Hong Kong felt on Airport Opening Day (AOD) had to be apportioned to the key individuals who had a hand in the decision and should therefore shoulder the blame of the subsequent chaos on the day. We should be failing our duty if we were to shrink from this task. It was what was expected of us. We carried it out, without fear or favour.

What also surprised me was the strong and displeased response from officials who have been criticized. They sounded defensive, and implied the Committee has acted unfairly against them. The Chief Executive came to their defence by announcing that no individual civil servant need to be held responsible. While I remain totally open-minded about any views or information that officials might like to put forward to counter our conclusions, I cannot agree with the Government's attitude towards the Select Committee's approach. Mr TUNG will have to understand that naming names is not being personal. It is pinning down responsibility, and blame, where it belongs, on each and everyone of those individuals vested with the authority and duty to make decisions or execute actions. Such principle of fairness applies to all good management. Why should the Government be exempted?

I have to admit I was disappointed with the official reactions, in particular that of the Chief Executive, Mr TUNG Chee-hwa. While admitting that he had not studied our Report in detail, he stated unequivocal endorsement of the Commission's Report. I hope by now this apparently entrenched position have changed. Now that he has had the time to discover the merits of our Report, he would take appropriate action expected of the Government.

It is an indisputable fact that the airport project had to weather the turbulence of Sino-British discord during its embryonic stage, which could have been caused delays in the process. However, from the records presented to the Select Committee as evidence, many of the causes of the problems on airport opening were man-made. The AA top management did not fulfil its responsibility in getting the airport ready for opening. The AA Board failed to resolve the management problems it knew only too well by putting the right people in the right jobs. Instead it tried to take over without full understanding and the necessary expertise. The ADSCOM was aware of the fundamental management problems early on, but chose to rely on incompetent managers in spite of being repeatedly let down by them. Fairly classic formula for disaster!

But these bodies are made up of people, and led by individuals who command high authority over the rest. The structure, the documentation of discussion held and decisions made, as well as evidence given by witnesses during our hearings gave us a very clear picture of what they said and did. Should we, as a body representing the pubic, withhold this from the public?

Some of the individuals, against whom criticizm has been made in the Report, sounded hurt. They felt, since they had put in so much effort into the project, some of them on a voluntary basis, they had been wronged by the Select Committee's harsh comments about them. I hope they would eventually see that while effort should be appreciated, and we have been careful to mention it when it is warranted, nevertheless no one is infallible. Sometimes trying one's best is not quite good enough.

Mrs Anson CHAN has publicly posed the question why the Select Committee concluded that she has special responsibility for the decision of the AOD. Although the Report has dealt with that in same detail, I would like to clarify for the record that since she had impressed on everyone in the AA that the decision on the opening date was irreversible, she had positioned herself as the only person who could change it. As she told the Select Committee that she would not hesitate to defer the date if there were any indication that the airport was not ready to open, she would have had the sole responsibility to establish the airport's readiness for opening. This is the special responsibility that our Report considers Mrs CHAN has to shoulder.

During the hearings, and subsequently in response to the Select Committee's Report, various government officials have repeatedly made the point that the AA is responsible for its own affairs, and that the Government did not give orders, nor did it bypass the AA Board. The truth is the ADSCOM, as the sole shareholder of AA, constantly dealt directly with the AA senior management, who, in the run-up to airport opening, attended almost all the ADSCOM meetings to Report on progress.

Instructions were handed down to the AA Management, sometimes relating to quite detailed arrangements: For instance, in the ADSCOM's meeting of 20 September 1997, the Chairman instructed the CEO/AA to provide a concise paper setting out all the critical issues that were essential for the new airport to open on 1 April 1998. In the ADSCOM's meeting of 1 April 1998, the Chairman asked for a checklist of the systems that would be available in the first week of May for the following meeting.

This is by no means a practice only adopted for the last stage of getting the airport ready for opening. As early as August 1996, the ADSCOM's chairman already made it clear that the Government should have a role in the control of the AA Management. I quote: "The chairman said that long experience had indicated that we would not get anywhere talking to the CEO/AA; we ought to institute a system for reviewing AA claims and ensuring that the AA Management would agree lines to take with the Government, its sole shareholder, before briefing the AA Chairman and Vice Chairman."

There has been comments that HACTL has been let off lightly by our Report. I have to admit that we did not subject HACTL to the same degree of microscopic examination as the AA. However I believe our decision not to be drawn into the highly technical controversy of the territory of computer software was the right one. Suffice it to say that HACTL failed to live up to its promise of providing cargo service on airport opening, and have to be held fully responsible for Hong Kong's financial loss and damage in reputation in the process.

There has been allegations raised in some quarters that I feel obliged to answer as the Chairman of the Select Committee. It has been suggested that since we did not circulate allegations against various parties before we included them in the Report, we have not been fair to these bodies or individuals, since we did not offer them the opportunity to put forward their side of the argument.

In fact, the Select Committee gave this point detailed consideration, and sought legal advice in doing so. The procedure we followed is established practice of all other Select Committees set up by this Council, that is, during hearings, Members put questions to witnesses for the purpose of exploring as many aspects to the facts borne out by evidence as Members consider necessary, and based on all the evidence gathered, arrive at conclusions contained in the Report.

Today is the day that I have been looking forward to for weeks, not only because it signifies an end to the long hours of hard work and stressful debate, but also because Hong Kong has taken a step forward in learning the lessons from mistakes made in a monumental project. Some people have doubts as to whether all the efforts and expenses, which run into million of dollars, are worth it. I would hope so. The value is there for us to exploit. Each involved party has its role to play. Follow-up action is expected not only on the airport project, but more importantly on how the Government will change for the better as a result of lessons identified, and how this Council will hold the Government to this course. But if the Government, or the community for that matter, take the regrettable path of letting ourselves be tied down by continuous arguments about who should or should not be blamed, then not only the Council's, but all three inquiries would have lost their meaning.

Madam President, before I close, I would like to voice my gratitude to my colleagues on the Select Committee for having contributed so much to the entire exercise. But I am totally convinced that we would not have been able to produce what we did within the limited resources available to us without the selfless and dedicated professionals of the Legislative Council Secretariat. I would also like on behalf of the Committee, to express our appreciation to Miss Margaret NG for the extraordinary efforts and time she has put in to enable us to complete the Report.

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

Mrs Selina CHOW moved the following motion:

"That this Council endorses the Report of the Select Committee to inquire into the circumstances leading to the problems surrounding the commencement of the operation of the new Hong Kong International Airport at Chek Lap Kok since 6 July 1998 and related issues."

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 Mrs Selina CHOW, as set out on the Agenda, be passed.

Will Members who wish to speak please raise your hands and press the "Request-to-speak" buttons.

MR LEE WING-TAT (in Cantonese): Madam President ...... Mr Deputy (Laughter), the Democratic Party endorses the Legislative Council inquiry Report on the new airport as a whole. In simple, clear and direct terms, the Report tells the people of Hong Kong the causes of and the parties responsible for the chaos surrounding the commencement of the operation of the new airport. However, the Democratic Party still considers the Report lacking in that it has made no suggestions for the punishment of those persons and public officers who have made mistakes. And because of this failure, the Report has come under criticism from the public.

Apart from a system with clear definitions of authority and responsibility, a responsible and accountable community also requires a fair system of rewards and punishments. Otherwise, the so-called "collective responsibility" would only end up as "collective irresponsibility". Since the Select Committee has sufficient evidence for pinpointing the causes of and the parties responsible for the chaos of the airport, the Report should in my view include suggestions for the punishment of those who have made mistakes. I have consulted the Legal Advisors of the Legislative Council on the inclusion of suggestions for punishment. Their answer was that this would not exceed the Select Committee's terms of reference. I do not agree that demanding to punish those who have made mistakes is being personal. Since "it is human effort that counts", when something goes wrong, how can no one be held responsible? If the Government of the Special Administrative Region (SAR) does not punish those officials who have made mistakes, how can it demonstrate to the people that it is ready to shoulder responsibility and be accountable to the public? Therefore, I moved in the Select Committee that the various public officers and the top management of the AA be punished. However, this suggestion was negatived since it had the support of only two members, namely Mr SIN Chung-kai and Miss Emily LAU. I am disappointed about this.

However, what is more disappointing is that the Chief Executive, Mr TUNG Chee-hwa, and the various public officers have turned a cold shoulder to the Legislative Council's inquiry Report. Without having read the Legislative Council's inquiry Report, Mr TUNG hastened to declare that Justice WOO's Report had great credibility and authority. Obviously, he was using Justice WOO's Report to discredit the Legislative Council Report. However, according to the Basic Law, the executive authorities shall be accountable to the legislature. Actually, in order to be accountable to the Legislative Council, Mr TUNG should have taken the Legislative Council Report and its recommendations more seriously. Instead Mr TUNG has given weight to the Report compiled by Justice WOO who is appointed by himself, to the neglect of the investigation conducted by the Legislative Council in exercising its power of supervision. This goes completely against the spirit of the executive authorities being accountable to the legislature. As to which inquiry Report has greater credibility, it is not up to the subjective will of Mr TUNG. After the release of Justice WOO's Report and the Legislative Council Report, a newspaper commissioned the Chinese University to conduct an opinion survey. The result of the survey showed that 55% of the people endorsed the Legislative Council Report, while only 12% endorsed Justice WOO's Report. The Government should have a clear idea about which Report has greater credibility. If Mr TUNG continues to use Justice WOO's Report as a "shield", while making light of the inquiry Report prepared by the democratically elected Legislative Council, or even trying to reduce its influence with comments like "not authoritative or convincing enough", it would only further undermine the prestige of the SAR Government.

Both Mr TUNG and Mrs Anson CHAN, Chairman of the ADSCOM, have emphasized that no individual public officer should be held responsible. This just shows that in the current bureaucratic culture, the "collective responsibility" of civil servants is equivalent to "collective irresponsibility". That Mrs CHAN has apologized to the public only after severe criticism from the public demonstrates a total lack of readiness to bear responsibility. If Mr TUNG fails to introduce an accountable culture and continues to allow public officers to "make mistakes as before", mistakes for which no one is held responsible and punished, the public's discontent with the SAR Government will only further proliferate.

Moreover, Mr TUNG is at the time planning to reform the civil service system and mete out more severe punishment to middle and lower ranking civil servants who are indolent in duty. However, in the chaos surrounding the new airport, Mr TUNG has gone out of his way to protect senior officials who have made mistakes. How can such a feudal culture of "sparing the senior officials" convince the middle and lower ranking civil servants and the public? Early this week, a newspaper published the results of a survey on the degree of the public's satisfaction with the Hong Kong Government and the principal officials. They showed that the percentage of people satisfied with the Government had dropped to a new low of 17%. Let me offer Mr TUNG a piece of advice. If the SAR Government continues to act against public opinion, it will only lose its credibility and the people's trust.

It is reported in the press today that Miss Cyd HO of the Frontier will ask the ADSCOM Chairman Mrs Anson CHAN to resign. The Democratic Party does not agree to this suggestion, since Mrs Anson CHAN has made both right and wrong decisions in the issue of the airport. At the end of 1997, the AA and the Secretary for Works called for the commissioning of the new airport in April 1998. After making an objective assessment, Mrs CHAN postponed the date to July despite objections from all sides. This decision should be lauded. However, having prescribed the commencement date of the new airport in July, she slackened in her supervision and was blind to the many obvious signs that the new airport was not ready. This was a blunder. Mr Deputy, if a civil servant is asked to resign even though he has done both right and wrong, this is not meting out rewards and punishments fairly. It would only give rise to a situation where people would avoid making mistakes by doing less or doing nothing at all. It was also a pity that Miss Emily LAU of the Frontier did not bring up the suggestion of "asking Mrs CHAN to resign" in the Select Committee. On the whole, the Democratic Party sticks to its view expressed in the Select Committee, that is, Mrs Anson CHAN has done both right and wrong and should be criticized.

Apart from apportioning blame for the chaos of the new airport, it seems to me that the Report has brought out several important issues about which we should take note of and reflect on. First, under the multiple supervision of the ADSCOM, the New Airport Projects Co-ordination Office (NAPCO) and the AA, the new airport projects were still inadequately supervised. Second, being overambitious, the AA and government officials insisted on the commencement date of July, turning a blind eye to the fact that the new airport was simply not ready. The result was a shambles at the commencement, turning the event into an international laughing stock. Third, the AA Board is actually a political freak born out of the Sino-British dispute. Since Board members must have the trust of the Chinese side, they were appointed without considering whether they were prepared to undertake the responsibility of supervising the enormous new airport projects. In the end, not only did the Board fail to discharge fully its supervisory functions, it was led by the nose by senior AA executives and failed to live up to the people's expectations. Last but not least, the authority and responsibilities of the ADSCOM and the AA as well as the relationship between them are unclear. When problems arose, neither took serious action. When the fiasco occurred, each tried to put the blame onto the other and no one wanted to assume responsibility.

The various problems mentioned above have revealed the contradictions and loopholes in the Government's executive and supervisory systems, as well as the inadequate accountability of statutory bodies. If the SAR Government has really learnt its lesson and hopes to ensure that the mistake will not be repeated in future large infrastructural projects in the future, it should seriously review the structure of such statutory bodies. Moreover, it should conduct a study on how an effective supervisory system can be established to balance the powers of statutory bodies as well as enhance the transparency of their operation and their accountability to the public.

After the release of the Report of the Legislative Council's Select Committee, the AA has set up an ad hoc group to follow up the matter. However, the AA has made a mistake again by including Billy LAM and KWOK Ka-keung who are named for criticisms by the Legislative Council, as well as Board members Maria TAM and Peter WONG who should be held responsible for the chaos of the new airport in the five-men group. The AA's investigation conducted by its own people is neither independent, nor can it gain credibility among the public. I suggest that the AA should appoint another independent investigation group to follow up the recommendations of the Legislative Council Report.

Lastly, with regard to the chaos surrounding the new airport, there are in my view two important recommendations that the SAR Government must consider. First, the SAR Government should establish a sound system to ensure that government officials are held accountable for their acts. Rewards and punishments should be meted out fairly to all civil servants, including the three principal secretaries, and heads of bureaux and departments. Those civil servants who are responsible and have good performance in their duties should be rewarded by public commendation and promotion, while officials who perform poorly or who are negligent in the performance of their duties should be punished by open criticism, reprimand, by reducing their chances of promotion, by demotion or even dismissal. If the Chief Executive merely sides with those who have made mistakes and repeats that "no individual public officers should be held responsible", it would only further lower the prestige of the SAR Government. It would not contribute to the establishment of a sound system for enhancing the accountability of government officials which is a consensus in the community.

Second, the Government should carry out a comprehensive review of the composition and appointment methods of large statutory organizations, such as the AA, the Hospital Authority, the Mass Transit Railway Corporation, the Kowloon-Canton Railway Corporation, the Housing Authority (HA) and the Land Development Corporation. These statutory bodies are responsible for formulating policies on housing, transport, health and airport services which have tremendous impact on people's lives. But while these organizations have extensive powers of policy formulation, they need not be accountable to the democratically elected Legislative Council. They have become "independent kingdoms" that come under nobody's jurisdiction. Such is their "hereditary feature". Apart from the need to enhance the transparency of the operation of these organizations as well as their accountability, the powers of appointment should also be regulated by a balancing system, so that the persons appointed not only should meet the Government's requirements, but also the public's expectations. In 1996, the Democratic Party introduced a Housing (Amendment) Bill, urging the Government to obtain the Legislative Council's approval in making appointments to the HA. Vesting the power of appointment and the power of approval separately in the Chief Executive and the Legislative Council is one way of division of power to achieve checks and balances. In the United States and in Taiwan, the appointment of senior officials must be approved by parliament. Even the appointment of the premier in the Mainland must be approved by the National People's Congress. The Democratic Party will consult the public on the above-mentioned suggestion and will consider introducing a Members' Bill to amend the appointment methods of the AA.

Mr Deputy, I have suggested in the House Committee that after a careful perusal of the three Reports, the Chief Executive, Mr TUNG Chee-hwa, should at the request of the House Committee come to the Legislative Council to answer Members' questions. This is because the public expects the leader of our executive authorities to comment on these three Reports and propose follow-up actions to the various recommendations. This is how the executive authorities should be accountable to the Legislative Council. I hope that Mr TUNG Chee-hwa will accede to the House Committee's request.

With these remarks, Mr Deputy, I support the motion.

MR LEE CHEUK-YAN (in Cantonese): Mr Deputy, we may recall that after the big chaos upon the opening of the new airport, demands were made for conduct of investigations and there were three sources. Some therefore questioned why there were so many sources. They were of the view that since the Government had decided to commission an independent commission for inquiry, it was not necessary for the Legislative Council to investigate any more. At that moment, I was also carried away by the thought that since the independent Commission of Inquiry on the New Airport (CINA) was a commission set up under the law, it should be very much independent. Was it necessary for the Legislative Council to conduct another investigation? But when the Report of the Commission was completed today, it proved my hesitation was unnecessary. Obviously, the Report by Justice WOO is a shield for the Government. It covers up the failure to discharge their responsibility on the parts of the Government and individual public officers. The Chief Executive's response to Justice WOO's Report was: "After reading Justice WOO's Report I do not think any public officer should be held personally liable. As regards punishment for any officer, we need to see which Report is more convincing. Justice WOO's Report is surely superb in terms of credibility and it is convincing as the Report was the product of a statutory procedure." What the Chief Executive said about the credibility of the Report has spoiled everything. Are we to believe the Report of the Commission, which is supposed to be independent? The sentiment of the community is that after comparing the several Reports, they think Justice WOO's is the least credible. This has turned into a problem not just for the Report under discussion. This has become a problem for all independent commissions of inquiry set up by way of a statutory procedure. This is my biggest worry in this issue. Are we going to have confidence in such Reports in future? Furthermore, Edgar CHENG became a member of the Central Policy Unit in the process. So he is one of the them in the Government. Thus the credibility of the Report has further diminished.

I would like to talk about the Report itself. Indeed we can see that the Chief Executive has used the Report as a shield. And in this he has employed three tactics which I doubt if they are convincing. First, the definition of "responsibility" was narrow. What did the CINA use as a definition? It was one close to a judicial context, that is, it was not a broad, policy or political one to delineate the scope of responsibility. Their definition was that a person should not be held liable unless there is sufficient evidence to prove that the individual officers have caused the failures out of "bad faith" or "misconduct". I believe all those involved had not acted out of "bad faith". If "bad faith" was the only criterion for responsibility, then I think it is not what the public expected. The public is expecting a less narrow definition of the term "responsibility". The public expects all of them to be held responsible. In finding out the responsibility of those concerned, I do not think anyone is acting in bad faith. What we want to find out is who should be held responsible politically. The narrow definition of "responsibility" in Justice WOO's Report was well-thought out to save the Government from the predicament, but in doing so Justice WOO has not only failed to pacify the dissatisfaction of the people but also undermined the credibility of the entire Commission.

Second, to sweep the case under the carpet, the idea of "collective responsibility" was used. In the Report, Justice WOO explained the management of the AA had specific powers and duties. Therefore they can point out who has failed in his or her responsibility. But the Boards of Directors of ADSCOM, the NAPCO and the AA are collectively responsible. Leaders of these bodies are not necessarily responsible for the chaos. Justice WOO pointed out that if we need to identify the individuals of these bodies who should be held responsible we need to give the persons concerned a chance of defence. We need to study the structure of these bodies and it would take some time for the hearings, he said. We may recall he had said on the television that six months were not enough, but six years. After spending over $20 million, he was saying it would take six years to find out who should be held responsible. I believe the public would think Justice WOO's Report lacks credibility.

The third way to relieve ADSCOM of its responsibility is to specify the ambit of the role it played. I call it the ambit within which one "waits for the whistle". In Justice WOO's Report he pointed out: "...... if sufficient weighty material was proffered, the Commission has no doubt that ADSCOM would certainly consider whether deferment was necessary...... No one ever suggested a deferment or put situations before ADSCOM that would, at the time, justify a revisit of the decision." Therefore the Commission was of the view that it would be unreasonable to hold the ADSCOM responsible. That is to say the responsibility of the ADSCOM was simple: it need only wait for other people to blow the whistle. If no one blows the whistle it would have no responsibility. If that is the case its supervisory responsibility is simple. All it has to do is to wait for the whistle. If no one blows the whistle and say there is a problem, then it has discharged its supervisory function. This is Justice WOO's way of putting it. Is everyone convinced? Are people convinced? Even Mr Benjamin YU, Senior Counsel for the Commission does not hold that view. He said: "There were many documents that all parties could obtain but no one placed emphasis on them or followed up on them closely. Although the ADSCOM was misled by the AA on the matter concerning the preparation of the Flight Information Display System, it did not mean the ADSCOM could take the matter lightly. Under the Basic Law the Government has the responsibility to ensure the new airport would run smoothly on the airport opening day. But the Government was like a bystander after the establishment of the ADSCOM. The ADSCOM should be more proactive." Mr YU also said: "Even though the red light was on, management forgot to act prudently as it focused its attention on the deadline. Those who supervised the project on behalf of the public failed to take suitable measures and the Government was those who failed thus." So, even the Senior Counsel for the Commission did not agree with the Report. The ADSCOM should not wait for others to blow the whistle; it should take up the responsibility of supervision. Under such circumstances, how can the people be convinced when Justice WOO's Report is making light of the Government's responsibility? All this will only make the people cast doubts on the credibility of any future commissions of inquiry.

Finally, I would like to talk about the Chief Executive. He often says we should address the matter and refrain from being personal. I recall when I talk to my wife about this event she often said : "Men spoke like this often." Why? Have we noticed most men like to say "I am great. I am never personal. I look at only facts." After some careful thinking I think maybe the Chief Executive is a typical Chinese man, who likes to say "I look at only facts without being personal". But he is in fact pretending to be generous. I do not think this is a right attitude. Why were there mishaps? All because of people. We should not brush the matter aside by pretending to be great by saying "I look at only facts without being personal". We should have a clear mind in making judgment as to who should be responsible and why. Thank you, Mr Deputy.

MR NG LEUNG-SING (in Cantonese): Mr Deputy, first of all, I wish to express my support for today's motion. It is also the only motion today. The following are some of my views.

One of the main contents of the Report of the Select Committee on the problems surrounding the new airport is an objective analysis and examination of the problems surrounding the commencement of the operation of the new airport and the circumstances leading to them. With regard to the responsibilities for the incident and matters relating to the organizational structure, supervision, personnel arrangements and specific procedures in respect of future large infrastructural projects, the Report has offered invaluable views. It is only natural that public opinion has paid more attention to the responsibilities for the incident and the officials and supervisors in connection with the airport projects. However, what is more important for the Government is to study the Report carefully and draw systematic conclusions from the experience of this incident. It should learn a lesson from this in order to prevent similar incidents from recurring in future large infrastructural projects.

With regard to the performance and responsibilities of individual officials in the supervision of the airport projects, the Report has quoted information and made direct comments. Naturally, some officials may find it unfair that they were not given the opportunity to respond to the relevant comments made about them and to defend themselves. This is understandable. However, as far as the Report is concerned, it has indeed tried to be fair and objective, praising and commending jobs well done and those who have performed well, and adequately criticizing those who have performed poorly. The Report contains the comments and views of an organization representing public opinion on the performance of public officers and relevant departments in the incident based on objective facts. These views may be used as reference and to draw the attention of the Government and the public alike. As to the judgment on the merits of the people concerned and how rewards and punishments should be meted out, it should wait until the relevant government officials have had a chance to fully explain and defend themselves.

A revelation of the Report is that the airport incident has exposed the problems of supervision, management, communication and operation that exist between the Government and those statutory bodies with specific responsibilities. These problems did not arise only after the establishment of the Government of the Hong Kong Special Administrative Region (SAR). The supervisory structure and system of the large airport projects were established long before the airport incident occurred. However, the emergency has exposed the deficiency in foresight and crisis management. In the light of this, the structural reform in the Civil Service proposed by the Chief Executive recently appears to be all the more necessary and timely, at least in my view. Of course, before any concrete measures for the relevant reform have been thought out and implemented, it seems hardly beneficial for the continuity and stability of the system if the officials who had been involved in the projects before the establishment of the SAR should receive punishment that departs radically from the long-established disciplinary system within the Civil Service. Moreover, the conception and construction of the airport can be traced back to as early as 1989. The relevant organizations and systems have been in operation for years and their weaknesses are long standing. The indulgence of the ADSCOM towards the incompetent Chief Executive Officer or the lack of co-ordination between the AA Board and its management are two examples. These problems did not spring up overnight. After the incident occurred, the Chief Executive of the SAR was immediately asked to deal with it. I believe that such arrangements must be properly made, and made in a pragmatic way. As Members of the Hong Kong Legislative Council, we believe that as long as the Report is objective and fair, the public will judge it fairly and reasonably.

From another point of view, the said Report makes a solid and frank appraisal of various public officers. This shows that after the reunification in 1997, the Hong Kong Legislative Council's role of monitoring the Government has remained unchanged. We can foresce that the SAR is gradually moving towards greater openness. The concern of the people and public opinion will keep pushing the Legislative Council to exercise its monitoring functions. The system whereby the executive authorities must be accountable to the legislature explicitly provided in the Basic Law is now more widely recognized. Therefore, as a member of the Legislative Council, I hope that the Report to be endorsed by way of this motion will lead the SAR towards a more positive future. I hope that everyone will correct his mistakes, if any, and guard against them, if none.

Mr Deputy, I so submit.

MR CHAN KAM-LAM (in Cantonese): Mr Deputy, both the airport opening day (AOD) fiasco took place on 6 July last year and the consequent financial losses have indeed shocked the entire world. Everyone wants to know why the opening day of an almost $80 billion new airport would end up a joke in the international community. Who should be held responsible for the entire matter? Will those who should be held responsible or those who have committed dereliction of duty be subject to any sanctions?

As a member of the Select Committee, I can tell Honourable colleagues that the Select Committee has been working round the clock over the past four months. The information papers we need to read have filled up a bookcase; indeed, many members had to use a trolley to carry the information papers to this Chamber every time the Select Committee met. I am pleased to say that the painstaking efforts made by the 13 members of the Select Committee have not been wasted, and I am very much satisfied with the Report that the Select Committee has submitted to this Council and disclosed to the public. In my opinion, we have at least fully discharged the duty that this Council and the public has entrusted to us. We have done the most work within the most limited time, leaving no stone unturned in the investigation to give the public a clear account of the decision making process regarding the AOD and the reasons why the AOD has ended up a fiasco; besides, we have also directly pointed out who should be held responsible, as well as remarked separately on the individuals and organizations that are responsible for the fiasco.

Mr Deputy, the Select Committee's Report could be regarded as a modern edition "The Ugliness of Officialdom", since we could see in it the many problems typical of bureaucratic culture; feasting at the public crib, dereliction of duty, ducking out of responsibility, hoodwinking the superiors and bullying the subordinates, to name just a few. Nevertheless, uncovering the cause of the problems and investigating who should be held responsible is but the work we did, and the ultimate purpose of this inquiry is to make the Government and other parties concerned to learn a lesson from the incident, with a view to enabling both the entire civil service team and the future major projects to avoid making the same mistakes again.

In regard to this incident, the most obvious example of bureaucratic culture should be the case in which no one dared to suggest to the ADSCOM to defer AOD from the prescribed 6 July to a later date, despite the many signs indicating that the new airport was far from ready. The ADSCOM Management was of the belief that the order of superiors could not be revoked, hence the Projects Department of the AA must make every effort to discharge its duty and cling to the bigoted course disregarding the many problems present. On the other hand the Projects Department considered 6 July as a irreversible date; as such, it could not but hold out tenaciously and "hope for the best". The Democratic Alliance for the Betterment of Hong Kong (DAB) holds that Mrs Anson CHAN has failed to lead the ADSCOM to accurately assess the preparatory work of the new airport and must therefore shoulder part of the responsibility. This is certainly a blot on her civil service career.

As regards KK KWOK, Director of NAPCO, his performance has reflected that he did not quite understand what his role should be, though he is responsible for monitoring both the progress of the various projects and the AA management. In spite of his role as the "alarm system" of the various projects, Mr KWOK did not raise the alarm at all; on the contrary, he even made an effort to undermine the sound of the alarm system. What beats the Select Committee was his indifference to the expert advisors' opinion that the AA management had been too optimistic about the progress of the projects; besides, he had even queried without valid grounds the expert advisors' independence. As to the AOD on 6 July , it seemed that Mr KWOK was hoping that lady luck would smile on him.

Due to the absence of an accountability system, civil servants who have committed dereliction of duty or other mistakes do not need to resign for the blunders they made. This situation has for a very long time been much criticized by members of the public. Bearing in mind that the Chief Executive has referred to the need to reform the civil service system and culture earlier on, and the experience we have gained in this new airport fiasco, we believe it is indeed the right time for us to review the collective responsibility system of and introduce a new accountability system to our Civil Service.

In regard to the AA management, including Dr Henry TOWNSEND, Douglas OKAERVEE, Chern HEED, Kiron CHATERJEE, TSUI King-cheong and so on, it is obvious that they are all guilty of dereliction of duty. Apart from neglecting their duties, they have also tried to duck out of their responsibilities in the hope that they could, with luck, slip away unpunished. Hence, everybody's business is nobody's business. As such, the DAB considers it necessary to recover the gratuity granted to Dr Henry TOWNSEND and Douglas OAKERVEE, albeit they have already completed their contracts and left Hong Kong. As for those who are still at their post, we opine that the AA should terminate their contracts with immediate effect and forfeit their gratuity entitlements; otherwise, keeping those unfit personnel in the AA will serve to not only waste public funds but also plant a time bomb which could explode at any time.

Mr Deputy, the former British Hong Kong Government believed blindly in the quality of non-local productions, hence both the major and minor projects under it used to employ a large number of foreign engineers and consultants. The AA management was no exception. Those so-called professionals, despite their many years of engineering experience know nothing about airport projects. In this connection, both Dr Henry TOWNSEND and Douglas OAKERVEE have admitted that the new airport at Chek Lap Kok was their first airport project. Not that we consider foreign experts inferior to local project engineers, but local engineers will obviously beat their foreign counterparts in terms of familiarity with the local conditions and sense of belonging and responsibility towards the local community. For this reason, the Government should give priority to local talents in employing engineers for its projects in the future; besides, in making selections, attention should be given to the specialized knowledge and experience of the candidates instead of their branding status. One good example in this incident is the appointment of Dr Henry TOWNSEND as the Chief Executive Officer of AA; as referred to in the Select Committee's conclusion, the appointment itself was a major mistake and the renewal of his contract a further one.

Mr Deputy, another lesson that the Select Committee has learned from the new airport fiasco is not to set up under one single organization too many committees with overlapping roles and responsibilities. This problem exists in not only the AA management but also in many other government departments and organizations. More often than not, the responsibility for one single issue will be shared among several government departments, committees or working groups; hence, instead of effecting mutual supervision, the complicated structure will only serve to drag down efficiency and give rise to a situation in which the persons involved all try to shirk their responsibilities.

Among the many points mentioned in the Selection Committee Report as lessons that should be learnt, a comparatively more important one in my opinion is that the Government should attach more importance to public opinion in planning its projects. The Civil Aviation Department has started dealing with the noise problem along the flight path since the opening of the new airport, this in itself has nevertheless reflected the fact that in planning their major and minor projects government departments have all along lacked due alertness on the one hand and overlooked the importance of public consultation on the other. Apart from being "unaware" of the public opinion, in most cases the government officials responsible for the projects would only "inform" the public of their decisions; the consultation exercises conducted were but a mere formality.

The catastrophic fiasco took place on the opening day of the airport at Chek Lap Kok is indeed a blot on the history of Hong Kong, fortunately everything has been running smoothly ever since the operation of the new airport was put back on the right track. Not only the people of Hong Kong have revived their confidence in the new airport, an international magazine has also highly recommended it recently. As such, we hope that the AA could expeditiously implement reforms to improve the management of the airport by discarding the undesirable past practices, with a view to enabling the airport at Chek Lap Kok to really become an airport which worths more than its costs.

With these remarks, Mr Deputy, I support the motion.

MISS CHOY SO-YUK (in Cantonese): Mr Deputy, it was my pleasure to work with 12 other Honourable colleagues as members of the Select Committee to investigate into the new airport fiasco. Despite the many hardships and limitations, the Select Committee has still managed to safeguard the interests of the public by investigating the truth of the matter in a fair and objective manner and based on facts. The Report of the Select Committee has been applauded and supported by the public at large since its publication. From this we could see that the efforts made by the Select Committee were not in vain, and that the justice upheld by the Select Committee was well reckoned by the public.

There are indeed many other profound problems behind the new airport fiasco; however, due to the limitations of its terms of reference, the Select Committee has not been able to uncover them so as to enable the community as a whole to know more about the truth of the matter on the one hand, and to summarize more experience for reference as we chart our development in the future.

To begin with, the root cause leading to the breakdown of the Flight Information Display System (FIDS) has yet to be established. Apart from spending billions of public funds to hire the services of British consultants Grenier International Limited and Maunsell Consultant Asia Limited, the Provisional Airport Authority (PAA) has also given the contract for work on the FIDS to the Mott Consortium, a consultancy comprises experts from the Airport Administration Board in Britain. So the people of Hong Kong have spent a lot of money, but what do we get in return? Despite the huge consultant fees we have paid, the contracts drawn up by the consultant firms were but a mess, as the wordings of the contracts were very vague and the legal responsibilities stipulated were by no means specific. Indeed, messy contracts also constitute one of the reasons why the relevant works and projects were delayed for more than 10 months. If we concentrate only on denouncing the poor management and internal communication of the AA but overlook the selection and cost effectiveness of consultant contracts, the new airport inquiry will only be a superficial one. The SAR Government should investigate further into the matter to find out how the PAA and the early stage ADSCOM awarded the relevant contracts.

In view of the West Rail project, sewage disposal scheme, Kowloon Bay reclamation project and other major projects in progress, it is imperative for the Government to draw on the lessons learnt from this incident to avoid making the same mistakes again.

On the other hand, the NAPCO has spent a fortune to employ the world class International Bechtel Incorporated to give advice on the co-ordination of the airport projects. How much have we paid the consultancy firms like this? I wish the Government would provide the Council with the details. What is more, the Report which has cost us a fortune was being taken lightly of by government officials. This is exactly where the crux of the problem lies. Does it imply that the AA has to spend large sums of public fund to commission some experts to prepare yet another co-ordination Report? Should the NAPCO be accountable to the public in its capacity as a "critical observer"? All these are related to the culture of the Civil Service.

Speaking of the relationship between the ADSCOM and the AA, I could hardly understand why the ADSCOM would choose to bypass the Chairman and Vice-chairman of the AA to communicate with their subordinates directly, and thereby making itself the centre of authority not in name but in deed on the one hand, and leaving the AA leadership on the shelf. Yet those government officials who are also AA members have failed to relate effectively ADSCOM's views to the AA Board. I should like the Government to provide this Council with explanations in this connection.

Another point worthy of note is the number of government officials in public organizations. In this connection, six of the AA members are senior government officials, compared to the three out of 30 in the Hospital Authority as provided for by law and the two in the Mass Transit Railway. Would that be the cause of all problems? Would the unofficial members of the AA be misled by the presence of the ADSCOM and the many senior government officials in the AA into thinking that they could depend to a large extent on the government officials in the AA since they are also members of the ADSCOM?

From the ADSCOM to the AA Board, the power has always been in the hands of the Government. During the PAA days, government officials had once filled up 50% of the seats on the Authority. It was not until the principal contract and franchise had been awarded and key management personnel including Dr Henry TOWNSEND and Douglas OAKERVEE been employed that the existing AA was established. However, after the new airport fiasco, it is the AA Board which has been held responsible, albeit it did not lead the new airport development project at all. As for the government officials who have all along have the most power and information, on the contrary, they were the last one who came out to offer reluctantly their apologies to the public. Thus we can see that government officials have only power but not the responsibility. In regard to this practice of taking the power but not the responsibility, is this the mode of government operation and the civil service culture that we desire?

What distressed me most was the response of a Deputy Secretary for Works during a meeting. On hearing that I would seriously and justly investigate into the new airport fiasco, and that I would not let off any government officials who have committed dereliction of duty, the Deputy Secretary immediately asked the Chairman of the Hong Kong Progressive Alliance not to let me join the Select Committee right in my presence. Does it imply that some government officials are really "involved" in the fiasco? The public officers are just too arrogant to shoulder their own responsibility or offer any apologies.

Mr Deputy, what we members of the public wish to see is a highly accountable government which will take on but disdain to duck out of its responsibilities. I believe it is time we reviewed the civil service system; the civil service culture we desire is one which is spirited, up-to-date and suits the needs of the 21st century.

Mr Deputy, although the Report did not recommend punishing those government officials who have made mistakes, it does not imply that they could be let off without any punishment. I hope that the Government will re-assess in the light of the Select Committee's Report and in an objective and fair manner the ability and sense of responsibility of each and every public officer concerned, with a view to imposing due punishment on the relevant officers and giving a clear account of the entire matter to the public.

The Honourable LEE Wing-tat has suggested requiring the unofficial member of the AA Board to resign over the new airport fiasco, I am afraid I could not agree less. I cannot help but ask if this suggestion is contradictory to the findings of this inquiry. Since the Report has criticized a number of government officials, should we not then require the entire AA Board to resign? Could my Honourable colleague be suggesting that we should give those senior government officials promotions and pay rises?

In addition to the many problems at the management level as referred to in the Select Committee Report, the new airport fiasco has also encompassed other issues including the operational franchise of the airport and consultancy contracts which are worthy of our attention. One very obvious example is the lesson we have learned from the suspension of services by the Hong Kong Air Cargo Terminals Limited (HACTL). To begin with, I should like to know if HACTL is still operating with temporary electricity supply, and when will it have permanent electricity supply. Could HACTL guarantee that the disaster that took place in July last year will not happen again, since electricity supply was then suspended while the computer system had either broken down or been damaged? Does its future contingency plan also needs to enlist the help of the Central People's Government and the Macau Government? When will the Administration start reviewing HACTL's monopolistic franchise, with a view to reducing its impact on the import and export freight services as well as the economy as a whole?

As regards the issue of flight path, when will the Government review its policy on flight paths? Furthermore, in regard to the franchised public utilities which impacts significantly on the livelihood of the public, when and under what circumstances will the Government liberalize the sector to suitably encourage investment on the one hand and safeguard the interests of the public as a whole on the other. These are questions which I should like the Government to provide this Council with precise answers.

A more important issue is that the majority of the many megabuck consultancy contracts which have been granted to foreign companies; as such, the entire airport could be regarded as an imported product, an airport bought from overseas. But what has Hong Kong got in return? Has Hong Kong nurtured any local contractors or specialists after spending a fortune? Do we have our own experts to construct and manage an airport? If the Government continues to overlook the need to train up local experts and the need for technology transfer, the efforts of inquiring into the new airport fiasco will have been washed down the drain however constructive the inquiry findings may be.

With these remarks, Mr Deputy, I support the motion.

MISS CHRISTINE LOH: Mr Deputy, outside this Council, I have heard a number of people say that we should not harp on the problems of the past anymore because the Chek Lap Kok airport is just fine now. Some also say that by talking about the issue, we are just giving the rest of the world an impression that things are not good in Hong Kong, and this will have an impact on tourism. I must say that those who hold this view have completely missed the point of the Select Committee's exercise. There are lessons to be learnt from the chaos and we need to identify them. A community that is secured in itself has no problems dealing with mistakes. And the world will not think us any worse for it. I see the process that has been gone through in Hong Kong on identifying the problems related to the airport opening as a sign of strength, not one of weakness. Mr Deputy, I have no wish to repeat anything that has already been said in the Select Committee's Report since you have already read it. Since its publication, together with those from the Commission of Inquiry and the Ombudsman, I am sure that they make good reading for the Administration as a whole.

It is clear that all three Reports are consistent in the finding of facts. This is important because all three found that the airport was not ready for opening on 6 July last year. Thus, those who had the power to delay opening but did not do so must take responsibility that their decision to open then was a mistake.

I want to start by making an observation on the post-report comments from those affected. I believe that their reactions offer some more clues to how we can do things better in the future.

After the Select Committee's Report was published, the Chief Secretary for Administration said that she personally regretted all the inconvenience caused to the public, and that she was "deeply sorry" for the airport chaos. She said that the Administration did the best job it could, although it turned out not to be a "perfect" job. However, she also added that she was "somewhat puzzled" by our finding that as chairperson of the ADSCOM, she must shoulder personal responsibility.

There is no allegation that the ADSCOM and the officials involved in other capacities did not work hard enough. The Chief Secretary for Administration was indeed conscientious from beginning to end, as were many on her team. However, working hard is one thing, getting something right is another. Moreover, there must be a willingness to take personal responsibility when something goes wrong. For those who have the power to make the key decisions, it is wrong for them to assume that collective decision-making would absolve the need to take personal responsibility.

In the case of the Secretary for Works, I believe he expressed disappointment that the Select Committee found that he failed in his capacity as the Administration's top engineer to adequately alert the ADSCOM to various key problems. Did he ever thump the table to say that the airport was not ready on that day? It appeared to be negative. He came under heavy criticism because among the most senior ranks of the Administration, he had the required expertise to judge readiness from a professional viewpoint. He, too, should be willing to take personal responsibility.

Mr Deputy, I would like to mention another problem. Hong Kong's bureaucratic culture seems to make it hard to contradict a superior officer. The top officer in this case was the Chief Secretary for Administration. Why did no one go to her and say that the airport was not ready? The Chief Secretary for Administration may also want to ask herself why she did not fully understand that the airport was not ready? Did she make it hard for people to pipe up? If important information was blocked by the culture within the Administration, consideration must be given as to how to change that.

There is no point putting professional people in place, or to get outsiders to help, if the internal culture is one which discourages lower ranked officers to speak up, or indeed, for people to take and to accept personal responsibility. After all, in the case of our airport, the NAPCO had no shortage of information on the risk that Hong Kong took to open the new airport in July. It was just somehow that information never got through.

All the individuals involved who were in a position to suggest a delayed opening must ask themselves why they did not do so and must be prepared to take personal responsibility for that failure.

Another problem that Hong Kong has is to have too many unsuited people heading and running various organizations where particular qualifications are needed. If you want your airport to be managed properly, you need a professional in airport management to do so. The former Chief Executive was the wrong person. It remains unclear to me why the Administration and the Board of Airport Authority (AA Board) were so tolerant for so long of a person who did not have the quality of leadership to manage the construction of the airport. Perhaps the Chief Secretary for Administration will give us an explanation later today.

Now, we have a new executive head for the AA. He may have a long civil service record, but is he the best person that Hong Kong can find to head airport management? Should modern airports be managed by someone who has nothing but a civil service record? Mr Deputy, I am not picking on an individual. I am just questioning whether any civil servant is fit to head a modern airport. I hope that I am not misunderstood.

One thing that troubles me is the recent call by the AA for its former Chief Executive and Project Director to return their contractual gratuities. Why did the AA not withhold the payments until the three inquiries were over? I seem to recall the AA representatives saying last year that it was obliged to pay the gratuities. Well, they look rather stupid today to be calling back the gratuities. All I can say to them is "Good Luck". Is this another sign of ineptitude?

The Select Committee's Report concludes that the current and former heads of the NAPCO failed to grasp the implications of the discrepancies between the actual work progress and the work schedule. That is another example of putting people in the wrong place. Again, I question whether administrative officers who have not had any experience in the related field should be made to head such organizations. Forgive me for saying this, nevertheless, a bureaucrat may be a brilliant individual but he or she may be entirely unfit to head organizations which need particular expertise. After all, the administrative officer system, however fine, cannot produce all things for all occasions.

As for appointments to the AA Board itself ─ or indeed to any of Hong Kong's consultative and executive bodies, I hope the Administration has learnt a significant lesson. If you want a strong board which can spend the time and has the ability to take important decisions, then the Administration must be prepared to let go of its own bureaucratic preference to control these bodies by packing them with "yes" people. Is it prepared to do that for the sake of professionalism?

There is another painful area of gross unprofessionalism, and that is the unreadiness of the HACTL at airport opening. The HACTL and its general manager, Mr Anthony CHARTER, should have known that its operation was far from ready. Why did they not tell the Administration? I believe that the HACTL must be held primarily responsible. Their neglect was unforgivable. I have yet to hear a full account from either Mr CHARTER or from the HACTL's management. I suggest that they be asked by this Council to appear before an appropriate Panel to give a full response to the three Reports, otherwise I fear they may get off too lightly.

At the same time, why did no one from the AA or from the NAPCO spot that the HACTL was still in a mess in early July? I hope that the Chief Secretary for Administration will tell us today why no one on her team advised her that the cargo handler was far from ready on 6 July.

Mr Deputy, I look forward to also having the Chief Executive come before this Council. As the head of this Government, as our political head, he does have the responsibility to come once he has time to digest the three Reports. He also cannot escape from this clear responsibility. I agree with the Honourable Mrs Selina CHOW and the Honourable LEE Wing-tat that the Chief Executive has given us an impression that he valued the Select Committee's Report less than the other two. It, perhaps, demonstrates his distaste for this Council, even though the Basic Law requires the executive branch to be accountable to the legislature. I hope that he will take a less prejudicial view of this Council and consider the contents of our Report with an open mind.

Finally, I wish to thank the secretary and staff of the Select Committee for their hard work and their accommodation of my various arduous requests to facilitate my work in the Select Committee. I also wish to thank Mrs Selina CHOW for her excellent chairmanship. She was thorough, firm and fair and infinitely patient with the Select Committee's members and tolerant of our shortcomings.

MR LEUNG YIU-CHUNG (in Cantonese): Mr Deputy, the chaotic situation on the Airport Opening Day (AOD) has indeed caused the people of Hong Kong to lose face; what is more, it has also caused Hong Kong to incur enormous tangible and intangible losses. By intangible losses, I am of course referring to the damage done to our reputation as an international commercial metropolis; as for tangible losses, the government estimate is some $2.9 billion. Having paid such a huge price, we should really "learn a good lesson" from the new airport fiasco, as pointed out by the Chief Executive, Mr TUNG Chee-hwa. As a matter of fact, the Inquiry Report of the Select Committee of this Council has provided us with plenty of information with the help of which we could learn lessons from the mistakes made.

But what lessons should we learn? Apart from the 15 lessons set out under Chapter 8 which are relevant to major infrastructure projects in the future, more importantly, the incident has also pointed to mistakes frequently made by the Government and other public organizations from a macro point of view. I hope that the relevant organizations could kick these bad habits not only in the new airport or other major infrastructure projects but also in other fields of work, with a view to improving their work performances. The incident is more than just a problem of dereliction of duty, negligence, laziness, character defect or inability on the part of individual government officials; indeed, it has also reflected the ways in which public organizations and government departments communicate and co-operate with each other, superiors supervise their subordinates and subordinates report to their supervisors. As such, the incident could be summarized as a collection of problems in connection with the mentality and working style of public officers in general, or even as the corporate culture of the Civil Service as a whole. Unfortunately enough, as we could see in the Report, the new airport incident has presented us with a negative example.

Just now an Honourable Member has referred to the Report as a modern edition of "The Ugliness of Officialdom". As a matter of fact, the Report has listed out a number of public officers involved in the new airport development and the various improper manner and attitude they adopted to handle their work. All along they have been trying to bluff their way out, as the saying goes, they have been "trying to fish in troubled waters"; indeed, the Report has revealed an impressive array of their tactics.

The first of such tactics is "lying". The word which appears most frequently throughout the Report is "mislead"; I have counted 13 in Chapter 7 Responsibilities alone. "mislead" is in fact a very polite and mild word, a more direct term is "lying", which means the public officers have tried to hide the truth. As referred to in the Report, the senior management of the AA had tried to hide the truth from the ADSCOM and the AA Board. In this connection, even the Secretary for Works, Mr Benedict KWONG, had tried to "mislead" the ADSCOM regarding the operation of the Flight Information Display System (FIDS). The "misleading" tricks played by the public officers could be catergorized into four types as follows:

The first one is "window dressing". The papers provided by the AA Management for the ADSCOM and the AA Board were more often than not just beating about the bush. Instead of offering any concrete facts, the papers only concentrated on making various promises and talking about expectations to present only the bright side of the situation.

The second one is "reporting only the good but not the bad". There are plenty of examples in this connection. For instance, the Director of the NAPCO, Mr KK KWOK, neglected the warnings made by expert advisors in the Weekly Situation Reports and reported to the ADSCOM over-optimistically on the readiness of the new airport for opening on 6 July, making no mention of the possible problems with the FIDS and other aspects of the new airport.

More unacceptable than "window dressing" and "reporting only the good but not the bad" is the practice of "swearing black is white". The most absurd instance is of course the one in which the reliability of the FIDS was reported to the AA Board by the AA Management as 98.7% when in reality it was referring to the usability rate of the host server.

In the event that the above methods all failed to enable them to gloss over their mistakes, the public officers would even resort to making "self-contradictory" statements. The Select Committee's Report has also pointed to this fact: In the assessment Report it submitted to ADSCOM on 13 October 1997, the AA Management stated on the one hand that "There is little possibility of HACTL being ready to meet 1 April opening", yet on the other it also indicated its confidence in "completing the various necessary tasks and major works on schedule".

Why are these public officers so prepared to "tell lies"? We could tell some of the reasons from the Report. It is because the top level government officials all loved to set a "good" example by telling lies themselves. In this connection, although it was obvious that the new airport was not yet ready then and hence the opening day had to be deferred to July, the Government told the public that it wished to wait until the Airport Railway was ready in June, and thereby shifted the responsibility for the deferment onto the Airport Railway. Since senior public officers had lied to the public, how could we expect their subordinates in the various government departments and public organizations not to follow suit?

Another undesirable practice of the public officers is "minding only one's own business". One typical example can be found in Chern HEED, the AA's head of airport management. In this connection, he had learnt about the many problems with the new airport at an early stage, yet despite his capacity as member of the most senior management of the AA he did not inform the AA Board or the Chief Executive Officer simply because he considered the problems outside his brief.

One more undesirable mentality that most public officers have is their belief that "the instructions from superiors shall never be breached". Although ADSCOM Chairman Mrs Anson CHAN has remarked that if there were any indications implying that the new airport could not handle the volume of passenger flow or freight, the Government would certainly postpone the AOD to a later date, those who take part in the new airport project all believed that the AOD, once confirmed as 6 July 1998, could not be changed. As a matter of fact, Mrs Anson CHAN stressed again on 15 November 1997 in a letter to the AA Chairman that "the date, once announced, will be irreversible". She has also remarked that "all parties involved, including the AA Management and AA Board, the franchised operators and their business partners, as well as the Government, shall make joint efforts to achieve the objective."

The inquiries conducted by three different bodies have all come to the conclusion that the choice of the AOD did not involve any political factor. In other words, there is no evidence showing that Beijing had made any instructions in this connection. In my opinion, this situation is even more worrying, since it implies that once Chief Secretary for Administration Mrs Anson CHAN had given her order, "the whole world" would believe it impossible to reverse the AOD even if there were any mistakes; besides, nobody would dare to ask the question "Will the new airport be ready to open on 6 July 1998?" as raised in paragraph 7.4 of the Select Committee's Report, and even if the question were raised, nobody would dare to change the date.

Certainly this is not a proper type of mentality on the part of the subordinates if they were afraid to air to their supervisors their different views. But should we not find out what made them think like that? Perhaps they have raised their different views or refused to follow instructions indiscriminately in the past but were met with rebuffs every time, or may be it was after being given a cold shoulder by their superiors for many times that they dare not to put forward any good suggestions.

Warnings against the problems with the new airport were indeed given. For instance, the "Weekly Situation Report" had continuously pointed to the various aspects of the new airport that had yet to be perfected. Besides, Chern HEED's subordinates in the AA Management have also alerted him to the problems. In addition, the Select Committee's Report has also commended two staff members of the AA's Airport Management Division for having expressed to their superiors the concerns they had and they are, namely, Terminal Systems Manager Ms Vivian CHEUNG and General Management (Terminal Operations) Mr NG Ki-sing. Nevertheless, their good advice had fallen on deaf ears and been cast aside.

The Select Committee has remarked that it could not understand why the ADSCOM trusted the Reports submitted by the AA but paid no heed to the "Weekly Situation Report" prepared by the NAPCO. In my opinion, the reason is very obvious and that is: ADSCOM Chairman Mrs Anson and the majority of the relevant public officers under her had been trying to muddle through by taking in Reports "selectively", instead of facing the reality and accepting proposals that may cause short term troubles to their work at hand but do good to the project as a whole; they would only listen to suggestions agreeable to them.

I believe the irresponsible work attitude is typical of not only the organizations involved in the new airport projects, for similar situations do exist in other government departments and public organizations. That their problems have not been disclosed simply because so far no in-depth inquiry like that of the new airport has ever been conducted into them. Mr TUNG Chee-hwa has recently indicated his decision to reform the civil service establishment. In this connection, I consider it a first and foremost task to handle the aforementioned undesirable practices. As regards Chief Secretary for Administration Mrs Anson CHAN and the entire team of civil servants under her leadership, I hope they would reflect on their past to review if there were any undesirable practices like proneness to boasting and big empty talks. If such undesirable practices were not eradicated, I am afraid that civil servants who have the courage to put forward their advices to their supervisors will either be sacked or demoted instead of being rewarded.

I hope that the Civil Service as a whole and the staff members of all public organizations could really learn lessons from the new airport fiasco, in particular the ones I referred to just now. Nevertheless, it is regrettable that none of the three inquiry Reports has recommended imposing sanctions on those public officers who are guilty of dereliction of duty; as such, it would hardly be possible to press them to have any in-depth reflections. For this reason, Mr Deputy, I still believe the Government should reprimand those public officers who should be held responsible for the fiasco.

I so submit.

MR EDWARD HO (in Cantonese): Mr Deputy, to take part in the Select Committee work was, for me, probably unprecedented and the most challenging task I have done in this Council. This is because we were required to bear pressure not only in terms of time and work, but also in terms of psyche. As a member of the Select Committee, I deeply understand we have to fulfil this important task with an objective and fair mind. Not only have I tried to look at the issues pertaining to project management from the angle of a professional, but also I have imagined I am one of the top management to examine the ways with which those people should handle the matter and the responsibilities they should assume.

I am not prepared to comment on the conclusions and results of the Report in detail here again as the Report itself has already contained a detailed and clear account of the incident. I will only mention what I feel about the Select Committee Report.

This kind of committee of inquiry will inevitably be confined to the investigation of problems that have arisen. As far as the Select Committee on the new airport is concerned, its objective is to find out the causes leading to the chaos on Airport Opening Day (AOD). The problems occurred on that day were so serious that the reputation and economy of Hong Kong were also affected. But the new airport is only part of the mammoth Airport Core Programme (ACP). Boardly speaking, the $155.3 billion ACP has been able to complete on schedule and within budget. Given the restrictive scope of investigation, it was impossible for the Select Committee to comment on the contributions and achievements made by the Government and the relevant organizations or individuals. To me, this is extremely regrettable. Therefore, we should bear this in mind when we criticize certain people or organizations in making the final conclusion.

I do not agree entirely with the conclusion drawn by the Select Committee. However, due to the restricted ambit of the Select Committee and the need to respect the spirit of democratic discussion and reconciliation so as to reach a consensus, I am basically in support of the Select Committee Report. We cannot say that the Select Committee is of no value to our way forward for it has only investigated the facts and this is, in fact, where its responsibilities lie. To me, the most important task of the Select Committee is to, through carrying out the investigation, help Hong Kong learn a lesson so as to prevent the same mistakes from being repeated in planning large infrastructure projects in future, in order that the projects can be completed smoothly. To me, this should be the paramount task for the Select Committee.

Many members of the public doubted why the Legislative Council, the official Commission of Inquiry on the New Airport and the Office of the Ombudsman should conduct investigation into the airport issue separately. I am not in a position to speak on behalf of the other two bodies. What I can say is that, this Council, which is an elected body, bears the responsibility to oversee the Government, its official and the work of its statutory bodies. Because of the seriousness of the chaos on AOD and the resultant impact on society, this Council was obliged to set up a select committee to investigate the incident.

Members should be aware from part two of the Minutes of Proceedings that my views on paragraph 4.41 of the Report are different from other Members'. As restricted by the rules of order of the Select Committee, it is not possible for the Report to record the reasons why I held different opinions, I would therefore like to take this opportunity to elaborate on them. Since August 1997, the ADSCOM had been seriously examining whether it was practically feasible for the new airport to open in April 1998. From September 1997 to January 1998, this issue was repeatedly discussed by the ADSCOM during its meetings (see paragraph 4.9). During this period, the NAPCO, the AA and the Works Bureau appointed 11 internal professionals to conduct examination and assessment.

Subsequently, in a meeting held by the Airport Authority Board (AA Board) on 9 December 1997, the Airport Authority Management (AA Management) reached a consensus that the target of opening the airport in April could be reached. As a result, the Chairman of the AA replied in writing to the Chairman of ADSCOM stating that the AA Board had undertaken a very thorough review of progress in all areas, with particular reference to the ADSCOM's areas of concern. The Board was satisfied that "the airport can be ready for safe, smooth and efficient operation on an appropriate date in the last week of April" (see paragraph 4.32). Such a specific indication had, however, still failed to put the Chairman of ADSCOM's mind at ease. And to express her concern, she requested the AA Board to continue to monitor developments with a view to reaching a firm conclusion on the airport opening date in early January 1998 (see paragraph 4.33).

Then at a special ADSCOM meeting on 2 January 1998, the Chairman of ADSCOM asked whether April was a realistic date. In addition to the previous indication of feasibility by the AA, the Secretary for Works and the Director of NAPCO, both were most directly involved in monitoring the works, replied in the affirmative in the meeting (see paragraphs 4.34(a) and (b)).

Eventually, the Chairman of ADSCOM decided to defer the airport opening date to July 1998, showing that she had insisted on her own opinion against that of the majority. This should be a wise decision for it has given the airport three more months to carry out the works.

Under such circumstances, I cannot agree with the Select Committee's decision that the ADSCOM, having decided to defer the AOD, should re-examine whether it was feasible for the airport to open in July. As the previous examination, which lasted for more than three months, had determined that it was possible for the airport to open in April, the argument that the feasibility of opening the airport in July should be re-examined would be illogical. Such a "second guesser" attitude is, in my opinion, an error in a Report which would be otherwise complete. But unfortunately, my amendment was negatived by other members of the Select Committee.

Nevertheless, I agree that the ADSCOM, having decided to open the airport in July, should monitor the work progress closely to ensure the airport could open on schedule without any risk. I also agree that the relevant body, in spite of many signs indicating the potential problems, had failed to make a careful assessment, thereby leading to great chaos on the opening day.

Among the various problems, the fact that HACTL almost needed to suspend all services provided by the Super Terminal 1 (ST1) on that day and that it had taken ST1 more than two months to resume to normal operation can be considered the most serious problem in the airport fiasco. Therefore, the Select Committee has absolutely every reason to criticize the company.

Hong Kong has now an airport that we can be proud of. But the Select Committee considers this point should not merit any commendation. This is understandable because obviously we do not want to reduce the principal objective of the inquiry Report. But as far as a reader is concerned, the Report is, after all, not comprehensive enough if it only focuses on the negative aspects to the neglect of positive ones. This is probably a small imperfection that no select committee can avoid.

Mr Deputy, in conclusion, the problems that have occurred on the AOD were all "confidence problems". While the AA Management was too confident in itself, the AA Board had put excessive trust in it. The fact that the ADSCOM and NAPCO lacked confidence in their own professional staff and put excessive and unfounded confidence in the AA had led to various problems eventually.

Lastly, I would like to mention a lesson which has not been covered in the Report and that is, people who have accepted appointment as members of a monitoring body on the executive authorities must bear in mind that before accepting such appointments, they must realize that in addition to contributing their time and efforts, they must be prepared to accept responsibilities whenever problems occur. In spite of this, however, I still hope that brilliant, interested and capable people in the community will not be inhibited from continuing to make contribution to serve the public because of the incident.

Before I close, Mr Deputy, I should like to thank Mrs Selina CHOW for she was really a wonderful chairman. At the same time, I would like to express my admiration for Miss Margaret NG for she has made enormous contribution to the work of the Select Committee. I think the Legislative Council Secretariat has also made every effort and a lot of contribution in assisting the Select Committee to carry out its work.

With these remarks, Mr Deputy, I support the motion.

MR LAU KONG-WAH (in Cantonese): Mr Deputy, the Report on the new airport compiled the Select Committee set up under this Council has listed a large amount of facts and responsibilities in an unequivocal manner. At the time when we moved a motion to set up the Select Committee, we put forward two objectives and they were, to find out the causes leading to the airport fiasco and where the responsibilities lie. These two objectives have in fact been achieved.

Today I have no intention to repeat the contents of the Report. But I want to express some of my personal views, including my biggest doubt, my biggest aspiration and my biggest lesson. Insofar as my biggest doubt is concerned, ADSCOM Chairman Mrs Anson CHAN always mentioned that, prior to the opening day, there were absolutely no signs indicating that the airport was not yet ready. However, in the course of our investigation, we could see numerous signs as clearly indicated in a large quantity of documents that the airport was still not ready. Even today, I still do not understand why, under such circumstances, the Chairman of the ADSCOM would say that there were no signs before the incident. Mr KWOK Ka-keung once made a famous remark. During the public hearings, he said, "Everything we do, such as crossing the road, bears a risk. Should we then not cross the road?" I think there is nothing wrong with Mr KWOK's remark. But it would be wrong if one crosses the road when the red light is on. We pointed out in the hearings that, just like a person insisting on crossing the road when there was no green nor yellow light and all the three lights were red, opening the airport when the Flight Information Display System (FIDS) had indicated problems and when HACTL was experiencing project slippage and insufficient training of staff would similarly incur a very big risk.

The second doubtful point is that, at the preliminary stage, the ADSCOM still had some reservations towards the AA Management and criticized some of the comments made by the AA Management, but later the ADSCOM turned out to have accepted the entire Management without any reservations. Even today, I can still not dispel these doubts. While Mrs CHAN had acted wisely in deciding to postpone the opening of the airport by four months, it was a failure on her part to have failed to strictly oversee whether it was practically feasible for the airport to open in July. The decision she made had in fact clearly indicated the special role she played as the Chairman of ADSCOM. This unique role has also fully reflected the unique responsibility assumed by her. After the publication of the Report, Mrs CHAN issued a statement saying that the ADSCOM was not a super board. But it has precisely been proved and indicated by the hearings and the large quantity of documents presented that the ADSCOM was indeed a super board as many important matters and major decisions were finalized in this super board. Mrs CHAN was herself a super director too.

While the ADSCOM was acting like a super board and the AA had another board for itself, the problems could be reduced only if the management was strong and powerful. But chaos would arise if the management was weak. Such a double-leadership situation will lead to problems. I therefore consider it worthwhile for us to explore how the operation of similar statutory bodies should be changed in future.

As regards the Report or the entire investigation process, I earnesly hope the Chief Executive can respond to and address the Report in a concrete and unequivocal manner. Mr TUNG might be somewhat stubborn in maintaining the morale of the Civil Service. But even if he needs to maintain the morale, it does not mean that he needs to protect those who have blundered. We must point out where the problems lie if we are to correct some unhealthy practices. Therefore, we earnestly hope that the Chief Executive can take concrete measures to respond to the Report properly.

As regards the setting up of a working group by the AA to follow up the matter, I am indeed a bit disappointed with the choice of candidates. Nonetheless, I earnestly hope that the working group can solve the problems expeditiously and give a full account to the public. If this can be done quickly, I believe the problems brought about by the new airport will be put to an end very soon.

The Report has listed altogether 15 lessons. But personally, I think the biggest lesson to be learned is related to problems with the computer system. To put it rightly, it is in fact a matter concerning the human brain, that is, making judgement by human brain. It is entirely unacceptable for the AA Management to cancel the out-of-factory acceptance test for the FIDS and even cut down on training tests and, instead, using quality to offset the shortfall of time. The computer problems had also reflected that there were problems with the co-ordination of human brains. Throughout the entire hearings, we could see the importance of co-ordination among bodies, frameworks and people. We could also see that some people had purposely presented a false picture as well as reporting only the good news while concealing the bad. Within the organization of a public body, harmony is of course extremely important. But still, we cannot sacrifice the truth for this reason as it is more important for us to be able to deal with public affairs properly. A crow may not sing very well but still I think we should listen to it. On the other hand, we should not assume a magpie will surely bring good news. We should heighten our alertness as well. Therefore, while it is important to pursue harmony, it is equally important to pursue the truth.

On the other hand, there is the problem of instructions from the top level. For instance, the instruction given by the Chairman of ADSCOM that the date was irreversible should of course be taken seriously, but the actual situation was that many members of the management and senior staff had apparently failed to respect the reality and the actual circumstances. Therefore, while it is right to "seek the reality", it is wrong to "seek only what the superior likes". I think the biggest lesson to be learned from the whole incident should be: "to seek the reality instead of seeking only what the superior likes; to pursue harmony as well as the truth".

Mr Deputy, I would like to express some of my views on the way forward for other statutory bodies. After the publication of the Report, a number of people doubted whether they should take part in the work of statutory bodies in future as, after this incident, people were afraid that they would be "required to bear responsibility for blunders". Of course, there were some people who focused their attention on whether one should resign or not. This is actually related to the question of accountability, but still this is only part of the issue, not the whole one. In my opinion, the process of holding someone accountable and the force driving these statutory bodies are more important and it is also worthwhile for the Government to conduct an in-depth review in this respect. The appointment to these statutory bodies is the same as the appointment to many of the advisory bodies. Let me cite this incident as an example. As members of the Airport Consultative Committee, both Dr Raymond HO and I had, during the consultative process, clearly expressed the view that we would rather postpone the opening date in order to have an efficient airport than to rush the project in which we have no confidence. This message was crystal clear insofar as the Airport Consultative Committee was concerned. But looking up the minutes of meeting of the AA and ADSCOM, we have failed to see any record or reflection of views of this kind. If there is no conveyance of public opinions from the outside or conveyance of dissenting views from the inside, problems will obviously arise. Just like blockage of blood vessels in the human body, it will lead to paralysis of limbs and maladministration.

Therefore, in appointing heads or members of public bodies in future, the Government should abandon the thinking of so-called administrative accommodation and such products as political reconciliation so as to change these bodies into responsible administrative organs. These bodies should also act as representatives of public opinions as well as venues for assuming responsibilities and meeting challenges. People who have the basis of public opinions, who are capable and who are committed should be appointed to such non-civil-service systems as the AA, Hospital Authority and Housing Authority. Such advisory bodies should not be changed into ornamental vases, and people appointed as members of these bodies should not see the appointment as an honour only. Our way forward is to move from amateur to professional, from honour to responsibilities.

Finally, I should like to express some of my views on civil servants in the context of this incident. Mr LAM Woon-kwong, the Secretary, is not here today. Recently, he recommended a book entitled "萬曆十五年", with a subtitle called "a peaceful year". Describing some phenomena where one could find corruption wrapped in an impressive-looking package, the book is mainly about the culture of China's traditional politics. It was very brave for the Secretary to recommend this book. I would also like to recommend a book to the Secretary and that is, this Report compiled by this Council. This Report is also a very good book for it is about the modern political culture of Hong Kong. This book should bear a subtitle called "a day in happy and prosperous peacetime", depicting the crisis-ridden situation behind superficial glory. For these reasons, I think all civil servants, no matter they are serving members or new recruits, should include this book on their reading list, as well as learning a lesson from "to seek the reality instead of seeking only what the superior likes; to pursue harmony as well as the truth". I therefore support the motion.

MISS MARGARET NG: Mr Deputy, the Select Committee has done its job. The Report is before this Council and the public. Its contents and conclusions are for the public to judge. Individuals mentioned one way or another in the Report may wish to respond. Some have already done so. Officials have claimed a right to reply. They should undoubtedly be given the opportunity, and I look forward to their speeches later this evening.

As a member of the Select Committee, I have had my say, albeit subject to collective decision in accordance with the rules of this House. This evening, I seek only to make three general points in view of the response following the tabling of the Report.

The first is a point about the significance of the inquiry of the Select Committee. People have asked us, "Why does the Legislative Council insist on carrying out its own inquiry, even after the appointment of the WOO Commission was announced? Why spend so much time and money raking up old issues, now that the new airport is already working well?"

I have never been in doubt of the answer. And it is this. When a large project on public funds and affecting serious public interest has gone wrong, resulting in obvious damage to Hong Kong, justifying the use of this Council's special powers to make an inquiry, that inquiry will be carried out. It will be carried out fully and thoroughly, fairly and openly, without fear or favour, until it reaches the end, and nobody can deflect it from its purpose. This is the strong message we must send to all.

If it were otherwise, if we were allowed to change our minds depending on which way the wind blows, or if somebody else is prepared to do the job, this most powerful of our constitutional weapons will lose its force and authority. We would be open to deals and bargains. We would have compromised this Council's independence.

Mr Deputy, the Report before this Council, imperfect though it no doubt is, is utterly and indubitably independent. It deserves the community's trust and acceptance.

The second point I wish to make is the crucial importance of looking to the highest standards if Hong Kong is to continue to succeed. This is not confined to a high standard in design and technology, or in expertise, but also in the standard that we, including government officials, expect ourselves in performing our duties. In other words, a strong sense of responsibility and self-pride.

Mr Deputy, it is better that we set high standards and acknowledge responsibility when we fail to reach them, than to deny responsibility by accepting low expectations.

And the same should apply to every level of the work force.

This is nothing new. In the Report, notice is drawn to an officer in the AA who adamantly accepted responsibility, although it may be argued that the problem was not his fault. And the basis of his blaming himself was that if he had exercised greater fore-thought, he would have been able to do better and so save the public from some of the inconvenience.

This is the attitude that we should applaud.

And likewise, I note what the Chief Secretary said in a radio interview last Thursday, and I translate:

"If I had to do it again, my sensitivity would have been higher, and I would have followed up certain things more closely ...... I accept doing my best does not mean the result is to everyone's satisfaction. If I am found to have failed in my duties in this regard, I am most willing to accept the responsibility."

In other parts of the interview, she referred to various concrete lessons that she has learnt from the experience. Rising above the smart of criticism to reach for improvement is what we should all try to do. This is what criticism is all about. And I do not forget that the same principle must apply to Members of this Council and the Select Committee. If we apply a lower standard in judging ourselves than in judging others, we would then lose the respect of the public, and of those whom we criticize.

Later in this debate, no doubt, various criticism will be made on the Report. I, for one, am prepared to take it in the same spirit.

The third and the last point that I wish to make concerns the controversy on sanctions. I respect the intention of the Honourable LEE Wing-tat in proposing sanctions. I am against doing so, not because it goes too far, but because it would detract from the force of the Report; not to protect any government official or AA officers from criticism, and if for anything else, it was to protect the dignity of the Select Committee.

The force of a Report of inquiry is in the clarity of its reasoning and the justice of its conclusions, and not in the use of strong language or readiness to cap sanctions on people occupying relatively high positions. Our Report must stand or fall by its reasoning. To call attention to ineffectual sanctions is to divert attention from findings which may have real effect to expose fault and urge for change. To a certain extent, diversion has already happened.

My Honourable friend sets out a list of sanctions with graduated severity, "to be criticized" and "to be reprimanded" being the mildest. Such sanctions mean nothing to the thick-skinned and irresponsible. To the sensitive and responsible, they are gratuitous insults.

Further, "reprimand" is a word used for internal discipline. This Council may reprimand its Members, but not anyone outside it. It is, therefore, inappropriate for the Report.

As for the severer sanctions proposed, I am not convinced that we were in a position to make an all-round judgment which is fair. If it is a matter for the organizations and the persons concerned to make their own decisions, having regard to the findings of the Report, for that purpose, what can fairly be said is already within the covers of the Report.

Mr Deputy, the inquiry of the Select Committee has been a sobering exercise. Its completion is no occasion for self-congratulation but for self-examination. In that spirit, I look forward to the speeches from the Government. I humbly commend this Report to the Council. Thank you.

MR BERNARD CHAN: Mr Deputy, in these days when the three airport investigation Reports came to light one after the other, I have a lingering question in mind, "What have we achieved after costing the taxpayers well over $30 million?" The cost afforded by the community, such as the legal representation expenses for all parties involved, and the opportunity cost incurred may be over $100 million, if not more. Do they worth it?

The most prominent achievement we have, I think, is having successfully pressed for an apology from the officials who supervised the airport project. Their apology, particularly that of Mrs CHAN, was most needed at the chaotic opening of the new airport, which had deeply hurt the pride of the people of Hong Kong. The damage can never be remedied by the three expensive investigations. Instead, we have even paid a huge fee for them.

Now seven months have passed. Eventually, we have a first class airport that earns the envy of our global counterparts. Mrs CHAN's belated apology has become pointless. I think we can hardly justify the millions of dollars spent in finding out who has to be blamed. The money can be used in some better ways, such as improving the air freight industry and reducing terminal building charges and airport fees. I do believe that action sounds louder than words.

I appreciate the recommendations of the three investigative bodies in improving future infrastructure plans and managing public bodies. However, I am very disappointed about the redundancy of the investigations and how they have become witch-hunts. I hope all parties involved in the case have learnt their lessons, at the community's expense.

With these remarks, Mr Deputy, I support the motion. Thank you.

MR HUI CHEUNG-CHING (in Cantonese): Mr Deputy, after reading the Reports released separately by the Commission of Inquiry on the New Airport, the Select Committee of this Council and the Ombudsman, I would like to express my appreciation of the seriousness, fairness and spirit of striving to get at the truth of the three investigative bodies. However, at the same time, I am also shocked by the reckless management, dissemination of misleading messages, over-confidence and inco-ordination of certain organizations and their leadership.

Although the abnormality of flight information display, malfunction of the public address system, chaos of luggage handling and delay of flights had inflicted losses on arriving and departing travellers both in time and in psyche, it was fortunate that things were gradually returning to normal after one week.

However, the greatest sufferers of the new airport fiasco were import and export traders. After a series of ups and downs, cargoes rotted, letters of credit expired, freight charge increased, promises to customers were broken, orders for goods were lost and people became anxious; all of this being losses both tangible and intangible of enormous magnitude. I believe Members would still remember the joke of "Super Terminal 1" being nicknamed "Anxious Terminal 1".

Unfortunately, with limited resources and time, the Select Committee could only focus its investigation on whether the air cargo terminals were ready on the AOD. The Select Committee did not probe deeply into the causes of the malfunction of the computerized cargo handling system in the air cargo terminals. Neither did it comment on the different conclusions drawn by the two other expert Reports. The expert Report of the Commission of Inquiry on the New Airport points out that the main reason behind the paralysis of the air cargo terminals were errors in the softwares of the cargo handling system. On the other hand, the expert Report of HACTL states that faults in the flight data processing system leading to chaos of freight traffic was the main reason behind the paralysis of the air cargo terminals. After all, who is right and who is wrong? I hope that, with the Government and the AA following up the investigation Reports, a clear explanation can be given as soon as possible. Otherwise, the reliability of the cargo handling system is still very worrying. It is also unfair to the victimized import and export traders because it will be even more difficult for them to lodge claims for compensation.

Since more than 90% of Hong Kong's enterprises are small and medium enterprises, companies suffering from the fiasco are numerous and the losses are scattered. Among the trade associations I have contacted, the majority them do not intend to litigate for compensation because where the responsibility lies is still unknown. With the addition of inestimable litigation fees, these victims can only choose to tolerate in silence.

For example, 40 to 50 members of the Hong Kong Flower Retailers Association suffered a total loss of about $1 million in the fiasco, meaning that each florist has lost approximately $20,000. Some people in the trade have told me although theoretically they can claim compensation, after reading the Reports, they find that the Reports are as confused as they are regarding who is right, who is wrong and who should bear the responsibility. Therefore, they can only adopt a wait-and-see attitude now and observe if there will be any successful case of claiming compensation before they decide if compensation should be claimed against HACTL.

There is yet another example. A confection merchant wanted to fly 80 boxes of chocolate worth $30,000 to Shanghai. The cargo had been transported by a freight forwarder to the airport depot and was ready to be put on the plane when the cargo handling system was unfortunately paralysed. As a result, the cargo was stranded in the depot. Two days later, the merchant asked the freight forwarder to go into the depot to recover the cargo and try to ship it to Shanghai by other means. The cargo, however, was nowhere to be found. Eventually, the cargo handling terminals returned more or less to normal and the merchant got his chocolates after two weeks, only to find that they had all melted. Although $30,000 is not an enormous sum, neither is it small. For small and medium enterprises, if they go to court for this sum, the litigation costs incurred will be so high and the time taken so long that they would rather choose to think of themselves as unlucky and forget the whole thing.

Even for larger trade associations such as the Hong Kong Association of Freight Forwarding Agents, though the preliminary estimation of its members' total loss is as high as $62 million, it just plans to demand compensation from HACTL and does not intend to bring the case to the courts.

Why are the victims so reluctant to come forth and claim the compensation to which they are entitled? There are two reasons: firstly, from the outbreak of the fiasco till now, HACTL has never admitted its responsibility openly, nor has it undertaken to compensate for the losses of the people concerned; secondly, as the body responsible for the granting of franchise, the AA, and even the Government, has never offered clarification to the victims on the channels of claiming compensation.

Mr Anthony CHARTER, the Managing Director of HACTL, has always attributed the main causes of the air cargo terminals' paralyzation to factors external to his company. When he gave evidence at the Select Committee, he admitted that: (1) HACTL had wrongly estimated and hence failed to move 1 000 containers in time from Kai Tak Airport to the cargo handling system at Super Terminal 1; a large number of containers were stacked on truck passages as a result; (2) the staff of HACTL might not have been thoroughly familiarized themselves with the new custom clearing procedures; and (3) part of the new airport staff had only received limited familiarization training. All this is blatant negligence which may well be avoided beforehand. How can HACTL stay aloof from it completely?

Mr Deputy, the market share of HACTL is as big as 80%. One mistake made in its services is enough to harm the lifeline of the whole import and export trade of Hong Kong and tarnish Hong Kong's reputation as an international trade and freight centre ─ a reputation we have enjoyed for years. The Government must review the franchise contract signed between the AA and HACTL as soon as possible and actively study the introduction of more healthy competition into the air freight industry.

In the short run, the Government should spontaneously show concern for the import and export traders who suffered from the new airport paralysis. In case of need, free legal advice should be provided to these traders so as to help them cope with the long-drawn-out process and high litigation costs of claims for damages.

At the same time, since Hong Kong's air freight charges, including cargo terminal handling fees, are already much higher than those of the Mainland and our neighbouring competitors, the Government must remind HACTL that it should not take advantage of its franchisee status to increase charges in order to make up for any eventual compensations or the losses incurred during the paralysis of the air cargo terminals. Otherwise, it will not only be detrimental to Hong Kong's maintenance of its status as an international trade and freight centre, but will also be detrimental to the recovery of the Hong Kong economy.

Mr Deputy, I so submit.

THE PRESIDENT resumed the Chair.

MR HOWARD YOUNG (in Cantonese): Madam President, the new Hong Kong International Airport, constructed at a cost of $155 billion, formally commenced operation on 6 July 1998. But its early days of operation were marked by various kinds of errors, which brought its passenger service and cargo service to a virtual standstill. The different sectors of the community were very concerned about the problems with the new airport, and, for this reason, several investigations were initiated.

Before the inauguration of the new airport, people involved in airport-related trades and industries, including I myself, once presented a joint representation to the Board Chairman of the AA around November 1997, questioning whether or not the new airport could really commence operation smoothly in April 1998 as originally scheduled. But the AA insisted that the new airport could commence operation in April as scheduled. It was not until quite some time later, when the Airport Railway announced its inability to complete the construction works before June, that the ADSCOM Chairman, Mrs Anson CHAN, started to consider the various factors and decided in January 1998 to postpone the date of inauguration. This decision was a wise one. But for the decision to open the new airport in July, some did have reservations about its appropriateness, and this was at least the case with the airport-related trades and industries. Their reservations were indeed justified; if not, why a certain large airline still failed to complete the construction of its headquarters and staff canteen in the new airport as late as September? The deferred opening of the new airport did give the AA more time for preparation, but this did not mean that the users and commercial partners of the new airport were thus given any sufficient relief.

The Report of the Select Committee of the Legislative Council concludes that while the Chairman of the AA Board, Mr WONG Po-yan, should be held responsible for the errors which occurred during the early days of the new airport, its Vice-Chairman, Mr LO Chung-hing, should also be blamed because in the last days before the opening of the new airport, most of the meetings were in fact chaired by him. So, in that sense, we can say that he has also let the public down and must share part of the responsibility.

The tourism industry views that the confusion of the new airport during its early days of operation was closely related to the uneven composition of the AA Board, which lacks in particular any representatives from the aviation and airport management sectors. I agree that when the new airport was still under construction, there might still be a point in appointing construction and financing professionals to the AA Board. However, following the completion of the construction works, we must now focus mainly on how to manage the airport effectively, so as to enable it to yield the maximum economic effectiveness. For this reason, people familiar with the tourism, hotel and aviation industries should now be appointed. I believe that with the input of these people, the new airport will be able to operate more successfully in the future.

Attempts to find out who should be held responsible for past errors cannot possibly do much to change the situation now. We in the tourism industry all view that we must look forward ─ and with emphasis on money side of it as well. Specifically, we think that we should draw lessons from the Report and set down future directions for the development of the new airport, because to us, this is far more important than finding out what and who should be held responsible for the confusion at the new airport. And, let us not forget that following the blunders, the AA has already set up a special working for the purpose of facilitating its communication with users. As a result, problems relating to operation and inadequate facilities have been resolved one by one. As far as we can observe, the operation of the new airport has been greatly improved, much to the satisfaction of airlines and its users.

With respect to the future development of the new airport, the tourism industry maintains that the most urgent task should be to enhance the competitiveness of the new airport. Although the new airport is equipped with first-class facilities, the charges it imposes on users are exorbitant. When the Government put forward the new airport project proposal years ago, it frequently argued that without a new airport, Hong Kong would suffer economic losses worth billions of dollars, and this would adversely affect the community as a whole. So, at that time, the public were led to regard the new airport as a public utility facility which would benefit the whole community. But as it has turned out, the Government is simply looking at the new airport as a self-financing monopolistic facility. If Hong Kong is to become an aviation centre of Asia in the years ahead, and if the new airport is to bring more economic benefits to the community at large, we must plan ahead with a wider vision, so as to ensure the competitiveness of the new airport in the whole world.

The charges now imposed by the new airport include those for landing, berthing and using the airport terminal; on the whole, these charges are 63% higher than those imposed by the old airport. The new airport now charges a landing fee of $44,000 for a Boeing 747. Such a rate is lower than those charged by the Kansai Airport and the Narita Airport in Japan. But compared to the landing fees charged by all other airports in Southeast Asia, such as the $44,000 charged in Taipei, the $20,000 charged in Singapore, the $19,000 charged in Bangkok, the $16,000 charged in Manila and the $9,000 charged in Kuala Lumpur, the Hong Kong rate is much, much higher. Exorbitant airport charges will not only discourage foreign airlines from making Hong Kong one of their flight destinations, but will also force more airlines to use other airports as the stop-over points of their flights. This will certainly reduce the patronage of the new airport ─ a result that we all hate to see.

The soaring charges of our airport have added to the operating costs of airlines, making life even more difficult for them at this very time of economic downturn. More seriously, because of their inability to meet the heavy expenses, some airlines have simply withdrawn altogether from Hong Kong, or at least suspended or reduced their flights to Hong Kong. Exorbitant airport charges have thus greatly reduced the competitiveness of our aviation industry. The main aviation rival of Hong Kong, Singapore, announced recently on 1 January that it would reduce its airport charges. As a result of this, our airport charges have become even more exorbitant upon comparison. Another alarming development is that in order to reduce their prices as an attraction, some travel agencies have already switched to Macau as the departure point of their package tours. All this has sounded the alarm for the new airport.

Madam President, besides operating costs, are the exorbitant charges of the new airport caused also by other factors such as amortization, rates of returns and dividend policies? Like other facilities such as roads and public cargo handling areas, the new airport is also an infrastructure facility which should take account of its economic efficiency. For this reason, it should really reduce its charges so as to enhance its competitiveness. The new airport now imposes very high fees. Is this because there is only one airport in Hong Kong and there are no other choices? Madam President, we certainly cannot ignore the chaotic opening of the new airport, but in the long run, the Government must pay proper attention to the impact of exorbitant airport charges on our aviation industry, and it must also conduct a review on this. In particular, it must review the newly introduced airport terminal fees. As the Honourable Bernard CHAN has asked, should this new type of fees be abolished? If we do not solve the problem of exorbitant airport charges, the new airport will be unable to serve the original purpose of promoting our industrial, commercial and tourism development.

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

DR RAYMOND HO (in Cantonese): Madam President, after about six months' non-stop work including the holding of 31 public hearings, 60 closed meetings and one open meeting, and having summoned more than 27 witnesses to give evidence, the Legislative Council Select Committee investigating into the chaotic opening of the new airport has probed into every available lead and found the causes for the chaos. The truth has at last surfaced. As the Chairman of the Select Committee, I have indeed learned a valuable lesson.

The 11 persons playing instrumental roles in the incident have been named in the Report of the Select Committee and they have all been held responsible for the incident in different degrees. There are some members of the public who anticipated some moves by the Select Committee to propose due sanctions or punishment for the senior officials and people concerned who are held responsible. Despite this, the Select Committee at last only decided to play the role of a jury and not a judge and will not give any ruling. The Select Committee did consider whether or not to sanction these persons with specific measures like "to reprimand" or "to terminate appointment". The Legal Adviser also confirmed that such moves would not constitute actions beyond the scope of inquiry of the Select Committee. But after careful deliberations, the Select Committee by a majority vote decided not to propose any sanction. Sanctions should be decided by the organizations concerned, and as a matter of fact, the Select Committee cannot possibly play an role enforcement.

This issue was still hotly debated even in the 60th meeting of the Select Committee, that is, its last closed meeting which was convened to approve the Chinese and English versions of the Report part by part. In the amendment proposed by Mr LEE Wing-tat that Mrs Anson CHAN should be criticized, a few members including I myself, thought that "should be criticized" did not constitute a form of sanction and so we supported the amendment. But after detailed discussions, the Select Committee arrived at a different understanding in that criticism was also a form of sanction. Under such circumstances, the resolution is obviously in contravention of the decision previously reached by a majority vote in that no sanctions would be meted out. Therefore, at that time I proposed a motion to repeal the amendment proposed by Mr LEE Wing-tat, and it was supported by a majority of the members and passed.

The conclusions so reached in the Report are that most of the problems encountered on the first day of the commencement of operation of the new airport on 6 July last year are foreseeable. On that day, the new airport was not ready to operate as a whole. This applied in particular to the problems with the Flight Information Display System (FIDS) and the Hong Kong Air Cargo Terminals Limited. At the same time, the Report also points out that the organizations and government officials concerned should be held responsible in various degrees for the chaos on the Airport Opening Day (AOD). More importantly, the Government should learn from the 15 lessons to be learned as listed in the Report. These lessons are meant to prevent similar mishaps from happening in the future when dealing with large scale projects. I wish to highlight two of these lessons.

First, I wish to talk about lesson 5, that the head of a monitoring body for a large scale infrastructure project should be a professional. The current and former directors of the New Airport Project Co-ordination Office (NAPCO) are Administrative Officers. While they are capable administrators, they may not be fully aware of the technical implications, and this may affect critical considerations and decisions, thus resulting in their failure to warn their seniors promptly. A lot of problems had surfaced before the commencement of operation of the new airport, but all these were neglected by the NAPCO which had failed to give full play to its functions as a warning system.

The problem of the FIDS had precisely exposed the weakness in this area. The policy making parties, including the AA Board and the ADSCOM did not have a full grasp of the FIDS and the standby system. The standby system would only be activated more than three hours after a complete failure of the main system of the FIDS had been determined. Thirty to 45 minutes are required to activate the standby system. To make things worse, incorrect information or failure to update information promptly were not regarded as system failures and hence the standby system was not activated. This explains why the problems in the FIDS on AOD had led to utter chaos in passenger service. This was due to insufficient understanding of the standby system on the part of the policy makers and their failure to be aware of the constraints of the system. They thought that the standby system would immediately be activated when problems arose in the main system. So when the truth was found out after the problems had appeared, it was already too late.

I do not intend to deny the value of the system completely because it has its own merits. Due to the increasingly sophisticated nature of modern society, many problems have to be solved by professionals. So, before ways can be found to improve on the higher echelons of the Civil Service, consideration can be given to adopting certain administrative measures to allow certain capable senior professionals in the Government to be transferred to posts of Administrative Officers after undergoing proper training and assessment so that they can work together with the capable incumbent Administrative Officers. This arrangement would serve to achieve a balance of professionals in various fields in the Administrative Officer grade and would help enhance the efficiency of operation. Likewise of equal importance is that the head of a monitoring body for a large scale infrastructure project must be a professional.

On the other hand, due to the limited time available, the AA cancelled the highly complicated Factory Acceptance Test for the FIDS and rescheduled the Site Acceptance Test. The AA Management was fully aware of the risk involved. As a matter of fact, the FIDS is the single most important component of the 10 information systems installed in the Passenger Terminal Building (PTB). It is at the heart of all information systems, providing vital information for airport terminal operations. When the FIDS fails, a huge array of problems and chaos may occur in PTB. It is precisely because many persons holding senior positions in the AA Management did not have the qualifications and experience commensurate with their scope of responsibilities that has led to worse chaos. This point is the ninth lesson mentioned in the Report.

In the course of developing the FIDS, there was no plan to let local personnel acquire in-depth knowledge of the operation of the system so that prompt remedies can be made when problems arise, without undue reliance on the support of the British supplier of the FIDS. At the same time, this sort of arrangement is inconsistent with the principle of technology transfer, nor is it in line with the long-term interest of Hong Kong.

I also wish to talk about the responsibility of the relevant organizations and the key government officials. First, the responsibility of HACTL. HACTL has all along stated that the Flight Data Distribution System (FDDS) was not able to issue correct flight information on the opening day and it was the cause for the closure of Super Terminal 1 after that day. But after the FDDS became normalized, cargo service did not fully resume after a period as long as two months. This has proved that the arguments advanced by HACTL simply did not hold. On the other hand, as a large volume of cargo was forwarded by passenger aeroplanes, the problem of HACTL also affected passenger service and led to serious economic losses for the territory. The way in which HACTL handled the matter can rightly be described as bulldozing and opaque. An inflated optimism on the part of the company to reach 75% of the cargo handling capacity on the opening day contributed nothing to the solution of the problem. Consequently, the company has to take a large share of the blame.

Among the top government officials involved, I welcome the Chief Secretary for Administration who had amassed enough courage to apologize to the public "unreservedly" over the airport fiasco. As the Chairman of the ADSCOM, Mrs CHAN took on a very personal responsibility. In the public hearing before the Select Committee, she made this statement: "We believed at the time it was ready for operation on 6 July. If at any time before that date there had been any indication that the airport could not cope with either the passenger or the cargo flow on the scheduled date, the Government would not have hesitated to defer the opening date." On the other hand, in her letter of 15 November 1997 to Chairman/AA, she said that the date, once announced, would be irreversible. Under such circumstances, she should assume the personal responsibility of watching out for the indication she referred to, and of following up with investigation and suitable actions once any serious problem was observed. Of course, she was right not to agree to the AA's fixing of the AOD in April last year. Instead, the opening date was fixed at 6 July. Apparently, she was right in doing so.

Another government official named in the Report for failing to fulfil his role is the Secretary for Works, Mr KWONG Hon-sang. I think that Mr KWONG has worked wholeheartedly in following up the airport project. Had he not spared a lot of his private time in following up the project, the delays in the major works would have been more serious. On the other hand, Mr KWONG was also under the constraints of the information provided by the AA. Under the circumstances of limited or even misleading information, he was powerless to change things. He organized a team of 11 professionals and made some audit work and studied into the problem of the readiness of the airport for opening. This is some positive action to take and it is because of this reason that on the last meeting of the Select Committee, I proposed to delete the paragraph on his failure to fulfil his roles from the Report. Unfortunately, my proposal was not supported by other Honourable Members and was not passed. I wish to take this opportunity to state my position with regard to this matter. I think that Mr KWONG should be pardoned.

As for Mr Billy LAM, I am also sympathetic to his situation. In his four year-plus service as D/NAPCO, Mr LAM had co-ordinated 10 projects related to the new airport. His achievement was obvious. Later he became the DCEO of the AA but he was not in charge of the Project Division and the Information Technology Department which remained parts of Mr OAKERVEE's kingdom. Under such circumstances, what could Mr LAM have done? It is my hope, and also my wish, to make use of the opportunity offered by this discussion to say something fair for Mr LAM.

From the reactions of the senior officials after the publication of the Select Committee Report, it is clear that they have still failed to look squarely at the revelations made by the airport incident. First of all, before even reading the text of the Select Committee Report, the Chief Executive stated publicly that unless the Report was more convincing, the SAR Government would not penalize any officials even if they are named and criticized in the Report. In other words, he would take the Report by Justice WOO as final. This also shows that the Chief Executive has not paid proper and due attention to the Report compiled by this Council. I hope that the Chief Executive can make an unequivocal response in this Council after reading the three Reports. It is also hoped that his response would help restore public confidence in the Government as well as rescuing the prestige of the Government itself.

Lastly, I agree with the Chief Executive's view of "looking forward". We must also learn from our experience. We must be very careful in considering the appointment of members to the AA Board to ensure that the appointees are prepared to commit their time and effort, and that they should have relevant experience and sufficient sense of mission to assume such positions. In terms of the management, it should be reorganized to include more local professionals. A strong local team should be trained up to put the AA back onto the right tracks.

Even if the second runway will not be completed before August this year, and despite Reports that the NAPCO will be disbanded in March, I think the AA is capable of maintaining a smooth operation.

I wish to thank the staff in the Legislative Council Secretariat for their tireless efforts in providing service to the Select Committee. I also wish to express my appreciation for the Chairman of the Select Committee, Mrs Selina CHOW, for her brilliant leadership in heading the Committee through various tasks. I am also very happy to have the chance to work with other Honourable Members in the Committee for half a year.

Madam President, I so submit. Thank you.

MR SIN CHUNG-KAI (in Cantonese): Madam President, as one of the 13 members of the Select Committee, I wish to take this opportunity first of all to thank the staff of the Legislative Council Secretariat for their hard work in providing supporting service to the Select Committee. I know that they have been working tirelessly seven days a week round-the-clock since December last year. I think if the management of the airport had the same dedication to work as the staff of the Secretariat, then this catastrophe could well be averted. I am very thankful to and appreciative of the Chairman of the Select Committee, Mrs Selina CHOW, and I also appreciate the contribution made by Miss Margaret NG to the Select Committee.

Firstly, I wish to talk about the developments on 9 July 1998. On that day many government officials came to the Legislative Council to explain the matter to us. We discussed for two hours till about 12 o'clock noon. I asked Mr IP whether the Government would consider setting up a commission of inquiry. The Secretary said he would need to consult the Chief Secretary for Administration, that is, Mrs Anson CHAN. After more than one day, the Government replied that it would set up a commission of inquiry, but it did not mention whether the Commissions of Inquiry Ordinance would be invoked to set up such a commission. This demonstrates that the Government was not taking the matter very seriously, perhaps the word "seriously" may not be such a good word, or I should use the word vigilant, that is taking a vigilant attitude to handle the crisis or to deal with its aftermath. As a matter of fact, had the Government been able to deal with the entire issue as if managing a crisis, then I believe a considerable extent of the impact could have been averted.

Among the three Reports available, the one which has been most well-received by the public is the Report by the Select Committee. In the course of working in this Select Committee, our colleagues would sometimes say that the greatest lesson they have learned is to set up this Select Committee (which is of course a joke). The reason being this is really a very tough task, more so if we were to compare it to the work of the panels. The reason for its toughness is that the working style of this Committee is quite different from many other committees. As Members of the Legislative Council, we have to deal with many issues of public concern and we need to do quite a lot of work of a political nature. After becoming a member of the Select Committee, the first thing I needed to consider was that each member would have to put aside his political affiliation and to take on an objective frame of mind. That is to say, we must take on a so-called non-partisan working style, forget the differences that might exist between political parties and to view the issue from an independent perspective. We needed to make conclusions from and criticisms on the prima facie evidence and all other items of evidence we would have obtained. This was how the members of the Select Committee worked.

What we intend to say about the entire course of the inquiry has been said in the Report. I just want to add a few points, though. First, about the lessons we have learned. The greatest problem found in the entire airport incident is not the Passenger Terminal Building (PTB) but in cargo handling. That is something we all agree. For the impact that this has made is particularly severe. In terms of overall arrangements, the Government has entrusted all cargo handling operations in the airport to one single private company through the contracts signed by the AA. This is a kind of indirect monopoly which would impose a lot of constraints should the Government make any changes or try to solve some of the problems. The Government must look carefully at the various economic activities going on with a view to rectifying this monopolistic situation as much as it possibly can. Diversified competition should be brought in so that even if the current operator runs into trouble, disastrous consequences can be averted. I think this is not only applicable to the airport issue but also to other economic activities as well. Therefore, the Government must carefully consider introducing legislation on fair transaction and anti-monopolization.

Second, on the issue of information technology. As a two-edged sword, information technology can undoubtedly bring us a lot of convenience. An Advanced Flight Information Display System (FIDS) can raise the quality of our service, but improper handling can invite disaster. We need to conduct tests and make arrangement on the time required when we are to introduce any advanced technology. In the process of testing the information technology system, it was found that that insufficient care and attention had been placed on the test. Among the dozen or so management staff who attended the hearings of the Legislative Council, such as government officials and directors of the AA Board and its staff, some of them attached too much importance to information technology and assumed that it was some kind of blackhole. They did not dare to touch it, nor try to understand it. Some might have a smattering of information technology, but they failed to realize that it was a complicated system and the difficulties involved. They tended to treat it somewhat lightly. But what is most important is that most of the people simply overlooked the problems that this system might cause. I think it is not a proper mentality to pay too much attention, too little attention or no attention at all to deal with similar information technology projects. We need to cope with such problems in a proper manner, and such would entail the provision of sufficient resources. By resources we also mean sufficient time spent on tests and to attach due importance to the advice given by people with relevant experience and expertise. In this way, problems which may crop up in the future can be readily solved.

Madam President, we shall be facing a grave problem in the not too distant future, and it is a problem that the Government should join hands with the private sector to find solutions. I earnestly hope that the Government can attach the greatest importance to coping with this problem. And that is the problem of the millennium bug. There are of course, committees of all kinds formed by the Government to deal with this problem. I hope that it will not turn out to be another incident which plays havoc with Hong Kong. The millennium bug problem may well be something which is quite beyond the complete control of the Government, but it has the potentials of turning Hong Kong into utter chaos. Both the Government and the monitoring bodies must be vigilant in addressing this problem.

The Select Committee's Report has put forth 15 lessons to be learned. All of merit study and responses on the part of the Government. Regarding responses, I hope that the Government can respond specifically to the suggestions made in each of these lessons. Such responses should make it clear that which of these suggestions can be adopted later and which of them are at variance with those of the Government. The issues involved do not just include the relationship between the AA and the Government. Currently there are dozens of statutory bodies set up by the Government. We had been puzzling about the composition of these bodies before the Select Committee submitted its Report. In discussing the lessons to be learned, a question was raised in the Select Committee about whether or not the CEO should act as the Chairman at the same time. There was a lot of in-depth discussion on that in the Select Committee. Having learned the lessons from this event, the Government should really look into the question of how to deal with management staff in statutory bodies who are not doing a good job. It should consider the question of how intervention can be made, taking into consideration factors like the autonomy of the organization and the difficult situation in which the Government is caught. Though being the last or the greatest shareholder, it has to face the dilemma of trying to deal with the problem but lacks the means to do so and inviting criticisms for inaction. All these are problems which demand active responses from the Government. In the 10 to 20 or so statutory bodies, there exist many similar problems and the Government must learn a good lesson from this and make substantial responses.

I wish to respond to the comments made by Miss CHOY So-yuk in that why Mr LEE Wing-tat and other members have not demanded the government officials in the AA to resign or subject to reprimand, criticism, sanction and so on. In the course of our discussions, I had talked with Mr LEE Wing-tat about this and the fact was we did consider these issues. But why did we only demand the unofficial members to resign or that they should cease to be board members? Let us look at some very objective examples. Some officials who were in office at that time were appointed members of the AA Board, for example, the Secretary for Economic Services, the Secretary for the Treasury, and the Director of Aviation. They all attended the Board meetings. In the minutes of meetings we have obtained, they were found to have tried their best to give advice and pointed out where the problems lie. This helped the AA avoid making certain mistakes. It is because of this reason that the Democratic Party has not suggested any sanctions on them, nor asked them to resign from the Board.

These are our views. The most important thing is that we think the Report that we have compiled is a good one. I hereby recommend it to all the Honourable colleagues of the Legislative Council. Thank you, Madam President.

MRS MIRIAM LAU (in Cantonese): Madam President, seven months has passed since the opening of the new airport. After the initial chaos, the operation of its passenger service and air cargo service has basically become normal, and it seems that all has already settled down. But I must still say that no one can actually guarantee that nothing will ever go wrong again. So, the investigation Report of the Legislative Council Select Committee can provide precisely the basis on which all the parties involved can seek to perfect the operating mechanisms and practical operation of the new airport in a more extensive and intensified manner.

The inquiry Report seeks to establish a number of facts and find out who should be held responsible. Its aim is to enable those in charge to know what have gone wrong, to learn from their mistakes and to make improvements in the future. Some people want to punish all those who are to blame, but I personally think that any attempts to vent our spleen by meting out punishment will probably give people the feeling of "witch-hunting"; this will defeat the original purpose of the inquiry and will not help improve the situation either. The principal objective of the inquiry should be to identify what have gone wrong with the entire monitoring mechanism of the new airport. For this reason, we should instead adopt a more positive approach ─ after finding out who in the hierarchy of responsibilities should be held accountable for the new airport chaos, we should start with these people and conduct a comprehensive and top-to-bottom review, so as to work out some improvement measures.

The Report points out that the delivery of services at the passenger terminal was already able to attain acceptable standards one week after the opening of the new airport. Well, since the AA managed to restore normal passenger services within such a short time, it should be given a minor merit despite the major demerits which should also be given to it. However, for HACTL, we may need to give it more major demerits, because it could not manage to restore its normal services until 53 days, or nearly two months, after the opening of the new airport. This shows that something did go seriously wrong with the internal operation of HACTL, and it must be added that the problems with HACTL have made the air cargo service of Hong Kong suffer immense losses.

In July and August 1998, which fell between the opening of the new airport and HACTL's restoration of normal services on 24 August 1998, the total import/export value of Hong Kong dropped respectively by 40% and 20% compared to the corresponding periods in 1997. And, because of this, the total import/export value of Hong Kong in the whole of 1998 also dropped by 6%. According to government estimates, as a result of the new airport blunder, Hong Kong has suffered an economic loss of $2.9 billion, or 0.22% of our Gross Domestic Product. Actually, what the Government has estimated are simply those losses resulting directly from the virtual standstill of our air cargo service. But there are in fact lots of indirect losses which are quite beyond any estimation ─ freight forwarding agents may have to incur extra expenses because of the virtual standstill; they may have to face claims from goods owners or buyers because of their failure to deliver consignments on time; and their reputation and thus their ability to get orders may both be adversely affected. Fortunately, the Legislative Council Select Committee Report has found out who should be held responsible, and I am sure that this will assist freight forwarding agents and import/export merchants in deciding whom they should sue for compensation. That way, their economic losses can be partially covered.

I think HACTL cannot possibly deny its responsibility for the virtual standstill of our air cargo service immediately following the opening of the new airport. The Report reveals an agreement signed between HACTL and its construction contractor to expedite the construction of the Super No. 1 Air Cargo Terminal, with the objective of getting an occupation certificate before 29 May 1998. But in the end, what the contractor managed to get was just a temporary occupation certificate issued on 3 July. Obviously, when it set down 29 May as the deadline for obtaining an occupation certificate, HACTL should know fully well that it must need sufficient time to test the various computer systems and train up its own staff. So, when it failed to get an occupation certificate on 29 May, and when it still failed to get one more than one month later, in early July, HACTL should realize that it would not have enough time to complete the preparatory work required. What is more, it should also be aware of the consequences of inadequate preparation. Regrettably, HACTL never asked the AA or the Government to defer the inauguration of the air cargo terminal, nor did it ever plan it relocate only part of its service to Chek Lap Kok while retaining the rest in Kai Tak. Instead, it told the AA and the Government that it could commence operation at the new airport as scheduled. Besides, HACTL should also know that if it was to transfer as many as 1 000 containers from Kai Tak to the Super No. 1 Air Cargo Terminal overnight, it must make adequate and proper handling arrangements, or else the functioning of the air cargo terminal will be hindered. So, in the absence of any proper arrangements, things really went wrong as should have been predicted. We are now talking about a company which has handled its air cargo service very professionally and efficiently for the past 22 years. But this time around, it has allowed the Super No. 1 Air Cargo Terminal to commence operation without any adequate preparation. So, we can say for certain that it has committed a grave error in professional judgement.

Over the past 22 years, perhaps really because of its outstanding performance, or perhaps just because of sheer luck, HACTL has never made any serious mistakes in its operation. That is why it has become very confident, or indeed over-confident. However, to be fair, if the Government and the AA had had a high degree of vigilance, even though HACTL was indeed over-confident, things would still not have gone wrong so badly. Regrettably, the Government and the AA, themselves also being over-confident, simply trusted HACTL blindly. In the end, a tragedy resulted. The New Airport Projects Co-ordination Office and the AA both knew that a temporary occupation certificate was issued as late as 3 July, only three days before the opening of the new airport. But no one had thought that this was a problem, and a big problem in that. And, the AA had never monitored closely the construction progress of the Super No. 1 Air Cargo Terminal either.

The airport of Hong Kong is the busiest in the world in terms of air cargo volume. During the time of Kai Tak, HACTL handled all our air cargoes, and now, it still handles about 80% of them. So, it is in a sense very much like the lifeline of our air cargo service. Its staff should know that should its operation go wrong in any way, the air cargo service of Hong Kong would be paralysed. That is why a proper contingency plan is absolutely required. But what surprises us is that the so-called contingency plan of HACTL simply failed to function at the most critical moment. HACTL once explained that the circumstances at the Super No. 1 Air Cargo Terminal on the AOD and the shortage of time for staff to receive on-site training had made it impossible for the contingency plan to function as desired. But how can we have any confidence in such a contingency plan, which may simply fail to function under some particular circumstances? For this reason, HACTL, the AA and all the government departments concerned must now take prompt actions to draw up a proper contingency plan, so as to cope with the recurrence of any accidents which may affect the operation of the air cargo terminal. And, the contingency measures must both be detailed and comprehensive, because computer failures may not be the only source of trouble. For example, a power failure occurred at the Super No. 1 Air Cargo Terminal on 15 October 1998. Though this did not cause a complete standstill of our air cargo service, cargo delivery was still delayed very seriously in the following two weeks.

The Select Committee has focused its attention on HACTL, but the other air cargo terminal at the new airport, the Asia Airfreight Terminal Company Limited (AAT), did also experience serious confusion shortly after the opening of the new airport, only that the Select Committee did not conduct any investigation in this respect. The franchises of HACTL and AAT were granted by the AA. For this reason, the AA is obligated to monitor their operation, so as to ensure that they can function smoothly and efficiently. In this connection, I think that the two air cargo terminals should submit to the AA regular consultancy Reports on their operation and facilities. This can enable the AA to have a clear idea of how the two air cargo terminals are actually operating, thus making it possible for it to step up its monitoring of them.

According to the Report, the inadequate co-ordination among the various service-providers was also one of the reasons for the air cargo terminal confusion on AOD. In order to address this problem, the AA already set up an airport service promotion committee in the middle of September, and this body is charged with the responsibility of co-ordinating all those involved in air cargo service, including airlines and the freight forwarding industry. In addition, HACTL and the AAT have also started to hold their own regular meetings with the freight forwarding industry, so as to resolve problems with their operation. Such a practice was absent in the Kai Tak era, but has now been proved to be very useful. I understand that the freight forwarding industry would very much like to see the continuation of this arrangement.

The removal of our airport from Kai Tak to Chek Lap Kok in a matter of just one night is actually a world record; when there are similar operations in the future (I do not know when; maybe several decades later), a lot can in fact be learnt from this successful experience. But then, of course, the ensuing chaos has indeed tarnished the whole new airport project; the inquiry findings and the criticisms may well make some people unhappy. But I do hope that all those involved can boldly face the music and accept the criticisms with an open mind. I also hope that they can learn a lesson from this bitter experience and avoid similar mistakes when handling large scale infrastructure projects in the future. Only this can enable our community to make progress.

Madam President, I so submit.

MR TAM YIU-CHUNG (in Cantonese): Madam President, although we are proud that we have a first-rate world class airport today but the confusion and problems at the initial stage of the operation of the airport, just like the scenes of the classic movie Gone with the Wind, is unforgettable for a while. We can draw lessons from past incidents we have not forgotten. In these two weeks, three investigation Reports on the new airport have been published, revealing the causes of the problems. We can make reference to the various suggestions made in the Reports when we carry out large scale infrastructure projects in future. As regards the structural problems exposed, we should attach importance to a lesson to be learnt, that is, how we can establish a mechanism of co-ordination that can effectively co-ordinate, plan and supervise the conduct of large scale infrastructure projects or handle social incidents.

Large scale infrastructure projects or social incidents will definitely involve many areas of work, each of which is innately professional. However strong the professional ability of a person may process, he cannot possibly be fully familiar with all areas of work. Therefore, it is not inappropriate in itself for an all-rounder to lead professionals. The most important point is that the work of the all-rounder and the professionals should be adequately co-ordinated. A feasible method is that this all-rounder should concentrate on promoting communication between his subordinate departments and co-ordinating their contradictions and progress while the professionals should be devoted to professional tasks. Nevertheless, an explicit mechanism should be established for co-ordinating and supervising the co-operation between the all-rounder and professionals. This way, they will be accountable for their work and co-operate.

One of the problems we have identified in the new airport incident is that, throughout the whole course of development, the Administration had concentrated on the construction works and paid relatively less attention to operational management. At the supervisory level, the Secretary for Works was the only Policy Secretary familiar with engineering and construction, as a result, there was insufficient expert input in operational management. Even if there is a greater number of professional Policy Secretaries, it does not mean that everything is settled and all is well.

In respect of the new airport incident, people also criticized about an overlapping framework and an ambiguous division of rights and responsibilities. We can all see the seriousness of the harm done. Therefore, the importance of an co-ordinating mechanism that has an explicit framework and an unambiguous division of rights and responsibilities is indisputable. However, given the many related policy areas and a lot of co-ordinating work, this co-ordinating mechanism necessitates an enormous input of time and devolution of power at a commensurate level. It has been proved after the new airport incident that relying on the NAPCO alone to play a co-ordinating role is inadequate.

What lessons should the Government draw from the new airport incident? How should it adjust the mode and system of administration? They are not only urgent tasks for the Government but also topics for discussions by the community. Madam President, if the recent Reports made by the press are true, theme parks such as the Disneyland are going to be built in Hong Kong. We hope that the new airport chaos will not recur. If a family find after they have bought admission tickets that Mickey Mouse and Donald Duck would not appear on stage as the machines have broken down, it is really disappointing!

I so submit.

MR MA FUNG-KWOK (in Cantonese): Madam President, I have taken part in the inquiry into the new airport incident and met rare challenges.

Insofar as I understand it, the task of the Select Committee is to investigate into the truth and causes of the problems and confusion at the initial stage of the Hong Kong International Airport opening. In the course of the Select Committee's work, members could sincerely co-operate and make efforts to find out the truth and responsibilities in a fair, objective, truth-seeking and serious manner. The completed Report is the fruit of the joint efforts of its members. Most of the contents and conclusions of the Report and the experience and lessons so acquired represent my views, therefore, I do not want to waste time repeating them here.

The Select Committee mainly focused its investigation on the relationships between the ADSCOM, the NAPCO, the AA Board, the AA Management and HACTL and the causes of the problems at the initial stage of the new airport opening, as well as deducing from the incident experiences and lessons. I believe that this Report can give the public a clear understanding of the responsibilities of the bodies and departments having direct influence on the initial operation of the airport and the direct causes of various problems.

However, if we have to gain a comprehensive and thorough understanding of the long-term background and causes of the problems at the initial stage of the airport opening, we may have to start with the plan for the construction of the new airport. Unfortunately, given the limited time and resources, the Select Committee had not considered the problems in the light of the Sino-British political disputes that started to emerge at the beginning of the new airport project.

At the initial stage of the construction of the new airport, as the Chinese and British sides lacked mutual trust and were mutually suspicious, they had arguments even though they agreed on the establishment of a Provisional Airport Authority. In view of the working needs, the Government established bodies such as the ADSCOM and the NAPCO and played a dominant role in regard to the administrative and personnel matters in relation to airport construction. The subsequent establishment, composition and appointment of the AA also had an indistinct touch of political compromise instead of being made to meet the actual working needs and effectiveness. Under such objective political circumstances, the relevant bodies lacked communication or tacit understanding, and their duties were ambiguous and overlapping. Furthermore, there was a grey area in the accountability, appointment and dismissal of senior staff. As these objective problems had not been promptly rectified after the reunification, it foreshadowed the problems surrounding the new airport opening.

Moreover, the problems with the air cargo terminals are another issue worthy of discussion. While it is indubitable that the HACTL management should bear the greater part of the responsibility, the way in which the Government acted also warrants a review. During the Kai Tak years, HACTL was properly run. When the Government was preparing for the construction of the new airport, it failed to consider from a strategical point of view the long-term interests of Hong Kong or fully consider opening up the market for competition. Instead, it gave HACTL the franchise to run 80% the air cargo handling operations. In the subsequent course of construction, as the Government had blind trust in the past achievements of HACTL, it had unreasonably trusted in HACTL and lowered its guard to the risks that might be incurred. Finally, we have evidently learnt a bitter lesson. As a result, the air cargo operations in Hong Kong were at a standstill, we suffered great economic losses and our reputation was seriously tarnished. I do not want to accept any groundless speculation made much in the same way as the former government had defended traditional British investments. Rather I hope that the Special Administrative Region Government, in dealing with the approval and extension of important franchises or monitor their performance in future, will base its decision on the long-term interests of Hong Kong in order to safeguard the overall interests of Hong Kong people in a highly responsible manner.

In its Report, the Select Committee has made no suggestions on what punishment should be meted out to those people who should be held responsible. I absolutely agree to this and a consensus was reached in the Committee as most Committee members understood that the major task of the Committee was to find the truth and affix responsibilities. After the publication of the Report, the organizations to which the persons concerned belong should consider the Committee's Report and other relevant factors before making a decision as to whether these persons should be penalized.

At the final stage of drafting the Report, Committee members put forth various amendments. A member suggested the inclusion of the sentence "Mrs Anson CHAN should be criticized for failing to ensure the smooth and effective operation of the new airport on its opening". I had supported this for I thought that this view matched mine. Later, another member suggested that the word "criticize" denoted "penalize" and it therefore ran contrary to the consensus reached by members earlier on that no suggestions would be made about punishment. After discussions, the Chairman asked members to vote on whether the word "criticize" denoted "penalize". As a result, most members agreed that the word "criticize" denoted "penalize". Although I did not agree to this interpretation, I respected the decision of the majority and the consensus reached by members earlier on that no suggestions would be made about punishment. Adhering to the same principle, I finally voted against the inclusion of a suggestion to criticize Mrs Anson CHAN. Some people later said that I was making a swift change. I am baffled and I find it necessary to make this clarification here.

Madam President, after the publication of the Report, the response made by some government officials was disappointing. I would like to take this opportunity to remind them that Hong Kong is no longer a colony since 1 July 1997, but a highly autonomous region in which all officials must be responsible to the public. The public expects to have an accountable Civil Service and officials who would boldly shoulder accountability. I hope that the officials in office will soon adjust and reflect on their mentality and attitude so as to establish a civil service culture of which civil servants will boldly take up responsibilities and be good at heeding public opinion. Otherwise, the civil servants will be lagging behind, and they will not be able to guide the public or gain their support.

Madam President, although the Select Committee's work has come to an end, I do not want this to signify the conclusion of everything. In fact, I believe that the general public still earnestly hopes that government officials will learn a lesson from this incident and perform better when they handle large scale projects in future.

It is worth mentioning that Mrs Selina CHOW, the Chairman of the Select Committee who has performed her duties with all her heart and all her might, Miss Margaret NG who has made professional contributions, and the Legislative Council Secretariat which has been wholeheartedly devoted to the task, deserve our respect.

With these remarks, I support the motion. Thank you.

MR AMBROSE CHEUNG (in Cantonese): Madam President, like other Honourable Members who have the opportunity to take part in the inquiry into the new airport fiasco, I should like to first express my appreciation for the excellent chairmanship of Mrs Selina CHOW and the support provided by staff members of the Legislative Council Secretariat.

I have drawn a lot of experience and learnt many lessons over the past four months in working on the inquiry. Apart from reminding myself to consider the issues in a fair, independent and objective manner, I had also imagined from time to time myself being in the shoes of the Government, the AA and the AA Board to see what decisions I would have made if I were in those positions.

Looking back on the past seven months, the operation of the new airport has gradually been put back on the right tracks and attained a world class standard comparable to that of other international airports. For this reason, the fiasco on 6 July was all the more regrettable. On the one hand, I do understand that both the Government and the AA have put in their best efforts, yet on the other we cannot deny that 6 July was a blot on our history.

In respect of this inquiry, I should like to raise three points. The first one is related to the issue of sanctions; second, on the way the Government sees the role played by experts; and third, the response of the Government to the Select Committee's Report.

I should like to start with the issue of sanctions first. After the publication of the Report of the Select Committee under this Council, there have been a lot of views as to whether sanctions should be suggested in the Report. In my opinion, the most important task of the Select Committee is to find out the truth of the matter and the causes of the fiasco, with a view to drawing on the lessons learnt to avoid making the same mistakes in the future. As regards sanctions, I consider that the Select Committee is very much different from a law court technically. When we talk about court decisions, we would refer to court hearings and final verdicts, and the court will pass sentence and sanctions after it has delivered its verdict. In this connection, there are plenty of precedents for the court's reference; and in many cases, the relevant laws would also set out many standards which judges could use as guidelines. On the other hand, the hearings conducted by the Select Committee are meant to facilitate the making of judgements regarding the information we have obtained and drawing of conclusions. I must stress that in the conclusions of the Report, we have already criticized many organizations involved, including the Government; besides, we have also criticized individual persons of these organizations. Should we go one step further and recommend that sanctions be imposed on those persons by the public or the organizations concerned? What kind of standards should we be referring to then? What kind of standards should we use to determine whether or not an individual should be criticized, reprimanded, suspended from duty, required to resign, denied of any renewal of contract upon the expiry of the existing one, or, for those who have completed their contracts and left, be required to make compensatory payments? What kind of standards should we be referring to? There were none. Due to the unavailability of standards, I decided not to lend support to the idea of proposing sanctions at that time. This is because I considered it a dangerous move to reach conclusions in the absence of any standards. I held that the Select Committee should put forth its views regarding the whole incident, and that we should only comment but not impose sanctions on any persons. Should the Select Committee recommend other relevant organizations to criticize or reprimand the individuals concerned, suspend them from duty, or impose sanctions on them, we would be treading a sentencing-passing path; to this, I cannot lend my support.

The second point is, from my experience as a member of the Select Committee, I gather that it should be time for the Government to clearly set out the role and administrative structure of its experts, as well as their relationship with the bureaucrats. In this connection, I shave the Honourable TAM Yiu-chung's point that the existing practice employed by the Government is contradictory and in need of a set of standards. The bureaucratic system advocated by the Government is in general a system of all-round non-specialist government officials. Basically, such a system should not pose any serious problems. The crux of the matter is that under this system, the role of experts would vary from time to time. For instance, how many members of the ADSCOM, the NAPCO, the AA Board and the AA Management really have any practical experience in the construction, operation and management of an airport? I think we should all reflect on this question, since the information in this respect is readily available. If there are any needs for supplementary expert advice, which level of the structure should one turn to for advice? Let me use HACTL as an example. In this connection, the Government had accepted HACTL's guarantee that the air cargo terminal will be ready for operation by 6 July on the ground that HACTL had the expertise, good reputation and a record of reliable operation. This was a very expedient decision, but was it a very responsible decision? I doubt it very much.

On the other hand, the expert advisers employed by the Government like those specialists working under the NAPCO and even the AA advisers had kept on pointing to the many problems of the new airport, yet the Government had chosen to ignore their warnings. Since the Government is taking in only those that are pleasing or convenient to it, we cannot help wonder if any of the more than a dozen to 20 Policy Bureaux is really led by specialists. The Works Bureau and the Department of Justice most probably are; however, apart from these two, are there any more Policy Bureaux that are really led by specialists? Not that Policy Bureaux must be led by specialists, but the Government should at least let us know at which level of the hierarchy will expert advice be incorporated. Should experts be put under the Policy Bureaux, may I know whether expert advice will be available to the higher levels like the Chief Executive and the Executive Council for check and balance purposes? I think the Government should learn a lesson from this incident and make an effort to enable both the non-specialist government officials and the experts to complement each other, with a view to consolidating their tie.

The third point I wish to make is related to the response of the Government after the publication of the three inquiry reports. The July 6 incident is indeed a considerable challenge, but the Government find a even greater challenge in the way it should respond to the recommendations and criticisms made in the three reports. It is a much greater challenge because a lot of wisdom will be required. In this connection, I should like to make a suggestion. I hope the Government would not just stop at making an apology, though an apology would undoubtedly be much appreciated. I hope that the Government would not make any comparisons among the reports and say which one is more authoritative and credible before it has finished reading the three of them, and that it will not choose to respond only to the comments which it considers more reasonable or more well-supported. Who should be in the position to say which report is reasonable or which is the most well-supported one? I suggest the Government making an account to members of the public. As a matter of fact, I believe what the public would want to see most is how the Government is going to act in the future.

To begin with, apart from making an apology, the Government should set up a committee, the members of which should not have participated in any of the three inquiries. This is to ensure that the committee could evaluate the three reports in a comparatively fairer manner, and then set a schedule for giving an account to both the public and the Legislative Council. After examining the three reports, the committee should put forward its proposals and set a date at which the Chief Executive could inform this Council of the views of the Government, so as to enable us to know which recommendations it accepts and which it does not. It is also my hope that the proposals put forward by the Government would cover the following aspects: first, the ways to improve the existing mechanism, structure and organization, as well as the ways to improve the supervision over the operation of existing public organizations; second, in regard to human resources, the choice between non-specialists and experts; third, the balance and share of power and responsibility among the various levels of the hierarchy; fourth, the formulation of a fair system of awarding merits and demerits and an accountability system for the various levels of the hierarchy, with a view to enabling the persons who have accepted the job or appointment concerned to understand from the very beginning both the rules of the game and the responsibilities they have; and fifth, the efforts to be made by the Government to give due respect to the advice provided by experts working under the relevant organizations, so as to enable their views to be "heard".

Finally, I wish to point out that, if the reports I have read in certain newspapers were correct, the Chief Secretary for Administration has referred to the formulation of some codes of practice. I support the formulation of such codes. In regard to the codes and the proposals to be put forward by the Government as a whole, I think the Government should drawn up a schedule for the three reports to be assessed by an independent committee before the Chief Executive gives an account of the entire matter to both this Council and the public. I hold that only in this way can the Government constructively learn lessons from the incidents and then proceed forward.

Thank you, Madam President.

MR CHAN WING-CHAN (in Cantonese): Madam President, I have a sore throat and hence did not intend to speak on the motion at first; however, in view of the importance of the subject in question, I cannot help but rise to speak briefly.

I could still recall that on 6 July last year when the fiasco of the new airport at Chek Lap Kok took place, I had immediately given a notice to the Legislative Council Secretariat to ask an oral question "on the ground that it is of an urgent character and relates to a matter of public importance".

However, I subsequently learnt that the Honourable James TIEN, Chairman of the Panel on Economic Services, had sought the agreement of the Chairman of the House Committee as well as the permission of the Honourable President to ask an "urgent oral question" at the meeting of this Council on 15 July; as such, my question was deferred to a forthcoming meeting.

I was very much concerned with the fiasco of the new airport at Chek Lap Kok since it commenced operation. In view of the fact that the operation of the air cargo terminals at the new airport had almost ground to a standstill, I raised a number of questions regarding the impact of the incident on the economy of Hong Kong, including the impact on Hong Kong's tourism industry and the remedial measures to be taken, the blow suffered by local small and medium enterprises, the availability of a mechanism to handle compensation claims for goods turned rotten due to the delay in air freight services, as well as the role of the ADSCOM in the incident and so on.

A newspaper referred to the question I had raised as "the most lengthy oral question"; I should be grateful for that remark. While the two inquiry reports on the new airport fiasco are several inches thick, the thickness of the Report of the Select Committee of this Council has even exceeded a foot; from this we can see that the problems involved in this incident are not only numerous but also very complicated. How could I not raise a few more questions on the fiasco of the new airport then?

By the time my question was raised, the Commission of Inquiry led by Justice WOO had already been set up; therefore, Mr Stephen IP, the public officer to reply my question, had made use of Justice WOO's Commission of Inquiry as a pretext for not answering my question directly. What is more, the Honourable President had also spent 20 minutes to study the Rules of Procedure before giving her ruling.

Indeed, this Council has a history of conducting inquiry into matters of public importance. However, this is the first case in which a Justice has been appointed to conduct an inquiry; besides, this is also an unprecedented case in the history of Hong Kong in which three committees are conducting inquiries into one single incident.

In regard to the inquiries, the one conducted by Justice WOO has not only statutory footing but also authority. For this reason, Honourable Members were more prudent in their then speeches regarding the new airport fiasco, some even kept aloof from the whole matter to avoid getting involved in legal disputes.

Government officials did not answer my questions but that should not be a problem, since my questions have now been addressed fully in the Report of the Select Committee. In this connection, the Report has pointed out who should be held responsible for the new airport fiasco and where did the crux of the problem lie. All the issues involved in the incident have all been elucidated very clearly.

The Select Committee investigating the new airport fiasco has referred in its Report to 15 lessons and pointed out that the failure to allow sufficient time to test and try the Flight Information Display System (FIDS) was the major cause of the chaos on the Airport Opening Day (AOD). As a matter of fact, paragraph 4.103 of the Report has pointed out that the FIDS had not gone through Factory Acceptance Test beforehand. During the period between 18 January and 14 June, the FIDS had only gone through five trials but crashed in two of them. Just now a number of colleagues have spoken on this point and so I am not going to dwell on it anymore.

I should like to specifically point out one thing and that is, the three reports on the new airport fiasco have all concluded that the choice of 6 July as the AOD does not involve any political reasons whatsoever, the date was not chosen to enable the Head of Country to officiate at the AOD. I am really very much pleased to learn that.

Regarding the Report of the Select Committee of this Council, I should like to make the following remark: "money saving, hardworking, results outstanding".

Madam President, "money saving" of course refers to the limited cost of only $4.36 million, compared to the more than $26 million report of Justice WOO and the more than $10 million report prepared by the Ombudsman, Mr A SO; as for "hardworking", I am of course referring to the efforts made by members of the Select Committee and the Legislative Council Secretariat around the clock.

The Select Committee's Report has identified 11 government officials and senior staff members of the AA who should be held responsible to different extent for the incident, including ADSCOM Chairman Mrs Anson CHAN, AA Chairman Mr WONG Po-yan, Dr Henry TOWNSEND, Mr Chern HEED, Mr Kiron CHATTERJEE, the Hong Kong Air Cargo Terminals Limited and so on. This is indeed one special feature of the Report.

As regards the outstanding results, I do not think I need to expound on that anymore.

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

MISS CYD HO (in Cantonese): Madam President, when the new airport opened, there was huge confusion with both its passenger service and air cargo service. These problems, regardless of their degree of seriousness, all point to the inadequacies of the management staff responsible for implementing the new airport project, one example being their inability to integrate themselves with front-line staff, which led to an absence of team spirit so necessary for reducing internal friction and antagonism and for the efficient achievement of objectives. Another example is their failure to make the best use of available information, such as the weekly reports of the NAPCO. As a result, they missed many opportunities to remedy the situation.

Although the new airport chaos has already occurred, and although we cannot possibly turn the clock back and give ourselves another chance to rectify the many errors made, we should still learn from our mistakes with a proactive attitude. All people, be they the staff directly involved or simply onlookers, should seriously and wholeheartedly review the new airport fiasco and bear it in mind when handling similar projects in the future, or else the prices we have paid this time around will all be wasted. If Hong Kong fails to learn a lesson from this incident, similar mistakes will only repeat themselves, albeit in different forms, maybe.

If we want to achieve progress, we must have the courage to find out our own mistakes and face the consequences. For this reason, the Frontier now demands the resignation of Mrs Anson CHAN, the Chairman of the ADSCOM. We hope that she can prove with actions that she is a civil servant who is willing to assume responsibility for the mistakes she has made.

In order to substantiate our demand for the resignation of the Chief Secretary for Administration, we must give an analysis of her management approach. As is clearly stated in the Report of the Select Committee, the Chief Secretary for Administration must assume a special responsibility for the incident. In this connection, we really need to discuss a number of points in further detail.

As pointed out by the Honourable LEE Wing-tat a moment ago, the performance of the Chief Secretary for Administration in the new airport project is marked with both positive contributions and mistakes. There is no doubt that her decision to defer the opening date originally scheduled in April was the result of a very wise analysis. And, given all the available information and indications, one must also agree that hers was in fact a very resolute decision. We have absolutely no doubts about that. But having deferred the opening date, she never again spent the same amount of time and efforts on monitoring the progress of the project, nor did she ever carefully assess whether or not 6 July was a good time for opening the new airport. This is obviously negligence on her part.

As far as her management approach is concerned, we think that this time around, she has applied a wrong approach ─ a high-handed, "this-is-an-order", approach. The Report has quoted the Chief Secretary for Administration as saying to the effect that once announced, the opening date would be irreversible. While management staff are supposed to set down specific targets for their teams, they must, before doing so, clarify clearly with their staff whether or not the targets are at all attainable. If the targets are found to be unattainable, the management must first help their staff identify and overcome their difficulties before setting down any alternative targets, mutually acceptable targets; that way, they will win the wholehearted co-operation of their staff in the achievement of the targets. Any "this-is-an-order" or "disobedience-punishable-by-decapitation" approach should not be adopted because staff will become too scared to raise any questions. In the end, all problems will be swept under the carpet, and the poor fellows who discover all these problems later on will have to tidy up the whole mess. Madam President, a high-handed and unfriendly manager who always makes his own decisions without consulting his staff cannot possibly make his team support the targets he has set down, nor can he ever make his team committed voluntarily to the achievement of the targets concerned.

Second, in a knowledge-based society where team spirit as a management concept is given so much emphasis, differences in ranking are no longer that important, and neither is the distinction between management and professional posts. So, the job-related expertise and opinions of all should be respected and regarded as reference information on works progress, which should be taken into account whenever the schedule of works is revised or contingency measures drawn up. Unfortunately, the weekly reports of the NAPCO obviously did not receive due attention. Since the warnings sent by these weekly progress reports were largely ignored by the ADSCOM, I suspect that the ADSCOM might have wanted to take only the views of senior management, with the result that the opinions of low-ranking staff simply could not reach the top level. I even suspect that the ADSCOM was subconsciously influenced by the erroneous thinking that front-line staff, or more junior staff, would invariably tend to exaggerate the seriousness of everything, so as to make it easier for themselves to evade responsibility for all future problems.

Madam President, I understand that some top management staff who did not trust their subordinates had the practice of asking their staff to fill out weekly progress forms, and the aim was to make their subordinates complete their weekly tasks before submitting their reports. The underlying assumption of this practice is that the working attitude of staff is the only reason for work delay; this really reveals a lack of trust in front-line staff. Actually, if there is inadequate communication among different sections, if top management staff cannot keep abreast of the latest progress, and if there is thus an absence of any co-ordination, coercion simply will not work; a single manager at the top simply cannot be expected to reverse the situation. And, since the information provided by staff cannot reach the top level, it will be impossible for the latter to prescribe any correct remedies. Here, I must take this opportunity to remind those government officials responsible for tackling the "millennium bug" that they must make good use of the progress reports they receive. They must not think, "superstitiously", that once top management staff have put down their signatures, the problem will be satisfactorily resolved. Instead, they must communicate regularly with front-line staff, so as to keep abreast of the latest progress.

Third, we think that the Chief Secretary for Administration has failed to properly address the problem of incompetent staff, by taking the painful decision of getting rid of them in exchange for the long-term good of the whole project. According to the Report, as early as September 1996, the ADSCOM already came to the conclusion that the Chief Executive Officer of the AA was not good enough for the job and a final warning might be required. But in the end, the ADSCOM did not take any action to replace Dr Henry TOWNSEND. Instead, the contract with him was renewed. We do not know the reasons for this. Was this because there was a need to keep him, so that there would be someone to shoulder all the blame later? Or, was this because of any unjustified belief that a top executive can be relied upon to reverse the situation? Whatever the reason, the decision-makers concerned must be held responsible for retaining such an incompetent Chief Executive Officer.

So, because of her improper management approach, the Frontier demands the resignation of Mrs Anson CHAN. It is hoped that she can set up an example, to show that civil servants do have the courage to face the music. One positive effect of her resignation will be that civil servants can thus learn a good lesson.

Some people argue that Mrs Anson CHAN should not resign and should continue to work hard despite all the criticisms against her. According to them, this is far more difficult than resignation, the pain of which will not last too long anyway. They further argue that this can also show a sense of responsibility on her part, because if she resigns so very easily, the Civil Service will lose their leader and chaos will result. If this really happens, she will only become more guilty, these people argue. But the point is that during his or her term of office, a good leader should try to train up some competent successors. And, he or she must also try to establish a good operating system, so as to ensure that the departure or otherwise of one single person will not affect the entire system. I believe that the Chief Secretary for Administration must have already done so. Hence, I hope that she can now accept the historic mission given to her, forget about her personal interests, set up an example of assuming responsibility for mistakes in the Civil Service and resign as demanded.

I wish to clarify that by talking so much about the management approach of the Chief Secretary for Administration, I actually do not want so much to level any personal attacks at Mrs Anson CHAN as an individual. The real reason is that I must focus on the points mentioned above as far as the limited time permits, because we have put forward a direct and specific request for the resignation of Mrs Anson CHAN. This is in fact a show of our respect for her. I must of course add that besides the Secretary for Chief Administration, many other people also have to be held responsible, an example being the Board of Directors of the AA.

I also wish to raise the point that whenever the Government appoints any members of the public to any important public service posts in the future, it must carefully consider whether the prospective appointees are really fit for the appointment both in terms of time and psychological commitment. And, the prospective appointees themselves must also carefully assess whether they really have the time and enterprise to discharge the responsibilities required. They must not regard public service appointments as mere honourary titles. If they do, they will jeopardize the whole thing.

Madam President, we of course need to thank the Select Committee and the staff of the Secretariat for working so hard, burning the midnight oil to produce such an honest and straight inquiry report. Finally, if the relevant government officials really think that they have not been not given any chance to respond to the views of the Select Committee, I hope that they can give their sincere feedback later on at this meeting. I further hope that the Chief Executive himself can come to this Council to hold detailed discussions with us.

Thank you, Madam President.

MR AMBROSE LAU (in Cantonese): Madam President, the new airport chaos has caused great damage to the economy and image of Hong Kong. Three investigation reports, including the one compiled by the Select Committee of this Council, have pointed out the causes leading to the chaos, responsibilities that relevant bodies and individuals should assume, related lessons and improvement measures from different angles and in different degrees. Although the airport chaos has basically nothing to do with the Chief Executive, Mr TUNG Chee-hwa, he has taken the lead in displaying the spirit of assuming responsibility by taking the initiative to apologize to the public. Under the lead of Mr TUNG, officials of the relevant policy bureaux have also expressed their "unreserved apology" to the public.

What matters is we should learn a lesson from the airport chaos. In particular, we must grasp the crux of the disaster firmly and make improvement so as to avoid making the same mistake again in future.

Madam President, the Select Committee Report reveals that both the ADSCOM and AA Board have failed to fulfil the supervisory duties assigned to them. The crux of the problem has also reflected the Government was unable to monitor statutory bodies effectively. Although the management of such public bodies as the AA does not belong to the civil service system, it is actually tantamount to a "super civil service system" in terms of both actual power and remuneration. It is also an "independent kingdom" of poor transparency and disproportionate balance of rights and responsibilities. As such, I think the most essential lesson we need to draw and the most important area we need to review in order to make improvement is how to monitor statutory bodies effectively.

With extremely poor transparency in the criteria, methods and procedures of employing the management staff of public bodies, it will cause great trouble and lead to disastrous consequences, like what the AA Management, if the wrong people are appointed. The Select Committee Report points out that the AA Management "should bear the biggest and most direct responsibility". But the public and even this Council are not well-informed as to according to what criteria against which the management staff of these statutory bodies were employed and what responsibilities were prescribed in their employment contracts. Moreover, they were not monitored by the Executive Council, Legislative Council, Audit Commission, Office of the Ombudsman and the public. The Government has, on past occasions, refused to make public the criteria, channels, methods and procedures for employing AA Management staff on the ground of "commercial secret". For instance, the announcement made by the Government at the end of November last year that Dr Henry TOWNSEND, the Chief Executive Officer of AA, could receive gratuity as is the practice has triggered off strong dissatisfaction in the community. Some members of the public asked the AA to make public Dr TOWNSEND's employment contract. And in response, Dr TOWNSEND stated that he would take legal action. Under the circumstances that there was no concrete evidence proving that he had to be held responsible for the airport fiasco, he could still receive the gratuity and leave the territory. Judging from the fact that such AA senior management staff members as Dr TOWNSEND were still protected by the contracts, despite having made the big mistakes, we must first of all enhance the transparency and accountability of the appointment of management staff of such statutory bodies as the AA in order to prevent similar incidents from happening again in the future.

The new airport fiasco has, first of all, illustrated the fact that some principal members of the top AA Management are suspected of having behaved like Mr NAN Guo, who lacked professionalism and a sense of responsibility. The mistake made by Mr NAN Guo also illustrated that the mechanism through which he was recommended also necessitated review. Since statutory public bodies do have profound impact on our economy and the livelihood of the public, I suggest that the Government should set down specific methods, procedure and standards for the employment of management staff of statutory bodies.

Madam President, the irony is that not only had the AA Management drawn an excessively high salary, but also taxpayers in Hong Kong were required to pay exorbitant costs for the investigation into the new airport fiasco. It has already been estimated that the hearings conducted by the Commission of Inquiry on the New Airport headed by Justice WOO will incur more than $26.3 million in costs, without including the expenses incurred by the Select Committee of this Council and the Office of the Ombudsman for the purpose of making similar investigations. This has fully illustrated the fact that taxpayers have paid a very high price for the new airport fiasco, and the economic loss suffered by Hong Kong is to the tune of several billion dollars. The crux of the problem is that Hong Kong taxpayers have paid high salaries for those top executives in return for an even more painful loss. Drawing a lesson from a bitter experience, we could only solve the problems by improving the mechanism for monitoring such statutory bodies as the AA in a comprehensive manner.

Madam President, apart from enhancing the transparency of the appointment of the management staff of statutory bodies and reviewing the balance between their powers and responsibilities, the Government must also review and improve the supervision of such statutory bodies.

Madam President, we can easily find people with knowledge and experience in the management level of the ADSCOM, AA Board and AA Management. However, their views were not taken seriously or it was not possible for them to put forward their views. This illustrates that the accountability system must be directly linked with the people involved. The Select Committee Report pointed out that the four relevant bodies, namely, the ADSCOM, AA Board, AA Management and HACTL, and some members of the first three bodies should bear different degrees of responsibility towards the new airport fiasco. This shows that the relevant bodies and their members should indeed be held responsible. In order to link the accountability system with the people involved, we must, first of all, specify different duties and different systems of rewards and punishments for some of the principal and senior staff of various relevant bodies so that we can act according to what has been laid down in due course. Only through enforcing strictly the rules for reward and punishment can we ensure those who are in charge to "be on the alert" and prevent them from taking things lightly. As for the management level in particular, their rights and interests must be commensurate with their duties and responsibilities. A "dismissal" mechanism should be set up to deal with those who have failed to discharge their duties without the need to provide compensation for the termination of the relevant employment agreements. On the one hand, this can prevent the relevant duties to become "lucrative posts" for those who are greedy and incapable and, on the other, provide vacancies for the competition of those who have professional expertise and a good sense of responsibility.

Madam President, in order to strengthen the supervision that can be exercised by the Government and the public over such statutory bodies as the AA, we must introduce a certain proportion of professionals into the principal staff in charge of such monitoring bodies as the AA Board so that the Board will have adequate professional input to prevent it from being deceived and misled by management staff. Furthermore, government members on the Board should be officials of corresponding government departments as that they can act as a bridge between such public bodies as the AA and the Government. They should act as an important channel to enable the Government to understand and grasp the situation so as to prevent it from making grave mistakes in policy making. The policy makers of the Government should also take the message conveyed by their government members on the monitoring bodies very seriously. Given the fact that the ADSCOM had, in this incident, failed to spot the numerous signals indicating that the airport was still not ready and had arbitrarily decided on the opening day, it should of course assume the responsibility for making the decision. However, that the government members on the monitoring bodies had failed to give full play to their function of conveying accurate messages also warrants a review.

Madam President, the new airport opening fiasco illustrates the fact that the Government should strengthen its supervision over statutory public bodies. Just as I said earlier, the Government should first of all provide for specific methods, procedure and standards for the appointment of management staff for statutory public bodies. Secondly, it should review whether or not the rights and interests and duties and responsibilities of the senior management staff of public utilities are balanced. Thirdly, it should, according to actual needs, appoint professionals to take charge of monitoring bodies of large scale infrastructure projects as well as appointing people having certain professional knowledge as government members of monitoring bodies. Fourthly, as far as the management of statutory bodies is concerned, an appraisal and termination mechanism should be set up to mete out the proper awards and penalties, as well as immediately replacing those who have failed to discharge their duties properly or who are found guilty of dereliction of duty, without the need to pay an exorbitant cost for the termination of employment contracts. Moreover, powers related to supervision, appraisal and termination should be conferred on the Board in concrete terms so as to effectively monitor the management of statutory bodies and prevent it from turning into an "independent kingdom" which is not subject to "any form of supervision" by the Government, this Council and the public.

Lastly, the new airport fiasco is now over. Today, the new airport has become an efficient airport with world class service in terms of both quantity and quality, and it is highly regarded and acclaimed by the international community. I have to point out that this is in fact directly attributable to the hard work and responsible spirit of all the staff of the new airport. The Select Committee Report indicated that, during the construction process of the airport, some airport staff and technicians still insisted on working even though they were injured or sick. It also merits commendation that the thorough preparation for the removal of Kai Tak Airport to the new airport has enabled the airport to be moved swiftly. I would therefore like to express my sincere gratitude to all responsible airport staff, technicians and management staff who have built Hong Kong a world class international airport as well as swiftly putting right the chaotic situation that occurred on the opening day!

Madam President, I do submit.

MR JASPER TSANG (in Cantonese): Madam President, two visitors from the National Democratic Institute visited my office this morning. When I told them that we were going to debate on the inquiry report on the new airport this afternoon, they said that I could quote their views. With their consent, I now quote their comments. One of them said, "Among the hundred airports I have visited all over the world, Hong Kong's new airport is by far the best." The other visitor added that she could retrieve her checked luggage almost as soon as she alighted from the aeroplane.

Over the past few months, I have frequently heard people commending the new airport, reflecting its good impression on the airport users. However, after listening to their commendation this morning, I unwillingly turned to take a look at the Reports compiled by the Select Committee and Justice WOO. I almost could not believe that the airport so highly commended by these two friends was exactly the one referred to in these Reports.

Madam President, the nightmare at the initial commissioning of the airport is relived in the Select Committee's Report: It was supposed to be a first-class airport in terms of international standard, but the public telephones and escalators did not work; the airbridges malfunctioned, flushing water supply in toilets was not available; there was no electricity in the restaurants and rats were found running on the floor. Facilities such as the Access Control System, aircraft parking auxiliary facilities, Public Address System, Airport Express ticketing machines, as well as the most important Flight Information Display System and Cargo Handling System either did not work or were continuously out of service. Even services provided in the airport, such as cleansing and refuse collection services, Airport Express services, tarmac bus services and staff canteen services, could not live up to our expectation.

The new airport is a mammoth and sophisticated project as far as its construction and commissioning is concerned because many chains of operation are involved. Problems would inevitably arise should any one of the chains go wrong. In co-ordinating various parts of the whole project, the responsible authorities should have fully anticipated various possible accidents or errors.

However, there were not only a few or a dozen problems happened on the AOD, but scores of major and minor problems The Report of the Commission of Inquiry on the New Airport appointed by the Chief Executive sets out 43 major, moderate and minor problems. Areas that could go wrong had gone wrong, even areas that should not had. We must then ask: How could it be possible? How could the areas involved be so extensive?

The emergence of so many complicated and wide-ranging problems is obviously not due to the negligence or mistakes of individual responsible officers or departments. The Select Committee of the Legislative Council responsible for the inquiry arrived at the conclusion that various organizations involved in the opening of the new airport, including the ADSCOM, AA Board, AA Management and HACTL have failed to fully discharge their duties and should therefore shoulder different degrees of responsibility for the chaos on the opening of the new airport. All major officers of these organizations are criticized by the Select Committee by name.

Anyway, my question is: How did we come to a situation like this? Are these executives not the elite of Hong Kong and the best candidates for the job? Is the management capability of Hong Kong unable to deal with the grand opening of the new airport?

In view of the operation of the new airport over the past few months, it can hardly be said that Hong Kong is incapable of managing its airport. Objective facts seem to suggest that given sufficient time, our responsible organizations and personnel are fully capable of solving all the problems to ensure the smooth operation of the airport and provide first-class services. The Report of the Commission of Inquiry chaired by Justice WOO arrived at the conclusion that the chaos could have been avoided by a postponement of the opening day by about two months.

This conclusion is in fact skin-deep. A period of two months is disproportionate to the long lead time from preparation to opening of the airport. How could two months' time be the determinant of the failure or success of the opening? The only reasonable judgement is that this is not a question of capability. Rather, it is a question of attitude. Could chaos have been avoided if the authorities had decided to open the airport in September 1998 instead of July? I really doubt it.

We can also ask: Why did the authority not defer the AOD to a date when everything would be ready? However, we can also query whether all relevant departments and organizations had done their very best. Why did they not make sure that everything was ready prior to prescribing the AOD? Just now, a colleague said that it was like an irrevocable military order. In fact, it is not. What make us think that it is like an irrevocable military order? Even though the date was fixed, insufficient preparation is an undeniable fact.

Madam President, there is no sanctity in the date of 6 July 1998. I will look up the almanac to see whether that day is suitable for the opening of a new airport. I believe it is not necessary to choose that day. But even if we have chosen that day and the almanac says that it is not suitable for such a purpose, I still do not think there is anything wrong since the date was decided in January 1998, six months prior to the opening. Do we not pride ourselves on our high efficiency? Why could the completion date set six months ago not be met? Why were the decision-making body and the community not clearly informed of the message as soon as possible? How can we pride ourselves on being efficient? This is really baffling.

Madam President, the Report by the Select Committee and other reports have come to their own findings on this key issue. I expect a clear explanation from the Administration in its subsequent response.

MR MARTIN LEE (in Cantonese):Madam President, the chaotic situation on the opening of the new airport in Hong Kong has tarnished our reputation as an international metropolis and made us suffer heavy economic losses. For the people of Hong Kong, the new airport experience is extremely painful indeed; we have to learn a lesson and avoid trekking the same old disastrous path. I send my regards to all members of the Legislative Council Select Committee inquiring into the new airport fiasco, in particular its chairman, Mrs Selina CHOW. We should really appreciate her efforts in taking up the hard work and leading the Committee in completing its tasks. Throughout the years I have worked in this legislature, I seldom heard so many Honourable Members praising a Member in relation to an issue. Mrs CHOW has done really well and she deserves our appreciation. As usual, all Select Committee members have carried on the good tradition of the former Legislative Council, that is, putting aside their party and political differences in completing the work. The Legislative Council should be proud of this Report.

The establishment of a Legislative Council Select Committee is of great significance. Originally, the Chief Executive planned to set up a working group in which a chairman and two specialists would be appointed to carry out the relevant investigation. However, when he knew that the Legislative Council was going to establish a Select Committee to investigate the operation of the new airport, the Government changed its initial decision and appointed Justice WOO and Dr Edgar CHENG to form a Commission of Inquiry, taking charge of the relevant work.

The Government might have done this in the hope that the investigation report of Justice WOO could contend with the Select Committee's Report, but this is not the case. There are flaws in Justice WOO's report, one of them is that before Dr Edgar CHENG, a Commission member, completed the airport investigation, he was appointed as the Principal Adviser of the Central Policy Unit; this impaired the independence of the Justice WOO Commission. Worse still, the Chief Executive had appointed a judge to chair the Commission of Inquiry into the airport.

Undoubtedly, the appointment of Justice WOO can build up the public's confidence in the Government's Commission of Inquiry. The Chief Executive also wished to establish the authority and credibility of the Commission by appointing a judge. Unfortunately, his estimation was totally wrong.

The public and the press have widely criticized the report of Justice WOO's Commission for it has failed to criticize officials by name or point out the persons who should be held responsible for the airport chaos. Among the three reports, the report of Justice WOO's Commission is the least supported. The most important point is that the public has lost confidence in judicial independence and the impartiality of a judge after the publication of the report.

Not only have Justice WOO's explanations failed to clear the public's doubts, they have also reduced the credibility of the report. Justice WOO said at a press conference that the officials should be held collectively responsible for the faults. In other words, the entire department and all its staff should be responsible, instead of holding one or two officials responsible. On the basis of the collective responsibility principle, all responsible officials should resign or be condemned. But Justice WOO's Commission has misinterpreted "collectively responsible" as "shirking responsibilities collectively" to let officials go.

Justice WOO also explained that time was pressing, that was why the Commission had failed to examine the faults of individual officials. In other words, if there was ample time, he might have pointed out the faults of individual officials. In that case, Justice WOO would have sufficient reasons to ask the Chief Executive for an extension of the investigation period for the Commission to criticize responsible officials by name. Therefore, the reason given by Justice WOO that there was insufficient time is hardly acceptable.

Madam President, the way in which the Chief Executive has acted is disappointing. He refused to look squarely at the lesson and evaded the faults. He stressed that we had to look forward but not backward. Not having studied the reports of the Legislative Council and the Ombudsman, he praised that Justice WOO's report had credibility and authority. Was he implying that the reports of the Legislative Council and the Ombudsman did not have credibility and authority? We cannot help suspecting if the Special Administrative Region Government had set up the Commission of Inquiry to conceal the faults of officials. The Chief Executive stressed the importance of a responsible government when he was in Davos, Switzerland. It is ridiculous that when our Government often stresses the importance of being responsible, no official should stand forth to bear the responsibilities.

Madam President, the findings of the new airport inquiry have given rise to many problems that merit deliberation. Honourable colleagues have expressed their views but I think that there is one question. Should a judge be appointed to investigate into controversial social and political incidents again? Prof Robert STEVENS, Dean of the Pembroke College of the Oxford University in England, recently stated in an academic paper delivered in the South California University in the United States that the commissions of inquiry in England were often chaired by judges but the same was not practised in the United States. For incidents involving political faults, investigations would normally be conducted by Congress. Before 1920, the same was practised in England. Madam President, the merit of appointing a judge is that the Government can draw on his credibility and impartiality, but the result of an investigation cannot be controlled. If the Government does not accept the relevant result, it will spare no pains to condemn it. Another possibility is that, even if the Government accepts the result, the public would not accept it. In either case, it may seriously damage the impartiality of a judge and undermine public confidence in the whole judicial system. Therefore, the Government should carefully consider if it will still appoint judges as the chairmen in future in respect of politically sensitive or controversial social incidents.

Madam President, some people have asked why the Legislative Council Select Committee criticized government officials by name but not the responsible persons of HACTL. In our view, in putting to play our mentioning role over the Government, the Legislative Council must uphold a system under which senior government officials be held accountable. To commercial organizations, it is suffice for the Legislative Council Select Committee to point out the fault of the organization as a whole as they are not government bodies and their members are not responsible officials.

Madam President, lastly, I must say that I have benefitted from the airport opening day. On one occasion in September 1997, 19 disembarked Democratic Party members had dinner with Mrs CHAN in Lei Yue Mun. I told the others that the new airport would definitely not be ready in April because I had heard junior staff responsible for the actual work saying that they knew that the airport would not be ready at so early a date. Unfortunately, none of them dared reflect their views to their superiors. Only one of the 19 Democratic Party members agreed with me while the rest said that I was wrong. I made a bet of dinner with them on the opening of the airport. I bet that the airport could not open in April, May or June, if it opened in or before June, I would buy them a dinner. On the contrary, if the airport opened in or after July, they had to foot my dinner. I was sure that I would definitely win for I had already heard that the airport would only open in September for it was only ready by then. As a result, I enjoyed a big meal because of 6 July, the airport opening day. This has pointed to a question and that is: Why did those who know the facts dare not tell their superiors? In future, I hope that the Government will find out if the senior officers are so high-ranking that they lack communication with those staff under them.

With these remarks, I support the motion.

PROF NG CHING-FAI (in Cantonese):Madam President, 13 Honourable Members submitted this Select Committee Report of six volumes after having held some 90 meetings and much hard work. They definitely deserve our appreciation.

I basically support the Report of the Select Committee. The Report has outlined the causes of the initial problems of the new Hong Kong International Airport at Chek Lap Kok and affixed responsibilities. I also believe that this Report will urge the public and advisory bodies in the Special Administrative Region to attach importance to the accountability culture, such that their future operations will be more transparent and recognized by the general public.

First of all, I agree to Mr MA Fung-kwok's comment that when we consider the initial problems of the new airport, we cannot detach them from the historical background to the construction of the new airport. It is a pity that the Legislative Council Select Committee has failed to consider such historical background because of limited resources.

Discussions on the construction of a new airport began in 1989 when the Chinese and British sides were wrestling. Despite a lack of mutual trust, both sides decided to go ahead with the construction of a new airport. As a result, the organization responsible for co-ordinating new airport projects had a clumsy structure and ambiguous duties and it failed to choose the right persons for the jobs. In my opinion, this is the most important factor underlying the initial problems of the new airport.

Moreover, the three reports have coincidentally stated that a few senior executives in charge of the new airport were derelict in their duties or their capabilities were below the required standards. In short, they were incompetent and those who appointed them should be blamed for choosing the wrong persons for the jobs. Theoretically, the AA Board should bear responsibility for choosing the wrong persons for the jobs. However, we should not forget that these executives were mainly appointed by the Provisional Airport Authority (PAA) chaired by the former Financial Secretary, Mr Hamish MACLEOD, with members appointed by the former Government.

After the major engineering and personnel contracts for the new airport have been executed and implemented by the PAA, a new Board, the AA Board, can hardly repudiate these contracts unless the new Board has apparent evidence and legal grounds supporting such action. Otherwise, changing the contracts and the persons appointed would certainly lead to political disputes.

I must say that while we criticized the AA and its Chairman, Mr WONG Po-yan, we should also criticize the PAA and its Chairman then as well as the British Hong Kong Government making those appointments. Therefore, we should be fair to Mr WONG Po-yan. If we are not forgetful, we must remember that Mr WONG stood forth and apologized to the public when the opening of the airport brought chaos. He deserves our respect. Another point which I would like to make is that the public was disgusted at the airport chaos and most of them were dissatisfied with the air cargo operations on the AOD. The business sector was particularly alarmed and worried, wondering where it would all end. Unfortunately, our Report mentioned little about this and the coverage seemed disproportional. As the remarks made by Mrs Miriam LAU and Mr MA Fung-kwok about the air cargo operations were fairly detailed, I would not repeat what they said here.

I also want to express my hope that the Government and public bodies would take the overall interest of Hong Kong as the principal factor in their consideration of contracts for large scale projects and the appointment of specialists. Besides, they should not rashly trust experts from overseas. Recently, the writings of the former Director of Civil Aviation on this topic were published in newspapers. Certainly, it is worthwhile for the Government to learn from the experience of many foreign companies. This is particularly true for Hong Kong is an international city, therefore, it should make full use of this advantage. But this does not mean that we have to rely on foreign companies and experts. We should not forget that we should equip ourselves and make full use of local professionals. If necessary, we should nurture local professionals so that we can effectively evaluate and monitor the proposals made by consultancy firms and their implementation.

I hope that the Policy Secretaries present will draw a lesson from the bitter experience. Today, Hong Kong is no longer a colony but a region run by Hong Kong people. Therefore, the Government should no longer use the Procurement Agreement of the World Trade Organization as an excuse. When it approves contracts and appoints persons of ability, it should consider local companies and talents. I agree to the recommendation made in the Ombudsman's report that talents in Hong Kong and the Mainland should be considered to attain economic results and effective operation and to suit the actual situation of Hong Kong.

Lastly, I do not want to take up too much time but I do want to mention an episode, as a footnote to our debate today. I have tried to verify the information on the AA. A staff member at my office called up the AA in my name asking when the four senior officers such as Dr TOWNSEND were appointed by the PAA and when their contracts were renewed. The staff's call was passed from a receptionist to other persons, and only the fifth person who answered the call, an unnamed public relations officer from the Public Relations Department, was willing to note down the question. At last, they gave us an answer that they had sought legal advice and declined to answer a question asking for personal data. Members should ponder over this: How transparent is such a large public body if it even cannot let the public know the date when its senior executives assumed office? How can the public have confidence in the AA? I have related this episode in the hope that the AA will stand forth and answer this small question of mine.

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

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

(No Member indicated a wish to speak)

CHIEF SECRETARY FOR ADMINISTRATION (in Cantonese): Madam President, I have listened very carefully to the speeches of Honourable Members today and the many points of view expressed so far underline the fact that the problems surrounding the opening of our new airport last July have triggered a public and political debate of some intensity.

That is perfectly understandable, given the depth of disappointment, frustration and embarrassment we all felt at the time. That reaction was also a measure of the high standards we have always set for ourselves, and must continue to set for ourselves. It is what has made us strong and successful as a community.

There are other ways in which we judge ourselves, and one of them is our ability to face the facts. To recognize our mistakes, to learn ─ indeed profit ─ from them, and then move on. I hope, and believe, that at the end of six long months of enquiry and questions, public examination and investigation, of sound bites and soul searching, we can confirm that those intrinsic qualities remain intact, and that we are wiser for the experience. I can assure you that it has been a sobering experience for the Administration.

Madam President, the subject at hand today is the Legislative Council Select Committee Report on the New Airport. Taken together with the Reports of the Commission of Inquiry and the Ombudsman, the main issues raised by them have been thoroughly ventilated in public, through the press and now in this debate in our legislature. Members have touched on many aspects of the Select Committee Report. I think the first point to note here is that we are all involved in an honest effort to find the truth, and learn from it. This is an exercise in transparency and accountability to which the Administration has been committed from the outset. We took the initiative to establish the independent judicial inquiry conducted by Justice WOO and Dr Edgar CHENG. We co-operated fully in providing witnesses and evidence to the Commission and the Select Committee. We made available all the documentation and information required of us by them, and by the Ombudsman. We held nothing back.

And at the end of the day, with the publication of all three reports, we accepted their recommendations and have moved quickly and in a determined way to implement them, where we had not already taken the initiative ourselves. As an Administration, we shouldered our share of the blame and accepted our responsibility. Both the Chief Executive and I apologized for the inconvenience caused to so many people, and indeed for the economic losses which resulted from the chaos.

This was an unreserved apology which I have no hesitation in repeating today.

The silver lining to the very dark cloud which hung over Chek Lap Kok in the immediate aftermath of opening day is the fact that we so quickly overcame the problems in the passenger terminal and, subsequently, the cargo handling side. We can now point to an airport that has already won recognition as one of the finest in the world. In agonizing over what went wrong, why, and who was to blame, it is sometimes easy to forget this.

Our new airport is already running at high efficiency and has surpassed the standards at Kai Tak. The airport now handles on a daily basis an average of 460 flights, 80 000 passengers, 4 000 to 5 000 tonnes of air cargo. 90% of the passengers can complete their immigration check-in within 15 minutes, collect their luggage within 10 minutes upon their arrival and reach downtown central business district within an hour upon the touchdown of their planes. Such standards are comparable with the best standards at other international airports. The Second Customer Survey carried out by Lingnan College for the AA in late December revealed that 92.6% of respondents described themselves as "satisfied" with the services at the airport, compared with a similar figure of 88.2% in August.

Madam President, on the question of responsibility, a number of issues are clear. The Select Committee has concluded that the AA Management bears the greatest and most direct responsibility for the fiasco on Airport Opening Day (AOD). As for the suspension and curtailment of air cargo handling during the first few weeks of airport operations, the Select Committee is of the view that it is largely the responsibility of HACTL. These conclusions are consistent with the findings of the other two inquiries.

The Select Committee also examined the question of the responsibility of the Government and certain public officers for the problems on AOD. The ADSCOM was responsible for overseeing the 10 mega projects under the Airport Core Programme, which included the airport. So I accept that the ADSCOM, which I chair, has "not fully discharged its duty in ascertaining the readiness of the airport on opening."

However, we should bear in mind that the AA was set up at great expense and for good reasons. We sought the consent of this Council to enact legislation to confer upon it statutory powers and responsibilities to construct and operate the new airport. As intended, the AA is run according to prudent commercial principles free from bureaucratic interference. It has its own board and its own management and a clear mandate set out in law. There is no question of the ADSCOM operating as a "super AA Board" or for the ADSCOM to act above the law to direct the AA. Put simply, the Government could not and should not intervene in the affairs of the AA or duplicate its efforts.

The duties of the ADSCOM in overseeing the airport project were exercised with the assistance of the NAPCO as a critical observer. Whilst we could debate the extent to which the NAPCO should have been more probing and proactive in verifying information provided by the AA, we ultimately had to rely on the AA for the most up-to-date assessment of airport operational readiness because the AA was closest to the operations on the ground.

I make these points not to duck the Administration's responsibilities. I have acknowledged that we and the NAPCO could have done more to avoid the painful experience on AOD, particularly in overall risk assessment and contingency planning. This is simply to put the relationship between the ADSCOM and the AA in its proper context.

Madam President, all of the dedication, diligence, hard work and effort that has gone into the three Reports ─ not to mention our collective anguish ─ will have gone for nothing if we do not absorb and act on the lessons which we have learned from our mistakes.

The Select Committee, for example, has made 15 specific recommendations. The Commission and the Ombudsman have also made useful observations. We are examining them all vigorously so that we can incorporate them into a new set of guidelines now being drawn up for major projects. These guidelines will focus on the demarcation of responsibility and authority, co-ordination and monitoring mechanisms, transparency, channels of communication, checks and balances, the use of external experts, accountability, risk assessment and contingency planning.

A first draft of the guidelines has already been drawn up and is currently being scrutinized by the relevant bureaux and department. We are working towards finalizing these guidelines within the next few weeks.

Members will know that the AA has already set up a special working group to consider the findings and the recommendations of the inquiries, with particular attention to the lessons to be learnt and areas for improvement. One special area which the AA will look at is the ways and means of strengthening its working relationship with its franchisees such as HACTL with a view to improving the monitoring of their performance.

Additionally, the AA has introduced a number of measures to improve their contingency plans and procedures since airport opening. They have also set up a task force to carry out an overall risk assessment and review of contingency planning.

On management issues, the AA will commission a further review of its management structure. It will also engage external legal expertise to advise on any action that may be taken on individuals named in the reports and matters relating to gratuities. I understand that the AA Board will attach top priority to implementing these measures and both the government and non-government members will work closely together towards this end.

I can assure Honourable Members that these promises of improvement are not empty words. Let me give an example. The Government, AA, HACTL and the airport community have been working very closely to improve co-ordination and communication so as to enhance our crisis management capabilities ever since we overcame the initial problems. This is why, when Super Terminal One's power distribution system broke down on 15 October last year, all the airport players were able to deal with the problem swiftly and effectively without causing any serious disruption to air cargo services. Without this co-ordination and close-knit teamwork, the problem could have escalated into another major crisis. I think this demonstrates that we have learnt our lessons quickly and well.

Madam President, I would like at this point to touch briefly on the question of the personal responsibility of civil servants involved in this issue. The Civil Service has a well-established system, clearly defined procedures and standard of proof to deal with misconduct, negligence or dereliction of duty. The Administration will take into account the findings of the three reports, consider the basis on which criticisms against individual officials were made, and take appropriate action. My colleagues and I are fully prepared to subject ourselves to this test.

Before I conclude I would like to comment on a point of procedure. The Select Committee's findings raise the question whether as a matter of natural justice in any public inquiry where serious allegations are to be made against individuals, that the individuals concerned should be given an opportunity to respond to those allegations before they become public, and that their responses should be taken into account in the final report. This is what the Ombudsman and the Commission of Inquiry have done. The issue merits discussion between the Administration and the Council in due course so that the ground rules governing future such inquiries are clear and acceptable to all concerned.

Madam President, this has been a wide-ranging debate. There have been many views expressed, different positions taken. After countless manhours of investigations, three very comprehensive Reports, acres of newsprint and hours of air time devoted to the very minutiae of this subject, nobody can say that we have not exposed ourselves to the most critical self-examination. All three Reports deserve to be read on their entirety.

Our new airport is the culmination of many years of hard work on the part of many ─ yes including those who have been personally criticized. Now that the issue has been so exhaustively aired, I hope we can move on and concentrate our collective efforts on promoting our magnificent airport and making the most of the opportunities presented by it.

PRESIDENT (in Cantonese): Mr Selina CHOW, you may now reply.

MRS SELINA CHOW (in Cantonese): Madam President, I would like to speak in response to the point of procedure especially made by the Chief Secretary for Administration.

When I spoke, I said that the Select Committee had carefully studied this issue and sought legal advice. We had adhered to the usual practice of other Select Committees established under the Legislative Council (Powers and Privileges) Ordinance, that is, during a hearing, Committee members will ask a witness questions to find out as far as possible all the facts that can be substantiated by evidence and members need to know. Members will then draw a conclusion and publish a report on the basis of all evidence so collected. A select committee is appointed by the Legislative Council to conduct an open hearing and investigation to find the truth.

We have fulfilled our tasks without fear and favour, as stated in paragraph 2.6 of the Report, "When deciding upon the procedures to be adopted, the Select Committee was mindful of the need to be fair and to be seen to be fair to all parties whose interests or reputation may be affected by the proceedings". This principle of fairness often embodies justice. I would like to say that Lord DENNING, a famous British judge who is highly respected, has said that "the justice or fairness rule is not absolute, it differs under different circumstances". This merits our reference. I deeply believe that the procedures of the Select Committees of this Council, in essence or in form, fully comply with the principle of fairness and adequately balance the public interests and the interests of bodies or persons criticized by the Committees upheld by objective, effective and open investigations. A point for reference is that many legislatures will not consult criticized persons before publishing select committees' reports. In respect of such procedures, the government will make public its response to the report before a debate is made in the legislature while the legislature's debate on the report will normally be held soon after the government has made public its response. Perhaps we may make reference to this.

During our deliberations on the Report, the Legal Adviser reminded members from time to time that if we reached a certain conclusion, we had to support it with evidence, especially the evidence given by a witness concerned in response to our allegation. Certainly, the Committee will make a collective judgment and draw a conclusion on the basis of the available evidence after a thorough debate. If we fail to reach a consensus, we will take a usual step, that is, obtain the views of a majority of members through voting in order to determine the position of the Committee.

Madam President, I have taken the trouble to raise the above points because I consider this an important issue that must be explained to pre-empt suspicions about the usual procedures of Select Committees to the detriment of its fairness. The Chief Secretary for Administration just asked if a Select Committee should give a person involved a chance to reply before publicly accusing him and publishing a report. She also said that the report should reflect that these replies have been considered. We should wait until the Government raises this point for further discussion in this Council.

In addition, I would like to reply to the views expressed by one or two Members on this Report. Mr Bernard CHAN asked if it was worth spending so much public money on an investigation into the fiasco on airport opening. He said that if the same amount of money was spent on other areas, it might be more helpful to the development of Hong Kong. This certainly involves a difference in viewpoints. I do not know what criteria Mr CHAN has adopted in making the comparison. I only want to ask him, "What is the price of truth? We want accountability." I find it unacceptable for Mr CHAN to use the word "witch-hunts" in his speech to describe the stringent, objective and fair investigation of the Select Committee for I do not think it is appropriate. As he supports the motion to endorse the Report of the Select Committee, does it imply that what he said before smacks of unjustly imputing motives to the Select Committee?

Mr HUI Cheung-ching and Prof NG Ching-fai are not satisfied with the responsibilities to be borne by HACTL on AOD as stated in the Select Committee Report. I fully understand their concern and admit without reservation that our capability, time and the participation of experts in this respect were indeed limited, so much so that we had not been able to make a judgment as to whether the HACTL experts or the experts of Justice WOO's Commission of Inquiry were right. In our views, what we have done is right and the conclusion we have drawn is important. As stated in paragraph 7.155 of the Report, HACTL had not met its promise and had failed to provide services on AOD, therefore, it should be held fully responsible.

Madam President, undeniably, the new airport is generally accepted as a first-class airport in the world today and Hong Kong people can be proud of our new airport. However, we cannot and should not easily forget the bitter lesson on AOD. The problems then may have been solved one by one today but while we are pleased, we have to look squarely at other problems with the airport now such as the extremely poor turnover of retailers and the dissatisfaction of airlines with various airport charges.

Mr Jasper TSANG said that foreign visitors had sung praises for our airport, and this made me think of a friend who is a frequent traveller. He once told me that the airport in Hong Kong was big and beautiful but it was far worse than the Kuala Lumpur Airport where there was chaos earlier on. Although the Kuala Lumpur Airport was not as magnificently constructed, it was better than ours for it could give travellers a strong human touch and it was worthwhile for us to draw on its experience, he said. Two days ago, another executive who travels frequently told met that he had written to Mrs Regina IP, the Secretary for Security, asking the staff of the Immigration Department to smile more. The significance of these episodes is that they lead us to ponder over whether Hong Kong, a highly efficient city as universally recognized, can give people a human touch. It is indeed the key to securing a continuous flow of travellers into Hong Kong.

The new airport has evolved from a large construction site into a world-renowned facility and it has met one challenge after another. The Government must clearly identify the current needs of the airport, to ensure that there are suitable people of talent on its Board and management to run the airport well. Furthermore, the Legislative Council should continue to monitor the development of the airport and reflect the views of the public so that the airport can really answer the expectation of Hong Kong people.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mrs Selina CHOW be passed. 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)

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 motion passed.

NEXT MEETING

PRESIDENT (in Cantonese): I now adjourn the Council until 2.30 pm on Wednesday, 10 February 1999.

Adjourned accordingly at eleven minutes to Ten o'clock.

Appendix A

13 February 1999

Dear Sir,

I refer to the question asked by the Honourable HO Sai-chu at the sitting on 3 February regarding the promotion of football in Hong Kong.

Owing to some misunderstanding with the Sports Development Board (SDB), the figures representing the amount of support provided by the Board to the various sports given in my reply need to be adjusted. The second paragraph of part (a) of the English version of my reply should be amended to read as follows:

"Between the financial year 1996-97 and 1998-99 the support provided by the SDB for the sport of football amounted to $12.96 million, including grants of $5.05 million to the HKFA. In the same period the amounts of support which the Board provided to the other major sports are as follows:

badminton	$26.31 million
swimming	$24.43 million
squash	$24.13 million
windsurfing	$21.80 million
table tennis	$21.70 million
cycling	$11.92 million
tennis	$10.42 million
basketball	$6.68 million
rugby	$2.87 million
hockey	$2.43 million
volleyball	$1.89 million"

I shall be grateful if you would bring these amendments to Members' attention and arrange to include this letter as an appendix to the Hansard for record. I would like to offer my sincere apologies to Members for the inaccuracy and any inconvenience so caused.

Yours faithfully,





(KWAN Wing-wah)
Acting Secretary for Home Affairs

Annexes I, II and III

WRITTEN ANSWERS

Written answers by the Secretary for Constitutional Affairs to Mr Martin LEE, Mr Eric LI and Mr Andrew WONG's supplementary question to Question 2

No example other than Taiwan can be found in the Internet or other publications which are readily available. Nevertheless, given the large number of countries and tremendous changes in local governments in the 20th century, we are unable to conduct an exhaustive research on this subject.

We have obtained some information regarding the Community Boards in New York City where members are appointed by Borough President in the respective borough. According to the New York City Charter (relevant extract at Annex A), the pre-requisite for a person to serve on a Community Board is that he has to be a New York resident who lives in, works in, or has a professional or other significant interest in the Board's district. In appointing members to the Community Boards, the Borough President must assure adequate representation from the different geographic sections and neighbourhoods within the community district and consider whether the aggregate of appointments fairly represents all segments of the community. For the Provincial Advisory Council of Taiwan, we are unable to gather similar information from available sources.

Information about local councils in Australia, Japan, British Columbia, Taiwan, France, New York City, United Kingdom, Singapore, Belgium, the Netherlands and Germany is attached at Annex B for Members' reference.

Annex A

New York City Charter

CHAPTER 70

CITY GOVERNMENT IN THE COMMUNITY

Section

2880. Community boards.

2801. Actions of community boards.

Sec. 2800. Community boards.

a. For each community district created pursuant to chapter sixty-nine there shall be a community board which shall consists of (1) not more than fifty persons appointed by the borough president for staggered terms of two years, at least one-half of whom shall be appointed from nominees of the council members elected from council districts which include any part of the community district, and (2) all such council members as non-voting members. The number of members appointed on the nomination of each such council member shall be proportional to the share of the district population represented by such council member. The city planning commission, after each council redistricting pursuant to Chapter two A, and after each community redistricting pursuant to section twenty-seven hundred two, shall determine the proportion of the community district's population represented by each council member. Copies of such determinations shall be filed with the appropriate borough president, community board, and council member. One-half of the members appointed to any community board shall serve for a term of two years beginning on the first day of April in each odd-numbered year in which they take office and one half of the members appointed to any community board shall serve for a term of two years beginning on the first day of April in each even-numbered year in which they take office. Members shall serve until their successors are appointed but no member may serve for more than sixty days after the expiration of his or her original term unless reappointed by the borough president. Not more than twenty-five percent of the appointed members shall be city employees. No person shall be appointed to or remain as a member of the board who does not have a residence, business, professional or other significant interest in the district. The borough president shall assure adequate representation from the different geographic sections and neighborhoods within the community district. In making such appointments, the borough president shall consider whether the aggregate of appointments fairly represents all segments of the community. Community boards, civic groups and other community groups and neighborhood associations may submit nominations to the borough president and to council members.

b. An appointed member may be removed from a community board for cause, which may include substantial nonattendance at board or committee meetings over a period of six months, by the borough president or by a majority vote of the community board. Vacancies among the appointed members shall be filled promptly upon the occurrence of the vacancy by the borough president for the remainder of the unexpired term in the same manner as regular appointments.

c. Members of community boards shall serve as such without compensation but shall be reimbursed for actual and necessary out-of-pocket expenses in connection with attendance at regularly scheduled meetings of the community board.

d. Each community board shall:

(1) Consider the needs of the district which it serves

(2) Cooperate with, consult, assist and advise any public officer, agency, local administrators of agencies, legislative body, or the borough president with respect to any matter relating to the welfare of the district and its residents.

Annex B

Composition of Local Councils in Other Parts of the World

A. New South Wales, Australia

Information extracted from the New South Wales Local Government Act 1993

B. Japan

Information provided by the Japanese Consulate General

C. British Columbia, Canada

Information extracted from the 'Local Government in British Columbia - A Community Effort 1997'

D. Taiwan

Information collected from the Internet

E. France

Information supplied by a French government official

F. New York City, USA

Information extracted from the 'Official Directory of the City of New York'

G. UK

Information provided by the British Consulate General

H. Singapore

Information provided by the Consulate General of Singapore

I. Belgium

Information provided by the Hong Kong Economic and Trade Office, Brussels

J. The Netherlands and Germany

Information provided by the Hong Kong Economic and Trade Office, Brussels

(A)

Part 2 Councils

Division 1 Constitution

219 Constitution of councils

A council is constituted by this Act for each area.

220 Bodies corporate

A council is a body corporate.

Note.

Part 8 of the Interpretation Act 1987 applies to statutory bodies. It contains provisions stating the general attributes of statutory incorporation (for example, perpetual succession, the requirement for a seal, the taking of proceedings, etc), it provides for judicial notice to be taken of a statutory corporation's seal, it creates a presumption of regularity for acts and proceedings of a statutory corporation and contains other provisions.

221 What is a council's corporate name?

(1) The corporate name of a council of an area other than a city is the "Council of X" or the "X Council", X being the name of the council's area.

(2) The corporate name of a council of a city is the "Council of the City of X" or the "X City Council", X being the name of the city.

222 Who comprise the governing body?

The elected representatives, called "councillors", comprise the governing body of the council.

223 What is the role of the governing body?

The role of the governing body is to direct and control the affairs of the council in accordance with this Act.

224 How many councillors does a council have?

(1) A council must have at least 5 and not more than 15 councillors (one of whom is the major).

(2) Not less than 12 months before the next ordinary election, the council must determine the number, in accordance with subsection (1), of its councillors for the following term of office.

(3) If the council proposes to change the number of councillors, it must, before determining the number, obtain approval for the change at a constitutional referendum.

Division 2 The major

225 The mayor

An area must have a mayor who is elected in accordance with this Division.

226 What is the role of the mayor?

The role of the mayor is:

• to exercise, in cases of necessity, the policy-making functions of the governing body of the council between meetings of the council

• to exercise such other functions of the council as the council determines

• to preside at meetings of the council

• to carry out the civic and ceremonial functions of the mayoral office.

227 Who elects the mayor?

The mayor of an area is the person elected to the office of mayor by:

(a) the councillors from among their number, unless there is a decision in force under this Division which provides for the election of the mayor by the electors, or

(b) the electors, if such a decision is in force.

Note. As to the election of the mayor, see also section 282.

228 How is it decided that the mayor be elected by the electors?

(1) It may be decided at a constitutional referendum that the mayor be elected by the electors.

(2) A decision that the mayor be elected by the electors takes effect in relation to the next ordinary election or the next casual vacancy in the office of mayor, whichever happens first, after the decision is made.

229 Can the decision be changed?

(1) A decision that the mayor be elected by the electors is rescinded only if a constitutional referendum decides in favour of discontinuing that means of election.

(2) The rescission takes effect in relation to the next ordinary election or the next casual vacancy in the office of mayor, whichever happens first, after the rescission occurs.

230 For what period is the mayor elected?

(1) A mayor elected by the councillors holds the office of mayor for 1 year, subject to this Act.

(2) A mayor elected by the electors holds the office of mayor for 4 years, subject to this Act.

(3) The office of mayor:

(a) Commences on the day the person elected to the office is declared to be so elected, and

(b) becomes vacant when the person's successor is declared to be elected to the office, or on the occurrence of a casual vacancy in the office.

(4) A person elected to fill a casual vacancy in the office of mayor holds the office for the balance of the predecessor's term.

231 Deputy mayor

(1) The councillors may elect a person from among their number to be the deputy major.

(2) The person may be elected for the mayoral term or a shorter term.

(3) The deputy mayor may exercise any function of the mayor at the request of the mayor or if the mayor is prevented by illness, absence or otherwise from exercising the function or if there is a casual vacancy in the office of mayor.

(4) The councillors may elect a person from among their number to act as deputy mayor if the deputy mayor is prevented by illness, absence or otherwise from exercising a function under this section, or if no deputy mayor has been elected.

Division 3 The councillors

232 What is the role of a councillor?

(1) The role of a councillor is, as a member of the governing body of the council:

• to direct and control the affairs of the council in accordance with this Act

• to participate in the optimum allocation of the council's resources for the benefit of the area

• to play a key role in the creation and review of the council's policies and objectives and criteria relating to the exercise of the council's regulatory functions

• to review the performance of the council and its delivery of services, and the management plans and revenue policies of the council.

(2) The role of a councillor is, as an elected person:

• to represent the interests of the residents and ratepayers

• to provide leadership and guidance to the community

• to facilitate communication between the community and the council.

233 For what period is a councillor elected?

(1) A councillor (other than the mayor) holds office for 4 years, subject to this Act.

(2) The office of councillor:

(a) commences on the day the person elected to the office is declared to be so elected, and

(b) becomes vacant on the day appointed for the next ordinary election of councillors, or on the occurrence of a casual vacancy in the office.

(3) A person elected to fill a casual vacancy in the office of councillor holds the office for the balance of the predecessor's term.

234 When does a vacancy occur in a civic office?

A civic office becomes vacant if the holder:

(a) dies, or

(b) resigns the office by writing addressed to the general manager, or

(c) is disqualified from holding civic office, or

(d) is absent without prior leave of the council from 3 consecutive ordinary meetings of the council, or

(e) becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his or her creditors or makes an assignment of his or her remuneration for their benefit, or

(f) becomes a mentally incapacitated person, or

(g) is dismissed from civic office, or

(h) ceases to hold the office for any other reason.

Note. See section 275 for the circumstances in which a person is disqualified from holding civic office.

(B)

LOCAL SELF-GOVERNMENT

Growing citizen's awareness and the push for local authority

Central and Local Governments' Relationship

Japan's system of local self-government is founded on 2 main principles. Firstly, it provides for the right to establish autonomous local public entities based on a given geographical area that are, to a certain extent, independent of the national government. Secondly, it embraces the idea of "citizens' self-government," by which residents of these local areas participate in and handle, to varying degrees, activities of the local public entities. Japan's system of local self-government originates from the pre-World War II period, primarily from the concept of autonomous local entities. After the war, the concept of citizens' self-government was incorporated to a greater extent.

Japan's fundamental principles of local self-government are set forth in the Local Autonomy Law (Chiho Jichi Ho), which gives specific legal validity to the principle of local autonomy as insured by Chapter 8 of the Constitution of Japan. This Local Autonomy Law specifies the types and organizational framework of local public entities, as well as guidelines for their administration. It also specifies the basic relationships between these local entities and the central government. As of July 1996, Japan's local governments numbered as follows: 573 villages (mura), 1,993 towns (machi or cho), 23 special wards (tokubetsuku), 666 cities (shi) and 47 prefectures (43 of which are called ken, fu in the case of Osaka and Kyoto, to in the case of Tokyo, and do in the case of Hokkaido).

The organ of the central government that is in charge of local government-related administrative activities is the Ministry of Home Affairs. It is responsible for communication and exchange of views between the local and central government; it also establishes local self-government programs and tax systems.

After World War II in accordance with the provisions of the Constitution and the Local Autonomy Law, Japan's local governments gained broad recognition of their autonomy and self-standing, both at the formal, structural, and at the operational level in terms of their actual dealings with the central government. Although they are considered autonomous entities, as the source of their funding and orientation comes from the central government, it is the central government who exercises control in various ways.

Further reflecting this situation, in May, 1995, the Decentralization Promotion Law (Chiho Bunken Suishin Ho) was passed by the Diet. A specialized commission, set up in accordance with this law, has on 4 occasions (through October 1997) put forth specific proposals for the decentralization of authority from the national to the local level for a wide range of governmental functions.

Local Governments

As stated in the Local Autonomy Law, prefectures are administratively headed by governors (chiji), while cities, towns and villages are headed by mayors (cho). These officials represent the local governments in their external dealings and serve in an executive position vis-… -vis the elected local assemblies, the forums for discussion of local issues. Governors and mayors are elected for 4-year terms by direct popular vote and are responsible to the local citizenry.

The local assemblies (including those of the 23 special wards of Tokyo) are composed of members elected by the local voters. Among the functions of these assemblies are establishing or abolishing local ordinances, determining local government budgets, and approving settlements of accounts. They also check work undertaken by local bodies on their own initiative or when delegated to do so by organs of the central government. Likewise, they request audits by the local governments' audit commissions and have a say in the selection of important local officials (vice governors, deputy mayors, etc.). Their work is carried out largely by standing committees (jonin iinkai).

As organs for discussion and decision-making, the local assemblies are, together with the executive organs that center around the governors' and mayors' offices, the most important constituents of local government. However, it has been pointed out that the autonomous initiatives and activities of these assemblies tend to be inadequate, as the majority of proposals they consider are in fact initially drafted and presented by governors' or mayors' offices.

The  heads of local governments are directly elected by the citizenry. This stands in contrast to the indirect way in which the prime minister is chosen, namely, through votes cast by members of the Diet. The local assemblies, which are deliberative and decision-making organs, and the local government heads, who are, so to speak, the executive organs, are both chosen according to the citizens' wishes and have a sort of parallel standing. The establishment of this democratic pattern is meant to contribute to the realization of appropriate self-government through the mutual checks that the assemblies and heads of local governments exercise on one another.

Those who are employed by local public entities at the prefectural level or lower levels of government are called local public servants. This term usually refers to persons in ordinary public service posts, excluding such special posts as governor, vice governor, mayor, deputy mayor, chief accounts officers, and so on. Matters having to do with the recruitment, remuneration, and working conditions of local public servants are decided in accordance with regulations that are similar to those affecting national public servants and that are set out in the Local Public Servants Law. As of April 1, 1996, the total number of local public servants, including teaching and police personnel, and persons employed by special-account public enterprises, was over 3.27 million. Types of local administrative reforms that are being advocated and discussed include, in addition to more appropriate salaries and retirement benefits, controls over (and reductions in) the number of local public servants. In recent years there has been a tendency for this number to increase as a result of growing diversification in residents' needs and growing demands on local governments due to the ageing of Japanese society.

The Large-City System

In response to the special characteristics of the administration of very large cities, the Local Autonomy Law designates for such cities a number of special regulations that differ from those affecting ordinary cities, towns, and villages.

First of all, there is the unique system currently in affect in Metropolitan Tokyo. The 23 wards that make up the most densely populated part of Tokyo Metropolis are designated as special wards (tokubetsuku), each of which has a status similar to that of cities, within certain limitations. They can elect ward mayors, for instance. Some of the responsibilities and services normally reserved for cities are, in fact, in the hands of the Tokyo Metropolitan Government. Many are calling for further changes to make the ward administrations more closely approximate ordinary cities.

Secondly, in keeping with the Local Autonomy Law, a cabinet order was issued for large cities with more than 500,000 people that made special provisions for their administration and finances. This is now being applied to 12 cities, other than Tokyo, most of which have populations of more than 1 million. These are Osaka, Kyoto, Nagoya, Yokohama, Kobe, Kita Kyushu, Sapporo; Kawasaki, Fukuoka, Hiroshima, Sendai, and Chiba. In these government-designated cities; authority over 18 categories of public activities ─ including welfare, hygiene, and urban planning ─ that are ordinarily within the prefectures' and governors' spheres of competence is transferred to these cities' decision-making and administrative mechanisms. Additional legal authorizations transfer still other elements of prefectural control and authority to these cities, with the result that they are treated, for all practical purposes, on a par with the prefectures. Each of these cities is divided into several wards to facilitate the work of city administration, and each geographical subdivision has a ward office that employs a ward head and other public servants.

Local Public Finance

Each year, the Cabinet must put together a document giving the total estimated amount of revenue and expenditures of the local governments for the next fiscal year. This document must be made public and submitted to the Diet. Ordinarily called the local finance plan, it becomes the main guideline for the various local governments' financial operations. The scale of these local finances is enormous, as approximately 60% of the country's total public expenditures is channeled through local governments. In fiscal 1997, these local expenditures amounted to approximately 88 trillion yen (US$730 billion).

Local taxes (chihozei), which constitute an autonomous sort of revenue for local governments, are collected by these local administrations within the limits of their authority to levy taxes. There are both prefectural taxes and taxes levied by cities, towns, and villages. Both types of taxes are subcategorized into special-purpose taxes, to be used for certain designated ends, and ordinary taxes, whose use is not specifically designated.

Local taxes covered only about 33.2% of local governments' total expenditures in 1995. Thus the financial gap was supplemented by local government bonds (chihosai) 16.8%, and budgetary transfer from the central government to the local governments: local allocation taxes (chiho kofuzei) 15.9%, and national treasury disbursements (kokko shishutsukin) 14.9%. From the financial point of view, local governments rely on the central government. Pointing out this circumstance, some criticize that a local government has only one third of its autonomy.

Local allocation taxes are used by the central government as a means of adjusting local financial administration with a view to ensuring a certain level of administrative equality throughout the country. The monies are allocated as general revenues that local governments can use as they see fit. These funds account for a large portion of several types of taxes levied at the national level, namely, 25% of tobacco taxes, 24% of general consumption taxes, and 32% of the combined revenue derived from liquor taxes, plus corporation and income taxes. On the other hand, national treasury disbursements are made to local public entities by the government to defray the cost of specific programs.

As a means of increasing local governments' financial resources for the purpose of promoting the local share on authority and improvement of local welfare undertakings, a system of local consumption taxes was instituted in 1997. The issuance of local government bonds is subject to various limitations imposed by the central government, including the need for formal permission granted by the Minister of Home Affairs. The commission on reforms, established under the Decentralization Promotion Law, is pressing for the abolishment of this permission system.

Growing Citizens' Awareness

Japan's local self-government, has provisions for direct democracy not seen at the national level. For example, after collecting signatures from 2% of registered voters in a given local area, residents may request that heads of government establish, change, or abolish a certain ordinance. Or, with the same percentage of signatures, local residents may demand that a local audit commission perform an audit of work carried out by a head or a local public entity. By collecting the signatures of one third or more of registered voters, petitions can be made to local election administration commissions to dissolve local assemblies or to dismiss a head or key local officials. In addition to these types of direct petition, local residents are guaranteed by the Constitution (Article 95) the right to vote directly on special laws applicable only to one local public entity.

As a result of changes in residents' awareness and in the political environment, there are a growing number of local governments that are establishing voting ordinances allowing residents to vote yes or no on important local issues. This trend is not based on the Local Autonomy Law but on the constitutional right to establish local ordinances. At present, local ordinances have been established in this way with respect to such issues as the building of nuclear power stations, plans to fill in seaside marsh areas, the continued existence of U.S. military bases, and the building of waste disposal facilities.

Reflecting the need to respond to various residents' complaints about local governments, beginning in 1990 (in the city of Kawasaki, Kanagawa Prefecture), systems have been established for employing a local ombudsman charged with investigating aspects of local administration. The ombudsman has the necessary powers of investigation to resolve complaints, and in cases where it is judged that the reasons for complaints are grounded in systemic defects or administrative shortcomings, the ombudsman will make his or her views public and advise the local administrative head to correct the investigated problems.

Chapter VIII of the Constitution of Japan

CHAPTER VIII: LOCAL SELF-GOVERNMENT

Article 92:

Regulations concerning organization and operations of local public entities shall be fixed by law in accordance with the principle of local autonomy.

Article 93:

The local public entities shall establish assemblies as their deliberative organs, in accordance with law. 2) The chief executive officers of all local public entities, the members of their assemblies, and such other local officials as may be determined by law shall be elected by direct popular vote within their several communities.

Article 94:

Local public entities shall have the right to manage their property, affairs and administration and to enact their own regulations within law.

Article 95:

A special law, applicable only to one local public entity, cannot be enacted by the Diet without the consent of the majority of the voters of the local public entity concerned, obtained in accordance with law.

( ): as % of Total

(a) Initial Budget

* MOF

(C)

Voting in Municipal Elections
		The terms we use:
You are entitled to be registered as an elector and vote in local election if you are: . a minimum of 18 years of age; . a Canadian citizen; . have resided in British Columbia for 6 consecutive months prior to seeking registration as an elector; . own or rent property in the municipality on the date of registration or have resided in the municipality for 30 days prior to registration; . have no disqualification under the Municipal Act or any law in force in British Columbia.		ELECTION ─people in the community vote on who they want on their council or regional board. REFERENDUM ─ people vote on issues like whether or not they want a swimming pool or fire protection or a new arena. ELECTOR ─a person who is qualified to vote at an election or referendum. INDICTMENT ─ a written statement accusing a person of a crime. TENANTS ─ rents or lives in/on.
A person who owns land in a municipality, but does not reside in that municipality, must register at least 14 days before general voting day as a property elector, as long as they meet the other requirements of resident electors. Resident electors not on the electors' list can vote by registering on election day.
		Election to Regional Boards
		Regional districts are governed by a board consisting of two types of directors. Electoral Area Directors are elected directly by rural area voters and serve three year terms. Municipal Directors are first elected to a municipal council and are then appointed by their council to the regional district board for a one year term.

(D)

Provincial Government

A provincial government is the highest administrative organ of local self-governance prescribed by the Constitution of the Republic of China. Altogether, the ROC Constitution designates 35 provinces (see map on the inside of the front cover), but there is only one complete province under the effective control of the ROC. Thus, the Taiwan Provincial Government is the ROC's only fully active provincial government. The Fukien Provincial Government, headquartered in Kinmen County, enjoys fewer powers than its Taiwan counterpart as some of its powers have been relegated to the Kinmen and Lienchiang county governments.

The Future Role of the Provincial Government

Projects Drawn in the National Development Conference

At the end of 1996, the National Development Conference was convened to achieve consensus within society and draw up a blueprint for development into the next century. In this conference, projects to streamline the provincial government were laid down as the following:

• The functions, operations, and organization of the provincial government should be reorganized and streamlined; a committee to plan and implement these projects should be established; and elections for provincial offices should be suspended starting from the next term.

• Elections for rural township, urban township, and township-level municipality offices should be suspended, and the heads of these townships and municipalities should be appointed in accordance with the law.

• The offices of deputy magistrate (for counties) and deputy mayor (for county-level municipalities) should be created, and greater power delegated to the country and county-level municipality governments.

• The legislation governing local taxes and the revision of the Law on the Distribution of Financial Revenues and Expenditures should be completed with all possible speed in order to provide a sound financial base for local governments.

Provisions in the Additional Articles of the ROC Constitution

The above projects were put into concrete provisions in the constitutional amendment of July 1997. Article 9 of the Additional Articles stipulates:

The system of self-government in the provinces and counties will include the following provisions, which will be established by the enactment of appropriate laws, the restrictions in Article 108, Paragraph 1, Item 1; Article 109; Article 112 through Article 115; and Article 122 of the Constitution notwithstanding:

• A province is to have a provincial government of nine members, one of whom being the provincial governor. All members are to be nominated by the president of the Executive Yuan and appointed by the president of the Republic.

• A province is to have a provincial advisory council made up of a number of members who are nominated by the president of the Executive Yuan and appointed by the president of the Republic.

• A county is to have a county council; members of which are to be elected by the people of the said county.

• The legislative powers vested in a county are to be exercised by the county council of the said county.

• A county should have a county government headed by a county magistrate who is elected by the people of the said county.

• The relationship between the central government and the provincial and county governments.

• A province is to execute the orders of the Executive Yuan and supervise matters governed by the counties.

The terms of office of the members of the Tenth Taiwan Provincial Assembly and of the first elected governor of Taiwan Province will end on December 20, 1998. Elections for members of the Taiwan province will be suspended following the conclusion of the terms of office of the members of the Tenth Taiwan Provincial Assembly and of the first elected governor of Taiwan Province.

Following the suspension of elections for members of the Taiwan Provincial Assembly and for the governor of Taiwan Province, modifications of the functions, operations, and organization of the Taiwan Provincial Government will be specified by law.

(E)

Local government

Local government consists of territorial institutions freely self-governed by councils elected by universal suffrage (article 72, 2 of the French Constitution). The Constitution of 1958 lays down three categories of local government: communes (roughly equivalent to parishes), departments (counties) and overseas territories (article 72, 1). The law of March 2, 1982, sparked a policy of wide-scale decentralisation which resulted primarily in the creation of new forms of local government, including the region, greater freedom of action and significant transfers to jurisdiction for the benefit of territorial institutions.

Running parallel with the central State, France now has three main levels of decentralised institutions with greater empowerment.

Decentralised institutions

France is divided into 26 regions, 100 departments and 37,000 communes. Despite this apparent diversity, each level has significant similarities in terms of both form of organisation and functioning, thus giving the decentralised system certain consistency.

Municipal organisation was transposed to the departmental and regional levels. Thus, since 1982 the different forms of territorial local government have a deliberative assembly elected by direct universal suffrage for 6 years and an executive chosen by the assembly and from its members. There are however a number of peculiarities.

The Commune, the basic territorial unit, is represented by the municipal council. Members of this council depend on the communal population, the number of which is set by law (from 9 councillors for the smallest communes to 69 for the larger cities). The same applies to the form of electoral voting for the council, which differs according to the number of inhabitants. A compromise is made between the majority vote and proportional systems, reflecting the resolve of the legislature to dovetail efficient working and representation of minorities. The first council meeting is devoted to election the mayor and his deputies, members of the commune's executive organ. Sittings, which are presided over by the mayor, are public in order to promote information for inhabitants about local life (law of February 6, 1992, concerning the territorial administration of the Republic).

The general council is the department's deliberative assembly, a department being the intermediary geographic unit between commune and region. General councillors are elected by majority vote over two rounds, and one half of their number is renewable every three years. Since the law of March 2 1982, the department's executive has been transferred from the Prefect to the President of the General Council. The council president is assisted by vice-presidents who form the permanent commission. Its members are elected for three years.

The region, created in 1982, has formally existed only since 1986 after the first elections of regional councillors. The latter are elected via a proportional list vote. The regional council elects members of the permanent commission consisting of the president of the regional council and vice-presidents. In addition to these organs, there is an economic and social council, the purpose of which is to represent the region's social and professional categories.

The functioning of local institutions revolves around a classic parliamentary pattern according to which the assembly deliberates and the president prepares and executes decisions.

The municipal, general and regional councils have competence in principle for all matters coming under their respective territorial responsibility. Primarily, elected councils adopt the local government budget and thus decide upon the creation and the organisation of local public services. Councils may delegate a part of their duties to executive bodies (mayor or permanent commissions). The economic and social council, specific to the region, has consultative power only. The same council may be convened to give its opinion on any project of an economic, social or cultural nature and plays an important role in the drawing up of State-Region plan contracts.

The executive organs of local government are charged with preparing and executing the decisions of their council (newly signed deals, representing local government at law ......). In addition, the heads of decentralised institutions (mayor and the presidents of general and regional councils) hold their own powers in matters of general policing (prevention of public unrest and keeping of the peace) and of personnel (appointments, nominations and revocation of territorial civil servants). At the municipal level, the mayor is the State's representative in the Commune. Reporting to the Prefect in terms of seniority, the mayor is charged with the publication and execution of laws and regulations, the execution of measures of general security and of special functions allocated by the legislature (for example the establishment of electoral lists). The major and his or her deputies are judiciary police officers and state registry officers. Outside these attributions, deputies have no competence of their own and exercise powers only through delegation from the mayor. The same applies to the vice-presidents of the general and regional councils which may receive powers delegated to them by their respective president.

Over and above the functional jurisdiction of local government, the decentralisation movement implemented over the past fifteen years has reinforced the powers attributed to territorial local government.

Powers attributed to local government

The law of March 2, 1982 relative to the rights and liberties of communes, departments and regions is the starting point for the updating and broadening of the principle of free administration of local government proclaimed by the constitution. However, as France is and remains a unitary State, the determination of local powers is set exclusively by the legislature; hence, the laws of January 7 and July 22 1983, which split powers between the State and local government. In the same sense, while the law of 1982 scrapped the Prefect's administrative supervision, control over local action remains through the administrative judge who may be consulted by the Prefect.

The recognised legal powers attributed to local government were increased by the laws of 1983, which conferred an overriding mission to each territorial level.

The commune was thus given control of ground (town planning in particular), supplementing existing competencies ranging from elementary education and pre-schooling to high-ways, housing, the environment, culture and even the police.

From 1983 onwards, the legislature considerably expanded the jurisdiction of the department by transferring to the latter social action (organisation of services and management of aid for the elderly, the disabled, families in difficulty and beneficiaries of minimum social benefit) transportation (inter-city and rural school transport) and communications (the bye-road network). Since 1985, secondary schooling establishment (junior and junior high) in departmental public establishments come under the authority of the general council with regards their building and functioning outside the teaching field.

Regions were awarded economic development via financial aid for the regional location of companies and for scientific and technical research. The region is now instrumental in the implementation of national planning through the signing of the State-region plan contract (law of July 29, 1982). In the field of education, the region is responsible for the building and maintenance of secondary schools and professional training. Furthermore, the region handles regional transportation and river ports. The region also plays an important role in the field of culture, resulting in the development of policies for the preservation of regional heritage, the financing of facilities and support for artistic creation.

However, the objective of installing "blocks of competence" tending to award the monopoly of attributed powers to each category of local government, has not been achieved. The multiplication of contractual relations between the different levels of local government seems to be the prime cause for confusion between competencies. In this sense, the law of February 4, 1995, relative to the planning and development of territory poses the principle of a new split of competencies "in such a way that each category of local government disposes of homogeneous competencies".

The scrapping of administrative supervision is the second key element in the policy of decentralisation. Moreover, the power to cancel local decisions has been transferred from the prefect to the administrative judge who exerts control of legality and financial control, the latter being exercised by specialised jurisdictions known as the Regional Audit Chambers.

Up Until 1982, all local decisions were subjected to the prior authorisation of the Prefect, representing the State, whose duty it was to verify their legality and appropriateness. The law of March 2, 1982, replaced this State supervision by an a posteriori control which no longer conditions the executional character of decisions. The administrative control of legality is split into two phases. The most important acts from local authorities must be forwarded to the State representative so that he or she may appreciate the legality of the decisions reached. In the event of legal irregularity, the prefect must convene the administrative judge by way of prefectorial referral with a view to cancelling the decision. In practice, the number of referrals is very small (0.03% of submitted acts). This is explained by the shortage of work force and qualified personnel within Prefectures and by ever-present supervisory practices of negotiation between State authorities and local government representatives. Note that the law of February 4, 1995, reintroduced a preventive dimension to the control of the legality of local decisions by recognising a suspensive character in prefectorial referrals for decisions affecting certain sectors such as town planning, public markets and public service delegations.

The regional audit chambers have a dual functional according to the type of auditing performed. They have jurisdiction for accounts control and for administrative authorities when acting within the framework of budget and management control (article 87 of the law of March 2, 1982). Accounts control consists in verifying the "regularity of receipts and expenditures entered into the accounts" of local government office and in ensuring "the regular employment of credits, funds and values". The final judgement handed down by the regional audit chamber may lead to a "clearance" given to the accountant or to a pronunciation of "debit balance" with obligation to reimburse personally the missing sums. This control may apply to public finance officers (local representatives) when declared "de facto accountants" by the regional chamber. In the even of irregularities, the financial (and even penal) responsibility may be levelled at the elected representative. Budget control operates in four situations provided for by the law. The prefect must convene the regional audit chamber when local government assembly has not adopted his budget, has adopted an unbalanced budget, if there is a shortfall in the execution of the budget or in the event of omission or shortfall of funds corresponding to obligatory expenditures (scheduled by the law or stemming from a decision at law or a contractual commitment). The chamber puts forward propositions and the Prefect may use a power of local government substitution (payment of budget, re-balancing of accounts and automatic entering of obligatory expenditures). Management control relates to the examination of the appropriateness of the financial choices made by local representatives, particularly in terms of investment and support for economic or cultural activities. Observations from regional audit chambers are forwarded to the public finance officer for the local government office concerned, then to the deliberative assembly. Since the law of February 6, 1992, the regional chamber may, if required by the Prefect, deliver an opinion on contracts and conventions of public service delegation concluded by decentralised local government authorities.

(F)

COMMUNITY BOARDS

Each of the 59 Community Boards is comprised of up to 50 unsalaried members, appointed by the Borough President in consultation with the Council Members who represent any part of the Board district. The Boards play an advisory role in zoning and other land-use issues, in community planning, in the city budget process, and in the coordination of municipal services. Any person with a "residence, business, professional or other significant interest" in a given area is eligible for appointment to the Community Board serving that area. Each Board hires a full-time District Manager and other staff to run a district office that receives and works to resolve residents' service delivery problems.

Bronx

Board No.1
384 East 149th St., Suite 320, Bronx, NY 10455 (718) 585-7117
Mr. George Rodriguez, Chair
Mr. Roberto Crespo, District Manager

Board No.2
1029 E. 163rd St., Bronx, NY 10459 (718) 328-9125-6
Mr. Ronald Lopez, Chair
Mr. John Robert, District Manager

Board No.3
Junior High School 98, 1426 Boston Road, Bronx, NY 10456 (718) 378-8054
Ms. Marcella R.Brown, Chair
Mr. John Dudley, District Manager

Board No.4
1650 Selwyn Ave., Suite 11A, Bronx, NY 10457 (718) 299-0800
Mr. Robert Hannibal, Jr., Chair
Mr. Adolfo Carrion, District Manager

Board No.5
Bronx Community College, Philosophy Hall ─ Basement 5,
Univ. Ave. & W. 181st St., Bronx, NY 10453 (718) 364-2030
Mr. Kenneth Fogarty, Chair
Ms. Margarita Hunt, District Manger

(G)

A SHORT GUIDE TO LOCAL GOVERNMENT

In 1996 we saw the first major reorganisation of local government since 1974. The reorganisation covered Wales, Scotland and parts of England.

Until April 1996 local government services in those areas were run by a two tier system. England and Wales having county and district councils, Scotland having regional and district councils.

April 1997 saw the next phase of reorganisation bringing in the following 13 English Unitary Councils: Bournemouth, Brighton and Hove, Darlington, Derby, Leicester, Luton, Milton Keynes, Poole, Portsmouth, Rutland, Southampton, stoke on Trent and Swindon. In April 1998 the following unitary councils will come into being: Brackell Forest Brackburn with Darwen, Blackpool, Hatton, Herefordshire, Medway Towns, Newbury, Nottingham, Peterborough, Plymouth, Reading, Slough, Southend, Thurrock, Torbay, Warrington, Windsor and Maidenhead, Wokingham, The Wrekin. Hereford and Worcester country council will cease to exist with Herefordshire unitary council and Worcestershire county council replacing it. For the purposes of the 1998 edition, we will show both the pre-April 1998 and post-1 April 1998 situation. For further information please also see Municipal Year Book Supplements.

This will mean that as of 1 April 1998 UK local government has:

34 English County Councils
32 London Borough Councils
1 Corporation of London
36 Metropolitan Borough Councils
238 English District Councils
46 English Unitary Councils
22 Welsh Unitary Councils
32 Scottish Unitary Councils
26 Northern Ireland Councils

Total:467

Functions and Responsibilities

England

County Councils generally have responsibility for strategic planning, highways, traffic, social services, education, libraries, fire, refuse disposal and consumer protection.

District councils run local planning, housing, environmental health, markets and fairs, refuse collection, cemeteries and crematoria, leisure services and parks, tourism, electoral registration.

London and Metropolitan councils are all unitary and run all services in their areas. These also have joint authorities to run wider services in their conurbation such as fire and civil defence. In April of 1996 14 unitary authorities were created handling all local government services in their area, in April 1997 another 13 were created, and in April 1998 another 19 will come into existence.

Wales

From April 1996 Welsh Unitary Councils became responsible for all local government services.

Scotland

From April 1996 Scottish Unitary Councils became responsible for all local government services. The 3 Island Councils already had unitary status.

Northern Ireland

The 26 District Councils have far fewer functions than their mainland counterparts, dealing mainly with environmental health, refuse collection and disposal, and leisure.

Elected Councils

Ultimate authority for a council's policy and decisions rests with the elected council of each authority. County councils are elected once every four years and in that year there are no district council elections. In the intervening years district councillors are elected; some districts elect a third of their councillors in each of those years while others have whole council elections every fourth year. Elections to metropolitan boroughs are also held by thirds. The London councils are elected on all an-out basis every four years. Elections to the new Welsh and Scottish unitaries will be held on a whole council basis every four years and the next contests will be in 1999.

The Council

The full council is the main forum for debate and decision and all elected councillors take part. They elect one of their number to preside over the council - known as the Chairman, Mayor, or Convenor.

Administration

According to the type of authority. In most instances it is customary for the leading member of the political party holding an absolute majority to be known as the Leader of the Council. "Hung Council" is the name given to authorities in which no single party or coalition can claim a majority.

Council Committees

Much of the work of running council affairs is delegated to committees of elected councillors. The number, range and scope of the committees is entirely in the hands of each authority and the pattern can vary widely. Most will have a committee for the main functions, for example, Finance, often known as the Policy and Resources Committee.

In principle all decisions and actions made by committees must have the approval of the full council. In the less contentious areas this amounts to a formal approval the council meeting, but on important issues the Committee makes a recommendation to the full council which then has the absolute right to accept or reject it.

Council Officers

The task of implementing and advising upon the council policy, and informing councillors of statutory limitations and ministerial guidance, rests with paid officers appointed by the council. Each council must designate one of these as the "Head of Paid Service"; this is usually the Chief Executive but sometimes alternative titles are used. The Chief Executive advises the council as a whole and has a broad co-ordinating function in relation to the activities of the other officers. Each major function is headed by a principal officer who are usually associated with particular committees (in more recent times some authorities have introduced Directors or Chief Officers overseeing a group of functions). The principal officer of finance has specific statutory duties to report on any situation where a decision could involve unlawful expenditure or if the council is likely to exceed its financial resources. As a further safeguard each council must nominate a "Monitoring Officer" who must "blow the whistle" if any action of the council is likely to contravene the law or engender a situation of maladministration or injustice such as to cause the Ombudsman to investigate (see later in this section).

Finance

Local authorities derive their income from central government grants, the business rate, rates levied upon the private individual, and, within limits, the sale of capital assets and trading activities. Each year, central government tells each local authority what it thinks it should spend to provide a level of service which is standard throughout the country. Known as the Standard Spending Assessment, this is used as the guide for assessing the level of central government grant for each authority. Business rates based on valuation of property are pooled centrally and then distributed to authorities on what is deemed to be an equitable basis. Councils then assess what they will need from individual ratepayers to balance the budget for the year. This is based on the valuation of the house occupied. Councils are free to fix the level provided they do not exceed a limit set by central government, which again is related to the SSA. It is not the SSA itself, other factors are taken into account. If an authority attempts to exceed its limit it is "capped" by Government and forbidden to do so. It is then obliged to revise its budget.

County Councils in England have a SSA set by government. They receive the grants from central government but they raise money from the ratepayers via the district councils. They levy upon each district authority, pro rata within their boundary, for the income they need. Police authorities do the same. District councils then take this into account when assessing their overall expenditure.

London, Metropolitan, English Unitary, Welsh and Scottish councils deal with all the income and expenditure and receive grants direct from central government.

Contracts

For many years local authorities provided services from their own resources, carrying the property, equipment and staff to do so. Since the Local Government Act 1988 authorities have been obliged to place an increasing range of their services out to tender. The authority itself can set up its own Direct Service Organization (DSO) to compete for contracts with tenders submitted by private contractors. The authority is required to accept the lowest tender unless it can produce sound reasons for not doing so. As a result a large proportion of services provided by local authorities is now placed out to contract (the Contracts section of this volume shows in detail the contracts that have been placed).

Heads of Paid Service

The Local Government and Housing Act 1989 Part 1 s.4 requires each local authority to designate an officer as Head of Paid Service and to provide that officer with sufficient resources to carry out the duties specified. The Head of Paid Service must report as appropriate on the co-ordination of the authority's affairs, levels, grades and organisation of staff, and their appointment and management. The report must go to every member of the authority and must be considered by the full authority within three months.

(H)

BRIEF ON THE COMMUNITY DEVELOPMENT COUNCILS

Background

As a result of our rapid economic progress, social stratification may become increasingly pronounced. The Singapore Government has and will continue to put in place programmes to meet the challenges ahead. But in the end it is the social glue holding the people together which will determine whether Singapore succeeds.

Our society needs Singaporeans who love their community and their country and who are prepared to work towards making life better off for themselves and their fellow countrymen. We also need the more able Singaporeans to feel a sense of obligation to society and help the less able by serving their neighbourhoods where they live and grew up in.

Community Development Councils (CDCs) are set up to strengthen the social glue. There are altogether nine CDCs in Singapore, all set up in 1997.

Mission

The CDC's mission is to foster community bonding. They have the responsibilities to:

(a) promote social cohesion through self-help at the community level;

(b) induct the more successful Singaporeans to help the less able;

(c) enhance community bonding among the residents; and

(d) strengthen the social infrastructure and services.

Appointment, Composition and Term of CDC

The CDCs are community organisations established by the People's Association (PA). The CDC Chairmen and Members are appointed by the Chairman or Deputy Chairman of the PA.

Each CDC has not more than 50 members. They include some Advisers to the PA grassroots organisations in the CDC district and other successful Singaporeans appointed by the PA.

The CDC members will serve a three-year term. They may be reappointed.

Mayor

When the CDC Chairman is also a Town Council Chairman, the PA Board may designate him as "mayor". There are now tow Mayors. They are Dr Ow Chin Hock for Tangjong Pagar CDC and Mr Eugene Yap Giau Cheng for Marine Parada CDC.

CDC Schemes and Programmes

For a start, the CDC will administer the following schemes:

(a) Rent and Utilities Assistance Scheme;

(b) Public Assistance Scheme;

(c) Medifund; and

(d) Small Families Improvement Scheme.

Details of the schemes and the CDC's roles are at Annex.

The CDCs will initiate, plan and manage community development programmes such as day care centres for the young and old, before and after school care, community libraries, study loans, mutual help and health and fitness programme for senior citizens.

Funding

The CDCs are given an annual grant of $1 per resident in the CDC district for its programmes. The CDCs may raise funds for its programmes. They enjoy the Institution of a Public Character (IPC) status. Every $1 raised by the CDC for approved projects is matched with a $3 grant from the Government. To encourage local donations, the Government gives a higher matching grant of $4 for every $1 raised from local residents and businesses through GIRO contributions.

The operating expenditures of the CDCs, mainly for the staff salaries, are funded by the Government through the PA. Each Secretariat is headed by a General Manager.

Service Counters and Hotline

The CDCs have set up service counters at community centres/clubs and town council officers. Residents can make enquiries and sign up for the CDC programmes and schemes at the service counters. The service counters will also refer cases to relevant agencies for problems not under the CDCs' purview.

The service counters are supported by the PA Operations Room where cases are referred and monitored.

A national hotline has also been set up at the PA for the public to make enquiries or seek help. They will be referred to the relevant agencies.

Volunteers

The CDCs will involve volunteers at two levels:

(a) At the decision making level, successful Singaporeans are inducted into the CDCs to set direction and formulate programmes; and

(b) At the implementation level, the CDCs are helped by many volunteers to perform different roles.

Annex

WELFARE SCHEMES ADMINISTERED

BY THE COMMUNITY DEVELOPMENT COUNCIL

Public Assistance

The Ministry of Community Development (MCD) disburses a monthly grant of between $180 and $535 to about 2,000 destitute in Singapore under the Public Assistance Scheme (PAS).

2. With the establishment of the Community Development Councils (CDCs), needy Singaporeans can also apply for the PAS through the CDCs. The MCD will investigate and recommend to the CDC the applicant's eligibility. The CDCs will be the approving authority for the PAS. They can also decide to top up the amount of assistance in kind or offer interim assistance to the applicants. The CDCs may also give cash assistance to unsuccessful but needy applicants.

Rent and Utilities Assistance Scheme (RUAS)

3. The National Council of Social Service (NCSS) has been administering the RUAS which pays rent and utilities for families in distress on a short-term basis. About 640 households benefit from this scheme every year.

4. The Housing & Development Board, Town Councils and grassroots organisations can continue to refer the cases to the NCSS or direct them to the CDCs. Needy Singaporeans can also apply for RUAS through the CDCs. The NCSS will continue to assign voluntary welfare organisations (VWOs) to investigate the cases. The VWOs will submit their recommendations to the RUAS committee. The NCSS will inform the CDCs of the RUAS committee's decision.

5. The CDC may decide to give additional assistance in cash or kind to the families. The Mayor will inform the families of the assistance to be given from RUAS and the CDC. The VWOs will issue the voucher and follow up with the cases.

Medifund

6. Medifund was established in 1993 as a safety net for poor Singaporeans who cannot afford to pay their hospital bills. About 45,000 persons have applied successfully for the Medifund through social workers at the hospitals.

7. Patients can continue to apply through the medical social workers (MSWs). They can also apply through the CDCs. The MSWs will investigate the cases and recommend their eligibility to the Hospital Medifund Committee (HMC). The CDC will inform the applicant or his family of the amount of hospital expenses to be defrayed by the CDC.

8. The CDCs may offer additional assistance in cash or kind to the recipients and put them on other assistance schemes. Unsuccessful cases will be reviewed by the CDCs. The CDCs may offer some financial assistance to deserving cases and place them on other assistance schemes.

Small Families Improvement Scheme

9. The MCD administers the Small Families Improvement Scheme (SFIS) which encourages low-income couples to upgrade themselves by keeping their families small so that they can concentrate their resources and attention on their children. The scheme is also extended to widows to help them in their children's educational needs.

10. Applicants can continue to apply for the scheme directly to MCD or through CDCs. The MCD will investigate and recommend to the CDC the applicant's eligibility. The CDC will be the approving authority for the SFIS. The CDC may decide to give additional assistance in cash or in kind to the successful families.

ANNEX A

WRITE-UP OF TOWN COUNCILS

Introduction

Prior to the introduction of Town Councils (TCs), public housing management services were undertaken by the Housing and Development Board (HDB), whose other main function was to provide affordable housing, while the HDB had discharged its responsibilities admirably for its public housing management services, it had done this at the price of uniformity and through the application of a rather inflexible set of rules.

Objective of Setting Up Town Councils (TCs)

2. When TC was established in 1989, it took over the management of the public housing estates and related facilities from the HDB. Under the management of TCs, residents are given the flexibility to decide on the kind of living environment they want and to participate in the day to day running of their estates.

3. The success of TC depends on capable leadership, an efficient management team and effective resident participation. TCs are also seen as an important vehicle for nation building by forging stronger community spirit, commitment and identity among Singaporeans. The main objectives of setting up TCs are summarised as follows:

(a) to transfer the responsibility for estate management from HDB to local councils;

(b) to allow participation by HDB residents in policy formulation and decision making on local estate matters; and

(c) to provide MP with the opportunity to lead TC.

Constitution and Organisation

4. A TC may be set up for a single constituency or a group representation constituency (GRC) or a combination of both. A constituency is defined as an electoral division. A TC consists of the Member of Parliament (MP) of a constituency as Chairman and not fewer than 6 or more than 30 other members appointed by the Chairman or not more than 10 members for every elected member, whichever is the greater. At least two-thirds of the appointed members must be residents of the HDB housing estates so as to reflect the views of the HDB residents. A TC is a corporate body and it can sue or be sued in its corporate name.

Functions and Duties of Town Councils

5. TCs are entrusted with the functions to control, manage, maintain and improve the common areas of the residential and commercial properties in the public housing estates and to keep them in good repair and clean condition. This means that TCs will, among other things, take charge of:

(a) conservancy;

(b) landscaping;

(c) repairs and replacement of fixtures and fittings;

(d) the provision of essential maintenance and lift rescue services

Powers of Town Councils

6. To enable TCs to carry out its functions and duties, TCs are empowered under TC Act to perform the following:

(a) to establish and maintain facilities for recreation, relaxation and other educational and cultural activities;

(b) to make improvements to the common property with the consent of the HDB;

(c) to acquire property for the performance of the TC's functions;

(d) to manage, by agreement, the HDB carparks and industrial property or the government's market and food centre;

(e) to levy service and conservancy charges;

(f) to levy charges for the use of any facilities or services;

(g) to accept gifts and donations;

(h) to borrow moneys to undertake projects;

(i) to invest its surplus funds in trustee stocks; and

(j) to enter any flat or property to carry out maintenance or repair work.

Public Control and Accountability

7. In addition to its main management and maintenance functions, TCs are required to keep proper accounts and records of its transactions and to ensure adequate control over its receipts, payments, expenditure and assets. The annual accounts of TCs are required to be checked by the Auditor-General or by an approved auditor appointed by the Minister.

(I)

A) LOCAL GOVERNMENT

The Kingdom of Belgium is a federal monarchy that consists of 3 regions (Flanders, Wallonia and Brussels-Capital) and 3 communities (Flemish, French and German-speaking). Each region is divided into provinces (10).

Each region and community has its own government and elected parliament. However, as regards Flanders, there is only one government and parliament covering regional and community matters. Each province has its own elected council and its city/village has its own elected council. These bodies can raise own taxes to improve the living conditions of its citizens (infrastructure works, construction of cultural centres and sports accommodations). Semi-government agencies are helping the councils in providing different facilities like water and energy supply.

The federalisation negotiations and reforms started in the 1960s and is an on-going process. One of the next steps for instance will be the federalisation of the national health services. Following is a summary of the community and regional matters. In these fields, the federal authorities have no powers.

(J)

ANNEX

I The Netherlands

There are two levels of local government in the Netherlands, the city level and the provincial level.

1. Cities have two local government organs, the city council on the one hand, and the college of the mayor and the aldermen on the other hand. The city councillors are directly elected during municipal elections and the city councillors elect the aldermen among themselves. The mayor is formally appointed by the Crown, but in reality he or she is appointed by the Minister of the Interior on the advice of the governor (Royal Commissioner in the Netherlands). The college of the mayor and the aldermen are the daily management of the cities and its activities are monitored by the city councils.

2. At the provincial level, there is a similar structure with two provincial bodies, the Provincial States and the Provincial Executive. The Provincial States, which are the equivalent of the city council on the provincial level, are directly elected during regional elections. The Provincial States then elect among themselves members of the Provincial Executive. At the provincial level, the Royal Commissioner has a similar function as the mayor at city level.

II Germany

Each German state (Germany is divided into 16 states, which have their own well-defined competence) has its own specific local government legislation stipulating how the local authorities (municipal council, city council, district council) are elected. However, the local government legislation can more or less be divided into three categories, i.e. South German Council Legislation, the North German Council Legislation and the Town Council Legislation. About 12 states have adopted the South German Council Legislation.

According to this South German Council Legislation, the citizens of a village/town elect both the municipal council and the mayor. Under this system, the mayor is in a strong position as he is the chairman of the municipal council and head of the municipal administration at the same time. The municipal council controls the mayor's activities and occupies the several committees.

Under the North German Council Legislation, the citizens elect only the municipal council. This council appoints the mayor, who will be the chairman of the council but this function is an honorary one only under this system, and the village/city director, which leads the administration.

The third system is the Town Council Legislation. Under this system, there are two local government bodies: the city council and the college body, an authority heading the administration. The citizens elect the assembly of city councillors, which elects and controls the college body. This college body is the supervisory committee that consists of the mayor and department leaders. It leads the administration.

Smaller villages are assembled in the district council. The citizens of a district council directly elect the district council. The elected district council members appoint among themselves a district administrator, who will head the district council, and a district committee that is also led by the district administrator. In two states, they even appoint a senior district director. Towns and cities, on the other hand, are not represented in district councils due to their size.

Annex IV

WRITTEN ANSWER

Written answer by the Secretary for Transport to Miss Miriam LAU's supplementary question to Question 4

The Mass Transit Railway Corporation has advised me that about two-thirds of the managers are from operation and project departments, while the remaining one-third from relevant support departments. The work of the managers concerned will be absorbed by existing staff through streamlining and the move will not result in any reduction in the quality of service and impact upon passenger safety.