Establishment Subcommittee of the Finance Committee -- Minutes -- 4 Nov 98

LC Paper No. ESC17/98-99
(These minutes have been
seen by the Administration)

Ref : CB1/F/3/2

Establishment Subcommittee of the Finance Committee of the Legislative Council

Minutes of the fourth meeting held at the Legislative Council Chamber on Wednesday, 4 November 1998, at 10:45 am

Members present :

Dr Hon Philip WONG Yu-hong (Chairman)
Hon NG Leung-sing (Deputy Chairman)
Hon Cyd HO Sau-lan
Dr Hon Raymond HO Chung-tai, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon CHEUNG Man-kwong
Hon CHAN Wing-chan
Hon Andrew WONG Wang-fat, JP
Hon Howard YOUNG, JP
Hon SZETO Wah

Members absent :

Hon David CHU Yu-lin
Hon Michael HO Mun-ka
Hon Eric LI Ka-cheung, JP
Dr Hon David LI Kwok-po, JP
Hon Margaret NG
Hon MA Fung-kwok
Hon CHAN Kwok-keung
Hon Bernard CHAN
Dr Hon LEONG Che-hung, JP
Hon Jasper TSANG Yok-sing, JP
Hon YEUNG Yiu-chung
Hon Emily LAU Wai-hing, JP
Hon CHOY So-yuk

Public officers attending :

Mrs Carrie LAM, JP: Deputy Secretary for the Treasury
Mr D W PESCOD, JP: Deputy Secretary for the Civil Service
Mr Herman CHO: Principal Assistant Secretary for Education and Manpower
Mr LEE Kai-fat, JP: Deputy Commissioner for Labour
Dr LO Wai-kee, JP: Occupational Health Consultant, Labour Department
Mrs Kathryn WONG: Assistant Director of Health (Administration)
Mr TIN Hon-wai: Principal Assistant Secretary for Housing
Mr LO Yiu-ching, JP: Director of Territory Development
Mr K C LAU: Deputy Secretary for Works
Mr H B Phillipson, JP: Director of Electrical and Mechanical Services
Mr Roger LAI: Trading Services Manager, Electrical and Mechanical Services Trading Fund

Clerk in attendance :

Miss Polly YEUNG: Chief Assistant Secretary (1)3

Staff in attendance :

Ms Pauline NG: Assistant Secretary General 1
Ms Anita SIT: Senior Assistant Secretary (1)8

EC(98-99)12

Proposed transfer of one permanent post of Consultant (D4/D3/D2) and 26 non-directorate permanent posts together with their establishment ceiling from Department of Health to the Occupational Health Service of Labour Department with effect from 1 December 1998 to reflect accurately the management structure and the resources provided to the two departments in pursuit of their respective programme areas

Noting that in response to members' concerns raised at the last meeting, the Administration had consulted the Grades Consultative Committees of the Department of Health (DH) on the proposal, a member expressed support for the proposal. He sought clarification on the management responsibilities of the Labour Department (LD) and DH in respect of the 27 medical and nursing posts proposed to be transferred from DH to LD. In reply, the Deputy Commissioner for Labour advised that under the present secondment arrangement, LD was responsible for the day-to-day management of the posts to meet the operational requirements of the Occupational Health Service in LD while DH took charge of the grade management functions which included recruitment, posting, promotion and professional training of the grades of officers concerned. This division of management responsibilities would continue upon the formal transfer of the 27 posts from the establishment of DH to that of LD. The Assistant Director of Health also confirmed that a mechanism was in place for DH and LD to work out the posting of medical and nursing officers between the two departments, having regard to the career development of individual officers and the operational needs of the departments.

2. Responding to members' enquiries about the aforesaid management arrangements, the Deputy Secretary for the Civil Service (DS/CS) advised that in principle, management of posts in the civil service should be distinguished from the management of officers in individual departments. He gave an example of the case of the General Grades such as Administrative Officers, Executive Officers, Clerical Officers and secretarial staff. These General Grades posts were found in nearly all bureaux/departments but the overall grade management functions were centralised in the Civil Service Bureau. Similar to but distinct from the General Grades were the Common Grades, such as the Medical and Nursing Officer Grades (with which the present proposal was concerned) and the Engineer Grade. These Common Grades posts existed in a number of bureaux/departments but the respective grade management functions were under the responsibility of one department only. At a member's request, DS/CS agreed to provide a supplementary information paper to elucidate the management arrangements for Common Grades in the civil service.

Admin.

3. The item was voted on and endorsed.

EC(98-99)10

Proposed creation of one permanent post of Chief Engineer (D1) in the Territory Development Department to implement the new measures endorsed by the Steering Committee on Land Supply for Housing and monitor the progress of the delivery of housing and housing-related projects

4. The item was voted on and endorsed.

EC(98-99)11

Proposed retention of the supernumerary multi-disciplinary post of Chief Electrical and Mechanical Engineer/Chief Building Services Engineer/Chief Electronics Engineer (D1) for a period of one year from 6 December 1998 under the Electrical and Mechanical Services Trading Fund to provide efficient and effective electrical and mechanical maintenance services at Hong Kong International Airport and advisory services prior to the redevelopment of Kai Tak

5. A member queried the need for the retention of a post at D1 level to provide maintenance services at the new Hong Kong International Airport (HKIA) which had already commenced operation. Referring to the duty list enclosed with the paper, he cast doubt on the justification for keeping a professional staff to handle matters such as the negotiation with the Airport Authority (AA) for renewal of maintenance contracts and for new business. Another member was concerned about whether the costs incurred for the proposed post would be passed on to the clients of the Electrical and Mechanical Services Trading Fund (EMSTF) and ultimately to the users of the HKIA. He also considered the proposal not conducive to the objective of operating the EMSTF on a sound commercial basis, bearing in mind that private companies were striving to cut costs and raise productivity to sustain business under the current economic climate.

6. In response, the Administration explained that the proposed supernumerary D1 post, designated as Airport Sector Manager (ASM), was created under delegated authority on 6 June 1998 to meet the new work requirements generated by three major maintenance contracts which the Electrical & Mechanical Services Department (EMSD) obtained from AA after a competitive tendering exercise and to oversee the transition of electrical and mechanical operations from Kai Tak to Chek Lap Kok in July 1998. Recognising the need to control costs effectively, the present proposal only sought to retain the post for one year up to December 1999 as the three main contracts with AA were for 15 months only, though EMSD would seek to renew these contracts. Apart from administering the contracts with AA and the Service Level Agreements with 13 Government departments to ensure prompt and effective delivery of maintenance services at HKIA and at Kai Tak, ASM was also responsible for the provision of advisory services to AA, the Works Bureau and client Government departments. On the business side, ASM had to prepare for the renewal of contracts with AA, as well as to explore business opportunities for EMSTF to bid for additional work at HKIA. In reply to a member, the Trading Services Manager of the EMSTF further clarified that several temporary engineering posts, which had been created specifically for the new airport construction projects, had already lapsed upon project completion.

7. Addressing members' concern about cost-effectiveness, the Director of Electrical and Mechanical Services (DEMS) assured members that EMSD would only seek to create new posts where there was a genuine need, and in fact had been striving to streamline the department's establishment towards the target of attaining a 15% productivity gain in three years. The costs for providing a D1 post to oversee the maintenance contracts had been taken into account when determining the tender price. There would not be any financial implication on Government expenditure as the staff costs for the proposed post were fully recoverable from the EMSTF. The proposal also would not give rise to any additional charges on the clients.

8. DEMS also stressed that whilst the maintenance contracts with AA would be administered on a strict commercial basis, the input of ASM was necessary to ensure that the contract requirements could be fulfilled to the satisfaction of AA, which in turn would enhance EMSD's competitiveness for additional work contracts at HKIA. He added that the costs incurred for the ASM post accounted for only about 1% of the total value of the contracts at HKIA.

9. In this connection, the Deputy Secretary for the Treasury re-affirmed that the Finance Bureau and the Civil Service Bureau had scrutinized each staffing proposal carefully particularly in the light of the current economic climate. In the present case, the need to control costs and increase productivity was evident as EMSD was required to meet the financial targets set for the EMSTF and to prepare itself to compete with other service providers for service agreements with the Government and other public bodies with effect from August 1999. She confirmed that there had virtually been no increase in staff in EMSD over the past two years and that the proposed supernumerary ASM post was justified for both operational and business needs.

10. Regarding members' concerns about the significance of the maintenance contracts with AA for the EMSTF, the Deputy Secretary for Works remarked that EMSD bidded for these contracts because they were conducive to meeting EMSTF's financial targets and could provide good opportunities for EMSD to contribute its expertise and experience and strengthen its competitive edge in this service area. DEMS supplemented that there were ample business opportunities at HKIA as the new airport was undergoing expansion with a second runway and an extension of the passenger terminal building. A member considered that EMSD should seek to secure longer term contracts for works at the HKIA so as to better utilise its resources and build up relevant experience. In response, DEMS shared his concern and confirmed that it was also EMSD's strategy was to secure, where practicable, longer term contracts with AA.

11. Taking note of the Administration's explanation, some members stated their support for the proposal. They supported EMSD's drive to bid for maintenance contracts with AA and opined that although the HKIA was now in use, a good standard of service was still needed. They agreed that adequate directorate support was important to enable EMSD to deliver quality maintenance services at the new airport. Moreover, the experience gained from the contracts with AA could help equip the EMSTF for market competition upon expiry of the 3-year full protection period in 1999. The members also considered the proposed one-year retention of the ASM post reasonable given the duration of the existing contracts with AA and the work requirements during the retention period.

12. The item was voted on and endorsed.

13. The Subcommittee was adjourned at 11:25 am.

Legislative Council Secretariat
24 November 1998