Establishment Subcommittee of the Finance Committee -- Minutes -- 16 Sept 98

LC Paper No. ESC8/98-99
(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 second meeting held at the Legislative Council Chamber on Wednesday, 16 September 1998, at 10:45 am

Members present :

Dr Hon Philip WONG Yu-hong (Chairman)
Hon NG Leung-sing (Deputy Chairman)
Hon David CHU Yu-lin
Hon Cyd HO Sau-lan
Hon Michael HO Mun-ka
Dr Hon Raymond HO Chung-tai, JP
Hon Margaret NG
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon MA Fung-kwok
Hon CHEUNG Man-kwong
Hon Bernard CHAN
Hon CHAN Wing-chan
Hon Jasper TSANG Yok-sing, JP
Hon Howard YOUNG, JP
Hon YEUNG Yiu-chung
Hon Emily LAU Wai-hing, JP
Hon CHOY So-yuk

Members absent :

Hon Eric LI Ka-cheung, JP
Dr Hon David LI Kwok-po, JP
Hon CHAN Kwok-keung
Dr Hon LEONG Che-hung, JP
Hon Andrew WONG Wang-fat, JP
Hon SZETO Wah

Public officers attending :

Mrs Carrie LAM, JP: Deputy Secretary for the Treasury
Mr D W PESCOD, JP: Deputy Secretary for the Civil Service
Ms Shirley LAM: Principal Assistant Secretary for Transport (5)
Mr KAM Wai-yip, JP: Deputy Commissioner for Transport
(Planning and Technical Services)
Ms Linda CHOI: Assistant Secretary for Transport
Mr LAU Ching-kwong, JP: Deputy Director of Highways
Mrs Jessie TING: Deputy Secretary for Information Technology and Broadcasting
Mr Y C CHENG: Principal Assistant Secretary for Information Technology and Broadcasting
Mr K H LAU, JP: Director of Information Technology Services
Mr Raymond YOUNG: Deputy Secretary for Education and Manpower
Dr Nancy LEE: Head of Support Unit for the Standing Committee on Language Education and Research, Education and Manpower Bureau
Mr CHAU Tak Hay, JP: Secretary for Trade and Industry
Miss Annie TANG: Director-General of Industry
Mr Bobby CHENG: Principal Assistant Secretary for Trade and Industry

Clerk in attendance :

Ms Pauline NG: Assistant Secretary General 1

Staff in attendance :

Ms Anita SIT: Senior Assistant Secretary (1)8

EC(98-99)1

Proposed creation of two permanent posts of one Government Engineer (D2) and one Chief Engineer (D1) with effect from 30 September 1998 in the new Strategic Infrastructure Branch of the Transport Department

Responding to a member's enquiry about the rationale for creating the two directorate posts on a permanent basis for the new Strategic Infrastructure Branch (SIB), the Deputy Commissioner for Transport (Planning and Technical Services) (DC for T) advised that unlike the Airport Core Programme (ACP) projects which had a definite scope and time schedule, the strategic infrastructure projects on the pipeline would stretch over a very long time up to 2016. Besides, further new projects would come on stream upon completion of the current transport studies. It was thus considered appropriate to create the two new posts of the SIB on a permanent basis.

2.On the rationale for pitching the head of the SIB at the Government Engineer (GE) (D2) level, Miss Emily LAU questioned if it was necessary to create posts at senior level so as to establish rapport with the senior directorate of other government departments and the management of non-government corporations or agents concerned" as stated in the paper. DC for T explained that the planning and implementation of strategic infrastructure projects often proceeded under a tight schedule. As such, GE/SIB, representing the Transport Department on these projects, would be required to make independent professional judgement and resolve project specific issues directly with the senior directorate of other concerned parties. It was considered that the professional expertise and the level of responsibility of a GE were necessary for the effective performance of the liaison and co-ordination tasks.

3. Miss LAU was not convinced that the stature of the post was a requisite for the effective performance of the communication duties, having regard to the decision-making process of the Administration. In reply, the Deputy Secretary for the Civil Services (DS/CS) remarked that GE/SIB was to lead the SIB and take charge of a range of communication, professional and managerial responsibilities. The ability to make effective liaison and co-ordination with concerned parties was one important factor, but not the only factor. The Civil Service Bureau and the Standing Commission on Directorate Salaries and Conditions of Service considered the ranking and grading of the post appropriate, having regard to the whole range of responsibilities of the post.

4. Some members expressed concern about the progress of the Ma On Shan (MOS) Rail Link project, and enquired if the Administration had any plan to withhold the project due to difficulties in financing the project. The Principal Assistant Secretary for Transport (5) and DC for T advised that the plan was to complete the MOS Rail Link (including the East Rail extension from Hung Hom to Tsim Sha Tsui) by 2004. Meanwhile, various options of other East Rail extensions to Kowloon were being examined under the Second Railway Development Study. They confirmed that the work on the MOS Rail Link was proceeding as scheduled.

5. The item was voted on and endorsed. Miss Emily LAU requested that her reservation on the proposal be recorded.

EC(98-99)2

Proposed retention of one supernumerary post of Government Engineer (D2) in Highways Department for a period of six months up to 31 March 1999 to oversee the resolution of a substantial contractual claim relating to the Ting Kau Bridge project

6. Responding to members' enquiries about the details of Claim 34, with which the proposed extension of the Government Engineer/Ting Kau Bridge (GE/TK) post was concerned, the Deputy Director of Highways (DD/Hy) advised that under Claim 34, the contractor had claimed for 173 days' extension of time and a quantum of about $500 million. The claim had become a dispute between the Government and the contractor, and according to the terms of the contract, the claim would be referred to mediation in the first place. If this was of no avail, the arbitration proceedings would be initiated.

7. As to whether the work on resolving the claim could be taken up by Chief Engineer/Ting Kau Bridge (CE/TK) or absorbed through other deployment arrangements, DD/Hy explained that when approval was sought to extend the GE/TK post to end of September 1998, it was planned on the basis that all major claims related to the project would have been resolved then. Unfortunately, the contractor submitted Claim 34 only in June this year. It would not be possible for CE/TK to process the claim in addition to his current duties in finalising other financial and contractual matters. DD/Hy affirmed that other possible deployment arrangements had been carefully examined, but in view of the complexity and gravity of the claim, it was concluded that the task required the expertise, the directorate responsibility and the on-the-job experience of the incumbent GE/TK. As regards workload, presently, GE/TK already had to work on the claim personally on a full-time basis. To prepare for the mediation proceedings, he was required to peruse voluminous documents and make detailed assessment on the merits and quantum of the claim together with thorough presentation of the facts at issue. He confirmed that the workload entailed required GE/TK to be involved on a full-time basis.

8. The Deputy Secretary for the Treasury (DS/Tsy) supplemented that based on Finance Bureau's experience in considering and eventually approving resolution of contract claims of public works projects, she could confirm that the mediation proceedings usually proceeded under a tight schedule and the project engineer, the GE/TK in this case, was required to be heavily involved, not only in fact-finding, but also in the writing up and presentation of detailed assessments based on his professional judgement. He had to ensure that Government responded in time with proper assessment on the claims. Failing that, Government might have to enter into the arbitration proceedings which was substantially more costly. Hence, with an objective of securing a settlement by mediation, the Finance Bureau supported the proposed extension which would enable the GE/TK to oversee the mediation proceedings on a full-time basis. DS/CS also confirmed that the Civil Service Bureau, having carefully examined the work requirements and the various possible alternatives of staff deployment, agreed to the proposed extension on the understanding that the extension period would be shortened if a settlement could be secured earlier than scheduled.

9. Some members, while expressing support to the proposed extension on account of the complexity and gravity of the claim and the heavy work requirements of the claim resolution proceedings, enquired about the cost-effectiveness of the claim resolution programme as set out in Enclosure 1 to the paper. DD/Hy advised that in the past, resolution of contract claims could drag on for years after completion of works. To facilitate more efficient and economical handling of claims for ACP projects, Government had drawn up a set of procedure for mediation of contract claims. As for other ACP projects, it was stipulated in the contract for the Ting Kau Bridge (TKB) that disputes on contract claims would be resolved first by mediation, followed by arbitration if mediation was of no avail. Mediation was an economical way of securing settlement as it did not involve legal proceedings and thus did not require much input from legal professionals. For Claim 34, as the claim involved some legal aspects of the contract, both Government and the contractor would engage legal representatives (not senior counsel) for the mediation proceedings but the required legal input would be limited.

10. Miss Margaret NG expressed concern that under the present resolution programme, further extension of the GE/TKB post might be required for the arbitration hearings. DD/Hy responded that once the case had reached the stage of arbitration, the legal representatives would play a more prominent role and the involvement of GE/TK would be limited. Nevertheless, the officer concerned would still be with the Department and thus could provide support on a part-time basis as and when necessary. Hence, further extension of the GE/TK post for the arbitration hearings should not be required. Having noted DD/Hy's explanation, Miss NG maintained her reservation on the present claim resolution programme and urged the Administration to re-consider referring the claim to arbitration directly so as to save the time and resources spent on mediation.

11. Some members expressed concern about the recent reports by the media that some cracks had been found on the deck surface of TKB after a few months of commissioning. DD/Hy confirmed that some cracks had occurred on a part of the northbound road of TKB. The constractor of the project was carrying out the required repair works and had employed a consultant to look into the problem. He advised that the problem was not related to Claim 34 and GE/TK was not responsible for supervising the repair works. As TKB was part of the Tsing Ma Control Area, its maintenance would be carried out by the management company of the control area but the repair was supervised by the CE/TK.

12. The item was voted on and endorsed. Mr CHEUNG Man-kwong objected to the item.

EC(98-99)5

Proposed -

creation of one new rank and permanent post of Deputy Director of Information Technology Services (D3);

creation of two permanent posts of Chief Systems Manager (D1);

deletion of one permanent post of Chief Systems Manager (D1); and

increase of the establishment ceiling in 1998-99 from $447,048,540 by $11,834,160 to $458,882,700 for the creation of 18 non-directorate posts

in the Information Technology Services Department to strengthen its staffing support to take on new roles and projects for the promotion and development of information technology in Hong Kong

13. In response to a member's question about the long term staffing requirements of the Information Technology Services Department (ITSD), the Deputy Secretary for Information Technology and Broadcasting (DSITB) advised that the present proposal had already taken into account the staffing requirements arising from the department's planned projects and programmes in the foreseeable future.

14. Members noted that one of the reasons for strengthening ITSD's staffing support was to take on its new role in the promotion of wider use of IT in the community. Members questioned in what manner new information technology (IT) initiatives could help the business sector in Hong Kong and how far the business sector could help support these initiatives. In response, the Director of Information Technology Services (DITS) advised that the development of electronic commerce could help create competitive advantage for Hong Kong businesses. Through the implementation of the Electronic Service Delivery scheme, Government could facilitate this development by providing an information infrastructure with an open common interface. Government would also work on resolving the issues of security, data protection and privacy etc. which were pertinent to public acceptance of electronic commerce as a norm. In this regard, ITSD would participate actively in the standard-setting process of international standards bodies to ensure that Hong Kong not only adopted, but also contributed to the development of, internationally accepted standards. DSITB supplemented that Government would encourage IT researches through the provision of financial assistance under various schemes, and would facilitate collaboration between academia and the local IT industry on the commercialization of IT innovations.

15. Responding to a member about the potential and commercial viability of developing Hong Kong into an Internet traffic hub, DITS advised that presently, most Internet traffic was directed through the United States which provided the transmission service at a charge. He believed that Hong Kong had the potential to become an international information centre and to develop into a profitable Internet traffic hub. As regards Hong Kong's comparative position in IT usage, penetration, promotion and development, DITS advised that in certain respects, Hong Kong compared favourably with other developed countries. For example, the territory was now completely covered by an optical fibre network; up to 34% of the households in Hong Kong possessed a personal computer; and about 9% of the total population were Internet users.

16. As to how the Government would encourage small and medium enterprises to take part in the development of electronic commerce, DITS advised that at present, various businesses in the private sector were engaged in electronic commercial transactions. The main focus of Government's work would be on establishing common standards and on developing an information infrastructure that would provide equal access opportunities for all businesses. Referring to the impact of current economic conditions on the business sector, DSITB stressed that one important task of the Government was to enhance the competitiveness of Hong Kong, and the more extensive and beneficial use of IT in the community would contribute to this objective. New projects would be implemented progressively.

17. On the development of software applications, and the training of teachers and supporting personnel for strengthening support in schools, DSITB advised that the Education and Manpower Bureau (EMB) and the Education Department (ED) played the leading role in the formulation and implementation of policies on the utilisation of IT in education, while ITBB and ITSD played a supporting role. DITS advised that as in the past, ITSD would continue to provide technical support in the development of IT systems for educational purpose, and give technical advice in the course of the deliberation on this policy area. A Member pointed out that the utilisation of IT in the field of education in Hong Kong was lagging behind other developed countries. The provision of hardware to schools alone would not enhance the competence of teachers and students in the use of IT. There should be better co-ordination between ITSD and ED in the provision of training support to schools. DSITB undertook to bring the matter to the attention of EMB.

18. Responding to a member's comment that ITSD was slow in adopting new versions of computer software for individual departments, DITS explained that before approving the adoption of a new version, ITSD needed to ensure the compatibility of the new version with the existing systems and the availability of sufficient technical support to handle any interface problems that might arise. ITSD must also ensure that the existing critical on-line services for the public would not be affected. However, provided that there were sufficient funds, Government bureaux and departments had delegated authorities to purchase new software versions for use in stand-alone computers as this would have no impact on existing system networks. He added that ITSD ran pilot tests and trials on new computer software and maintained close liaison with software companies with a view to bringing in new versions of software for use by bureaux and departments as early as possible.

19. The item was voted on and endorsed.

EC(98-99)6

Proposed non-civil service appointment of a language research professional at the equivalent rank of D2 on contract terms in the Education and Manpower Bureau of the Government Secretariat with effect from October 1998 as Head of the Support Unit of the Standing Committee on Language Education and Research

20. Responding to questions on the purpose of the non-civil service appointments and whether the continuous employment of the incumbent would defeat the purpose of the arrangement, the Deputy Secretary for Education and Manpower (DSEM) explained that non-civil service appointments provided the Government with the flexibility to appoint the most suitable persons from the market with the skills required. DSEM added that as the post-holder referred to in the paper needed to possess up-to-date expertise in language research, it was unlikely that the same person would be re-appointed to the post on a continuous basis. Nevertheless, the re-appointment of the present incumbent was being considered. If she was found suitable, her contract would be renewed for another two years.

21. Noting that the salaries of the language expert in the last contract had been paid out of the Language Fund, a member questioned the cost-effectiveness of the appointment in relation to the promotion of the objectives of the Fund. DSEM explained that the language expert, being head of the SCOLAR Support Unit, was not only responsible for overseeing the operation of the Fund, but also the planning and co-ordination of policies on language education. He took note of a member's view that the work emphasis of the appointment should be on front-line implementation of language education initiatives, rather than on research work.

22. As regards the performance of the Language Fund, DSEM advised that since its establishment in 1994, the Fund had sponsored over 200 language education projects. The overall feedback from organisers and participants of these projects had been favourable. The Fund presently had a balance of about $100 million, which should be sufficient for the Fund's operation for the next two to three years. Thereafter, consideration would be given to seek replenishment out of the General Revenue or to seek funding from the Quality Education Fund.

23. A member commented that information on the remuneration and the financial implications of the proposed non-civil appointment was not given in the paper. At the Chairman's request, the Administration agreed to furnish detailed information on the financial implications, including the remuneration package, for non-civil service appointments in the same way as proposals for civil service posts.

Admin.

24. A member also requested the Administration to look into the present practice of engaging contract staff from local tertiary institutions. These staff still occupied their own teaching posts during the period of contract with the Government, though without pay. DSEM responded that he was not in position to comment on the practice of tertiary institutions, but agreed to consider it as a relevant factor for considering the suitability of candidates in future appointment exercises. He also informed members that the existing incumbent had already terminated her employment with the previous employing institute upon taking up the present appointment.

25. The item was voted on and endorsed.

EC(98-99)3

Proposed creation of one supernumerary post of Administration Officer Staff Grade B1 (D4) in the Trade and Industry Bureau of Government Secretariat for the period up to 31瓱arch 2001 to enable the secondment of a civil servant to the Hong Kong Industrial Estates Corporation as its Chief Executive

26. Noting that the Commission on Innovation and Technology would submit its first report to the Chief Executive shortly, a member enquired whether the proposed secondment for the Chief Executive post of the Hong Kong Industrial Estates Corporation (HKIEC) would be affected by the recommendations of the Commission made in the report. The Secretary for Trade and Industry (STI) clarified that the report would not include a review on the institutional framework of the industrial and technological support programmes and organizations. Instead, the Commission would conduct the review in the 12 months following the submission of its first report. The period of the proposed secondment was to tie in with the timeframe of the above mentioned review.

27. Responding to a member's enquiry about the response and result of the recruitment exercise for the Chief Executive/HKIEC post conducted earlier this year, STI advised that HKIEC had engaged a recruitment agency to conduct the recruitment exercise and a committee had been set up under the Board of Directors of HKIEC to screen the shortlisted applications and interview probable candidates. Nine candidates had been shortlisted and seven invited to interview. Unfortunately, the only candidate found suitable had turned down the offer. At the member's request, the Administration agreed to confirm the total number of persons responded to the vacancy advertisement.

Admin.

28.As regards the occupancy of industrial estates, the Director-General of Industry (DG of I) advised that most of the lots in Tai Po and Yuen Long Industrial Estates had been leased out; but in the case of Tseng Kwan O Industrial Estate, about 45 hectares out of the total 70 hectares had been left over. As regards the surrender of land grants to HKIEC, DG of I advised that the surrender/withdrawal of land grants over the past year involved about 13.8 hectares of land. At the member's request, the Administration agreed to provide further information on the number of companies involved.

Admin.

29. The item was voted on and endorsed.

EC(98-99)4

Proposed creation of one new rank and permanent post of Technical Secretary (Industry) (D1) in the Technology Development Division of the Industry Department to be offset by the deletion of an existing rank and post of Quality Co-ordinator (D1) in the Quality Services Division

30. In reply to a member, DG of I advised that no new post had been created as a result of the departmental review conducted in July 1997. The review only resulted in the redeployment of some existing posts.

31. Regarding the timing for the deletion of the Quality Co-ordinator post, DG of I advised that the existing incumbent of the post was employed on contract terms and the post would be deleted upon the expiry of the current contract in February 2000. Nevertheless, it was possible that the post could be deleted sooner if the incumbent of the post left the post before that time.

32. The item was voted on and endorsed.

Any Other Business

33. Miss Margaret NG made a general remark that some of the proposals discussed at this meeting were concerned with work plans arising from the new initiatives announced in the 1997 Policy Address or some time earlier on. As the economic conditions of Hong Kong had undergone substantial changes over the past year, she considered it necessary to reflect in the paper the changes in circumstances since then so that members were in a position to assess the need for the staffing proposals. DS/Tsy undertook to consider the Member's suggestion.

Admin.

34. The Subcommittee was adjourned at 1:00 pm.

Legislative Council Secretariat
14 October 1998