LC Paper No. CB(1)1253/98-99
(These minutes have been seen
by the Administration)

Ref: CB1/PL/ES/1

Members present :

Hon James TIEN Pei-chun, JP (Chairman)
Hon Fred LI Wah-ming (Deputy Chairman)
Hon Kenneth TING Woo-shou, JP
Hon LEE Wing-tat
Hon Martin LEE Chu-ming, SC, JP
Hon Eric LI Ka-cheung, JP
Hon MA Fung-kwok
Hon CHEUNG Man-kwong
Hon Ambrose CHEUNG Wing-sum, JP
Hon HUI Cheung-ching
Hon Christine LOH
Hon CHAN Yuen-han
Hon Bernard CHAN
Hon CHAN Kam-lam
Hon SIN Chung-kai
Hon Howard YOUNG, JP
Hon LAU Chin-shek, JP
Hon Mrs Miriam LAU Kin-yee, JP
Hon Andrew CHENG Kar-foo

Members attending :

Dr Hon Raymond HO Chung-tai, JP
Dr Hon LUI Ming-wah, JP
Hon NG Leung-sing
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon Emily LAU Wai-hing, JP

Members absent :

Hon David CHU Yu-lin
Dr Hon David LI Kwok-po, JP
Dr Hon Philip WONG Yu-hong
Hon WONG Yung-kan
Hon FUNG Chi-kin

Public officers attending :

For Agenda Item IV

Mr Stephen IP

Secretary for Economic Services

Ms Maria KWAN

Deputy Secretary for Economic Services

Mr Eric JOHNSON

Principal Assistant Secretary for Economic Services

Mr C T LEUNG

Director of Electrical and Mechanical Services

Mr S Y WONG

Assistant Director (Gas & General Legislation)

Electrical and Mechanical Services Department

Mr T P FU

Chief Engineer (Gas Utilization)

Electrical and Mechanical Services Department

For Agenda Item V

Mr Stephen IP

Secretary for Economic Services

Mr Arthur HO

Deputy Secretary for Economic Services

Mr Howard LEE

Principal Assistant Secretary for Economic Services

(New Airport)

Mr Simon LI

Chief Planning Officer

Civil Aviation Department

Attendance by invitation :

For Agenda Item V

Airport Authority Hong Kong

Mr Billy LAM

Acting Chief Executive Officer

Mr K S NG

General Manager - Terminal Operations

Clerk in attendance :

Ms Estella CHAN

Chief Assistant Secretary (1)4

Staff in attendance :

Mr Daniel HUI

Senior Assistant Secretary (1)5

I Confirmation of minutes
(LC Paper No. CB(1)1013/98-99 - Minutes of meeting held on 25 January 1999)

The minutes of the meeting held on 25 January 1999 were confirmed.

II Information paper issued since last meeting
(LC Paper No. CB(1)1018/98-99 - Consultation on the Consultancy Study on Arrangements for Supporting the Development of Agriculture in Hong Kong)

2. Members noted the information paper issued since last meeting.

III Items for discussion at future meetings
(LC Paper No. CB(1)1012/98-99(01) - List of outstanding items for discussion)

Meeting scheduled for 26 April 1999

3. The Chairman said that Members agreed at the House Committee meeting on 12 March 1999 that individual Legislative Council Panels should follow up with corresponding Bureaux the progress of the year 2000 (Y2K) compliance exercise within Government, Government-funded and Government-regulated organizations under the purview of the individual Bureaux. He suggested that the Economic Services Panel should discuss this subject at the next meeting scheduled for 26 April 1999. Members agreed that the Economic Services Bureau should be requested to provide a comprehensive report on the progress of the Y2K compliance exercise undertaken within the Bureau, relevant Government Departments and those non-Government organizations providing essential services in the areas of aviation, utilities and container terminal operation. Depending on the outcome of the discussion at the meeting, the Panel might invite individual organizations to discuss their Y2K compliance progress in greater detail.

4. As agreed by members, the two discussion items for the meeting scheduled for 26 April 1999 were :

1. Year 2000 compliance in Government, Government-funded and Government-regulated organizations under the purview of the Economic Services Bureau; and
   
   
2. Follow-up on retail prices of major fuels.

Meetings in May

5. Members agreed that a special meeting of the Panel should be held sometime between the April and May meetings to discuss subjects related to electricity supply in Hong Kong, including the consultancy study on interconnection system between the two power companies and demand side management programmes.

(Post-meeting note : The Administration has subsequently informed the Secretariat the report of the consultancy study on interconnection system between the two power companies would not be ready for discussion in May 1999.)

6. As proposed by Mr Howard YOUNG, members agreed to discuss airport charges of the new airport at the regular meeting scheduled for 24 May 1999.

IV Safety of flueless gas water heaters
(LC Paper No. CB(1)1012/98-99(02) - Information paper provided by the Administration)

7. Dr Raymond HO Chung-tai declared interest as a member of the Gas Safety Advisory Committee (GSAC).

Prohibition of use of flueless gas water heaters

8. Introducing the contents of the information paper provided by the Administration, the Director of Electrical and Mechanical Services (DEMS) advised that the GSAC had supported the proposal to prohibit the use of flueless gas water heaters serving bathrooms and showers and the Administration would proceed with legislative amendments to implement the proposal. The GSAC could not however reach a consensus on the prohibition of sale and new installation of flueless gas water heaters serving kitchens.

9. Members supported the Administration's proposal to prohibit the use of flueless gas water heaters serving bathrooms or showers but considered that the prohibition should be extended to flueless gas water heaters serving kitchens. They pointed out that it was not uncommon that flueless gas water heaters installed in kitchens were in fact used to serve both kitchens and bathrooms and as such, the improper use of flueless gas water heaters in kitchens could be equally dangerous. Moreover, due to the small living space of Hong Kong households, the ventilation in bathrooms and kitchens were generally inadequate as compared with the conditions in Europe, in which the use of flueless gas water heaters had not been prohibited. They were also of the view that the sale of flueless gas water heaters should be banned. In response, the Secretary for Economic Services (SES) advised that the Administration had not proposed an immediate ban on about 59,000 flueless gas water heaters which were already installed for serving kitchens because such water heaters were considered safe if used according to the safety instructions. However, given Panel members' unanimous view that both the use and sale of flueless gas water heaters should be prohibited, the Administration would further review the subject and consult the GSAC before making a final decision.

10. Dr Raymond HO said that the Hong Kong Institute of Engineers was supportive of the proposal to ban the sale of flueless gas water heaters. He further advised that the proposed ban would not have major impact on the trade as the annual sales of flueless gas water heaters in Hong Kong was only about 1,200 units. Moreover, there were other models of gas water heaters for consumers to choose.

11. Mr CHAN Kam-lam said that it took time to complete the legislative amendment to implement the prohibition of use of flueless gas water heaters. He enquired about measures to be taken to encourage households to replace their flueless gas water heaters currently in use. Mr Howard YOUNG enquired about means to enhance the general public's knowledge of proper use of flueless gas water heaters during the interim. In response, DEMS advised that as the Hong Kong and China Gas Company Limited had complete customer records on households installed with flueless gas water heaters, follow-up work in those cases would be straight forward. Customer records in respect of flueless gas water heaters using piped Liquefied Petroleum Gas (LPG) were also up to date and would facilitate follow-up work. The Administration in conjunction with the gas suppliers would send brochures and information leaflets to the relevant households to inform them of the danger of improper use of flueless gas water heaters and to encourage them to replace the water heaters. The Administration would also educate the general public on the proper use of flueless gas water heaters through the mass media.

12. Members expressed concern about the lack of complete customer records in respect of flueless LPG water heaters using LPG cylinders, which would hamper follow-up work. DEMS advised that there were about 8000 flueless LPG water heaters fuelled by LPG cylinders. As the gas distributors were required to conduct safety inspections in respect of gas installations of their customers once every 18 months, the relevant customer records could be updated during the safety inspections. As requested by members, SES and DEMS agreed to consider whether gas distributors should be required to conduct safety inspections in 12-monthly intervals instead of 18-monthly intervals.

Admin

13. Mr LAU Chin-shek opined that the Administration should consider providing financial assistance to households for replacement of flueless gas water heaters if use of flueless gas water heaters was prohibited. SES noted Mr LAU's comments.

14. In response to members' question on the time-table for legislative amendments to implement the proposed prohibition of use of flueless gas water heaters, SES advised that in view of members' support for prohibition of the use of flueless gas water heaters serving bathrooms as well as those serving kitchens, the Administration would consult the GSAC again on the latter proposal. Thereafter, the Administration would prepare draft legislation and seek the Executive Council's approval before submitting the relevant Bill to the Legislative Council. DEMS further advised that the Administration hoped to be able to complete the legislative amendment by September/October 1999 and there would be a grace period of six months to allow households to replace their flueless gas water heaters.

15. Members considered it important to have the legislative amendment completed as soon as possible to ensure that the proposed prohibition could be implemented before the next winter. SES noted members' views.

Regulation of activities of gas distributors

16. Mr Fred LI Wah-ming expressed concern about inadequate monitoring by the Administration of activities of gas distributors. He observed that there were about 300 gas distributors but not all of them were registered gas contractors. He doubted whether gas distributors had the necessary expertise to provide to customers technical back-up services in relation to safety of gas installations. In response, DEMS advised that at present about 75% of gas distributors were registered gas contractors. He agreed that close monitoring of gas distributors, particularly those who were not registered gas contractors, would be required in order to enhance safety. In this respect, the Administration was drafting a new code of practice detailing the duties and responsibilities of gas distributors. The Administration aimed to complete the draft and present it to GSAC by July 1999. Moreover the Administration would further consider whether it would be justified to require registration of all gas distributors as gas contractors.

17. In response to members' question on whether legislative amendment would be required to strengthen the regulation of activities of gas distributors, SES advised that the Administration would review the adequacy of relevant areas of existing legislation and if legislative amendments were required, they would be made as soon as possible, but the exercise would be separate from the legislative amendments in relation to the proposed ban on use of flueless gas water heaters.

18. Ms CHAN Yuen-han supported the Administration's proposal to improve and control safety standards of imported domestic gas appliances. Referring to an accident occurred a few years ago involving sub-standard LPG cylinders, she said that attempts to take legal action against the LPG cylinder supplier had to be given up because the wording of the existing legislation was unclear as regards legal responsibilities of suppliers of gas appliances. She suggested that the Administration should critically review the adequacy of existing legislation in order to impose liability on suppliers of sub-standard gas appliances. DEMS noted Ms CHAN's comments and said that his Department would review the subject in consultation with the Department of Justice.

V Follow-up on the recommendations of the three inquiry reports on the new airport
(LC Paper No. CB(1)1012/98-99(03) - Information paper provided by the Administration
LC Paper No. CB(1)1012/98-99(04) - A checklist of recommendations of the three inquiry reports)

19. The Chairman expressed dissatisfaction about the delay in provision of information paper by the Administration (Paper No. CB(1)1012/98-99(03)), which was faxed to the Legislative Council Secretariat only just before noon on Saturday 20 March 1999, while the meeting was scheduled for the following Monday, 22 March 1999. He was concerned that members might not have adequate time to read the paper.

20. The Secretary for Economic Services (SES) apologized for the delay in providing the information paper and explained that it was time-consuming for the Economic Services Bureau (ESB) to co-ordinate contributions from various concerned Bureaux and Departments in preparing the "Progress Report on Follow-up Actions Concerning the Motion Debate on the Report of the Legislative Council Select Committee on the New Airport". Introducing the contents of the progress report, SES emphasized that the Administration had studied carefully the Select Committee's Report as well as Reports of the Commission of Inquiry and the Ombudsman and had taken follow-up actions as set out in the progress report. He said that the Administration hoped that Hong Kong would benefit from the lessons that could be learned from the opening of the new airport. He further advised that the Board and the management of the Airport Authority (AA) had also taken follow-up actions to improve the service of the new airport and remarkable results had been achieved. The Hong Kong International Airport had recently been named by some international organizations as one of the best airports in the world and Hong Kong should be proud of this achievement. He acknowledged however that AA should continue to work hard to further improve the operation of the airport.

21. Briefing members on the improved standard of service at the new airport, Mr Billy LAM, the Acting Chief Executive Officer of the Airport Authority, advised that at present 90% of the arriving passengers could complete their immigration check within 15 minutes and collect their luggage thereafter within 10 minutes. By the end of February 1999, the new airport had handled a total of 19.4 million passengers and one million tonnes of air cargo, equivalent to about 460 flights and 80,000 - 90,000 passengers per day. During the Lunar New Year Holidays, the highest recorded daily number of passengers handled was 117,000. Throughout this period, the services remained at high standards, demonstrating the ability of the new airport to operate smoothly even under heavy traffic pressure. He further advised that a survey of passengers carried out by an independent institution in December 1998 revealed that about 93% of the respondents were satisfied with the standard of services of the new airport. The new airport had also been selected by an engineering and construction fraternity expo in the United States of America as one of the 10 great building projects in the twentieth century.

22. As regards follow-up actions taken by AA in response to the recommendations in the three inquiry reports, Mr LAM advised that follow-up actions had been taken as set out in paragraphs 13 to 16 of the progress report endorsed by a special committee under the AA Board.

Operation of the airport

23. Dr Raymond HO Chung-tai noted from an information paper prepared by the Information Technology and Broadcasting Bureau for the Panel on Information Technology and Broadcasting that AA would complete its rectification work on compliance with the Year 2000 (Y2K) problem by September 1999. He was concerned that the proposed work schedule of AA on the Y2K issue might not be able to cope with system problems which might occur as early as 9 September 1999 as some experts had warned. He was also of the view that AA should as far as possible employ the services of local experts in dealing with the Y2K issue in order to facilitate monitoring of the work of the contractors concerned. In response, Mr Billy LAM advised that in handling the Y2K issue, AA had borne in mind lessons learned from the opening of the new airport and would pay particular attention to risk assessments and contingency planning. He said that there were about 133 operation systems in AA which might be affected by the Y2K problem. Different work priorities had been accorded to these systems depending on the extent of their effect on the operations of the airport and the complexity of the systems concerned. Rectification work on those systems which were more complex and highly critical to the operation of the airport, including the Flight Information Display System, the baggage conveying system and the Airport Operation Data Base were targetted for completion in June 1999, and by then 98% of the rectification work would have been completed. Comprehensive testing of the contractors' work would be carried out before acceptance and any follow-up work, if required, would be carried out as soon as possible. A specialized team of experts had been formed in AA to co-ordinate and monitor the works of the contractors and to conduct tests on works delivered by the contractors. Simulated tests on possible risks associated with particular dates, such as dates involving the digit "9", as in 9 September 1999, etc., would be conducted as early as possible. He noted Dr HO's views on the need to closely monitor the performance of the contractors concerned and undertook to provide more detailed information on the subject for the Panel's meeting scheduled for 26 April 1999 under the agenda item "Year 2000 compliance in Government, Government-funded and Government-regulated organizations under the purview of the Economic Services Bureau".

24. In response to Mrs Miriam LAU Kin-yee's question on the proposed enhanced monitoring scheme on the two air cargo terminal operators in the new airport, Mr LAM said that the franchise agreement between AA and the two cargo terminal operators had only provided for very broad based monitoring of the franchisees. However, learning from lessons from the opening of the airport, AA saw the need for an enhanced monitoring scheme and had commenced discussions with the cargo terminal operators with a view to introducing the scheme which aimed to help AA oversee the smooth and efficient handling of air cargo and be alerted of problems in advance. At the operational level, AA had already forwarded a proposed framework of the enhanced monitoring system to the air cargo terminal operators for consideration. It was expected that a common understanding towards an enhanced monitoring system could be reached with the management of the two cargo terminal operators by May 1999. Meanwhile, an expert from the Electrical and Mechanical Services Department had been seconded to AA to help develop framework for monitoring the efficient operation of the various mechanical systems and the level of maintenance service required. In addition, AA would also monitor the progress of the cargo terminals in work relating to the Y2K problem and preparation of contingency plans.

25. As regards the compatibility and co-ordination of contingency plans of AA and the cargo terminal operators, Mr LAM advised that AA had appointed the former Director of Civil Aviation, Mr Richard SIEGEL, as its Operations and Management Consultant who had started a comprehensive review of its crisis management plans, including contingency arrangements. The review of the crisis management plans which covered the safety and security arrangements of the airport would be completed by April 1999 whereas that for the contingency plans was scheduled to be completed by June 1999. In parallel with Mr SIEGEL's efforts, there would also be contingency plans on air cargo terminal operation to be prepared by the cargo terminal operators and contingency plans within AA in relation to potential operational problems arising from the Y2K issue. AA would thoroughly study the contingency plans when they were available in order to ensure efficient co-ordination amongst the parties concerned.

Re-organization of the Airport Authority

26. Noting that the primary function of AA had shifted from planning and construction of the new airport to operation of the new airport, Mr Howard YOUNG enquired whether membership of the AA Board, which was due for reappointment by end of May 1999, would include elements of representation from users of the new airport. In response, SES confirmed that the Administration was considering future membership of the AA Board having regard to the change of primary function of the Authority. The Administration would consider appointment of persons who were familiar with the operation of the new airport to be members of the AA Board.

27. Ms Emily LAU Wai-hing pointed out that the progress report provided by the Administration had not addressed the Select Committee's recommendation that "When the Chairman of an authority is not also the chief executive, as in the case of AA, the board should be given unqualified power to hire or fire, particularly the most senior staff member in the authority". SES advised that the Administration noted the views of the Select Committee in this respect. In the case of AA, since its Chief Executive Officer was also a member of the AA Board appointed by the Chief Executive of Hong Kong Special Administrative Region (CE), removing the Chief Executive Officer from office therefore required prior approval of CE in order not to pre-empt the prerogative of CE. He emphasized that in practice, the AA Board had full authority to instruct the Chief Executive Officer and monitor his performance.

28. Ms LAU opined that paragraph 6 of the progress report provided by the Administration had not fully addressed the Select Committee's recommendation that "only competent people who are prepared to commit their time and effort should be appointed to governing bodies of executive authorities". In response, SES said that the Administration would assess carefully the suitability of prospective appointees, taking into account factors such as their personal abilities, expertise, experience, integrity and commitment to public service. The Administration would also monitor the performance of appointees, including their attendance records, to facilitate consideration of their suitability for reappointment. As requested by Ms LAU, SES and Mr LAM agreed to seek the agreement of the AA Board to provide the Panel with the attendance records of AA Board members at meetings of the Board and its Committees.

Admin

29. Regarding Ms LAU's question on follow-up actions in relation to the Select Committee's recommendation that "In order not to undermine the authority of governing bodies of executive authorities, and also to hold such governing bodies responsible in the event of any problems or failure, the Government should deal directly with the governing bodies and not with the staff.", SES advised that the function of the AA had shifted from planning and construction of the new airport to operating the airport and the Administration fully recognized that the responsibility for management and operation of the airport lay solely with AA. He further advised that as the new airport had become operational, the Airport Development Steering Committee and the New Airport Projects Co-ordination Office had completed their tasks and had been dissolved.

Personal responsibility of individual civil servants

30. Mr LEE Wing-tat said that the Select Committee, after lengthy deliberations, had found that a few individual civil servants should bear personal responsibility for the problems surrounding the commencement of the operation of the new airport. He was not satisfied with the Administration's broad-brush response, as in paragraph 8 of the progress report, to the Select Committee's findings in this respect. He added that CE had to provide detailed facts to support his conclusion that the officers concerned had performed their duties with due diligence and that there was no prima facie evidence to support disciplinary action. He strongly urged CE to attend a meeting of the Legislative Council to answer Members' questions on the Administration's follow-up actions relating to the findings and recommendations of the three inquiry reports. He said that the Democratic Party would consider initiating a resolution of the Council under the Legislative Council (Powers and Privileges) Ordinance (Cap. 382) to summon CE to LegCo meetings. Mr CHEUNG Man-kwong shared Mr LEE's views and supplemented that AA and the Hong Kong Air Cargo Terminals Limited had recently taken disciplinary actions against individual staff members who had personal responsibility for the problems. It would be unacceptable if no disciplinary action was taken against individual civil servants concerned without strong supporting reasons.

31. In response, SES advised that CE had studied the comments in the three inquiry reports on the question of personal responsibility of individual civil servants concerned, having regard to the Government's established procedure to deal with misconduct, negligence or dereliction of duty. After careful consideration, CE had concluded that there was no prima facie evidence to support disciplinary action on any of the officers concerned since there was no question of misconduct. As regards CE's attendance at LegCo meetings, he said that CE had explained his position in his letter to the Chairman of the House Committee. He also pointed out it was his understanding that as agreed by Members at the House Committee meeting on 26 February 1999, individual LegCo Panels would follow up recommendations of the three inquiry reports, and the question concerning personal responsibility of individual civil servants would be followed up by the Panel on Public Service. At the request of Members, he agreed to convey to the CE's Office Mr LEE and Mr CHEUNG's views on CE's attendance at LegCo meetings to reply to Members' questions on the subject.

The way forward

32. Noting that the progress report provided by the Administration covered follow-up actions taken by ESB as well as other Bureaux and Departments, members considered that the discussion would not be fruitful without representatives from other relevant Bureaux and Departments present at the meeting to answer members' questions relating to all aspects of the information contained in the paper. After deliberation, members agreed to further discuss at the House Committee meeting on 26 March 1999 a more efficient and effective way to follow up recommendations in the three inquiry reports.

33. The Chairman suggested that as there was insufficient time for all interested members to ask questions and for the Administration and AA to provide answers, a special meeting of the Panel should be scheduled for mid-April to continue discussion on the subject. Members agreed that subject to House Committee's decision on the way forward in following up the recommendations in the inquiry reports, a special meeting of the Panel would be held on 14 April 1999 at 4:30 pm to continue discussion on this subject.

(Post-meeting note : Pursuant to the House Committee's decision at its meeting on 26 March 1999, a joint meeting of the LegCo Panel on Economic Services, Panel on Home Affairs, Panel on Planning, Lands and Works and Panel on Public Service will be held on 14 April 1999 at 4:30 pm to follow up the recommendations of the three inquiry reports on the opening of the new airport.)

VI Any other business

34. There being no other business, the meeting ended at 12:45 pm.


Legislative Council Secretariat
4 May 1999