INTRODUCTION

1. The Airport Authority has been mindful that after airport opening there is a need to change from a management structure which was suitable for a situation primarily involving construction to one required for airport operations.

2. The employment terms of certain senior management have been so planned to fit into the timing of this anticipated change, which will enable the Authority to function more efficiently in the future.

3. In addition to the structural changes, some members of the senior management team indicated last year that they intended to leave the Authority once the airport was open.

4. Therefore, these two elements have resulted in the re-modeling of the senior management of the Authority to achieve greater efficiency and cost reduction.

SENIOR MANAGEMENT STAFF CHANGES

5. The former Chief Executive Officer left the Authority's service effective 1 December 1998 upon the expiry of his employment contract with the Authority. At the Authority's Board meeting on 26 November 1998, the appointment of Mr Billy Lam who had been on secondment from the civil service as Deputy Chief Executive Officer since January 1998, as Acting Chief Executive Officer with effect from 1 December 1998 was approved. The appointment was announced on the same day.

6. Both the Planning & Co-ordination Director and the Corporate Development Director also left the Authority's service effective 1 December 1998 having completed their fixed term employment contracts with the Authority.

7. Pending further review on the nature of work and responsibilities, their duties have been taken up by appropriate candidates at the General Manager level. The requirement for director level staff to deal with the more routine, day-to-day activities of operating the airport is not justified and therefore the duties of these two Directors have been taken up by General Manager level staff.

8. The Human Resources Director has resigned to leave the Authority's service effective 1 January 1999. The position, which has been regraded as "Head of Human Resources & Administration" for the same reason as above was advertised both internally and externally on 27 October 1998 and 30 October 1998. A suitable candidate was identified and has been offered appointment to commence duty during the month of December 1998.

9. The Project Director has also tendered resignation to leave the Authority's service effective 1 January 1999. His last day of work will be 12 December 1998 as he will be taking leave from 14 December 1998 to 31 December 1998 inclusive. An experienced internal candidate has been identified to take over his duties.

10. The Airport Management Director was re-appointed on a six-month fixed term contract from 1 September 1998 to 28 February 1999 following his retirement at age 60 in August 1998. He will leave the Authority's service on 28 February 1999 and action will commence shortly to source and appoint a replacement for his position.

RATIONALE FOR CHANGES

11. As explained, the nature of the Airport Authority's function is now very different from when it was a construction-focussed organisation. Previously, there was a need for project management skills and for the technical capabilities which were required for over-seeing a very large development project. The prime focus is now on the operation of one of the world's busiest international airports in accordance with prudent commercial principles as stipulated under the Airport Authority Ordinance and this requires a different range of skills and management. This requirement has always been anticipated.

CONCLUSION

12. Like any other major corporations, the Authority has to be responsive to the need for organisational changes as its function and business evolve. The recent changes and personnel movements in the Airport Authority show prudent planning for the operational requirements of Hong Kong International Airport in the years to come. There will be no impact on continuing construction works for future phases, such as the second runway. With the significant reduction in the number and level of senior management posts it is expected that the Authority will be able to take advantage of these organisational changes to enhance the cost-effectiveness of its management structure.


Airport Authority
10 December 1998