Panel on Transport (Minutes) 26 March 99

Legislative Council

LC Paper No. CB(1) 1329/98-99
(These minutes have been seen
by the Administration)

Ref: CB1/PL/TP/1

LegCo Panel on Transport

Minutes of meeting held on Friday, 26 March 1999, at 10:45 am in Conference Room A of the Legislative Council Building

Members present :

Hon Mrs Miriam LAU Kin-yee, JP (Chairman)
Hon Edward HO Sing-tin, JP
Hon Albert HO Chun-yan
Dr Hon Raymond HO Chung-tai, JP
Hon LEE Wing-tat
Hon LEE Kai-ming, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon Andrew WONG Wang-fat, JP
Hon LAU Chin-shek, JP
Dr Hon TANG Siu-tong, JP

Members absent :

Hon LAU Kong-wah (Deputy Chairman)
Hon Andrew CHENG Kar-foo
Hon TAM Yiu-chung, JP
Hon FUNG Chi-kin

Public officers attending:

Item IV
Transport Bureau
Mr Nicholas NG Wing-fui: Secretary for Transport
Ms Linda LAI: Deputy Secretary for Transport
Miss Eliza LEE: Principal Assistant Secretary for Transport
Transport Department
Mr Robert FOOTMAN: Commissioner for Transport
Mr K C CHING: Assistant Commissioner for Transport
For Item V
Transport Bureau: Mr Nicholas NG Wing-fui
Secretary for Transport
Ms Linda LAI: Deputy Secretary for Transport
Mr Brian LO: Principal Assistant Secretary for Transport
Transport Department: Mr Robert FOOTMAN
Commissioner for Transport
Mrs Dorothy CHAN: Deputy Commissioner for Transport
Mrs Judy LI: Assistant Commissioner for Transport
Department of Justice
Mr Benedict LAI Deputy Law Officer (Civil Law)
For Item VI
Transport Bureau
Mr Nicholas NG Wing-fui: Secretary for Transport
Ms Linda LAI: Deputy Secretary for Transport
Mr Brian LO: Principal Assistant Secretary for Transport
Transport Department
Mr Robert FOOTMAN: Commissioner for Transport
Mrs Dorothy CHAN: Deputy Commissioner for Transport
Mrs Judy LI: Assistant Commissioner for Transport
Department of Justice
Mr Benedict LAI: Deputy Law Officer (Civil Law)

Clerk in attendance :

Mrs Vivian KAM,: Chief Assistant Secretary (1)5

Staff in attendance :

Mr Jimmy Y T MA, JP,: Legal Adviser
Mr LEE Yu-sung,: Senior Assistant Legal Adviser
Mr Andy LAU,: Senior Assistant Secretary (1)6

I.Confirmation of minutes and matters arising
(LC Paper No. CB(1) 953/98-99 -- Minutes of the meeting held on 22 January 1999)

The minutes of the meeting held on 22 January 1999 were confirmed.

II.Information papers issued since last meeting
(LC Paper No. CB(1) 1005/98-99 -- Chinese version of the North Island Line and East Kowloon Line Brochure)

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

III. Items for discussion at the next meeting scheduled for 23 April 1999
( LC Paper No. CB(1) 1033/98-99(01) -- List of outstanding items for discussion
LC Paper No. CB(1) 1033/98-99(02) -- Progress of Year 2000 Compliance Exercise in Transport-related Organizations)

3.The Chairman advised that at the meeting of the Planning, Lands and Works (PLW) Panel on 23 March 1999 when members considered a financial proposal from the Administration due for submission to the Public Works Subcommittee (PWSC) for consideration on 14 April 1999, they expressed gave concern about the timely provision of transport network to tie in with the overall development of the reclamation project in Tseung Kwan O, in particular, about the proposed Western Coast Road project which was estimated to be completed by 2006/07. Mr Edward HO, Chairman of the PLW Panel, supplemented that as the proposed reclamation project would have serious implications on the traffic and transport systems within the area, it would be more appropriate for the Administration to brief the Transport Panel on the subject matter before making a formal proposal to the PWSC. After deliberation, members agreed to follow up on the subject matter at the next meeting scheduled for 23 April 1999. Meanwhile, the Administration would be requested to consider deferring the submission of the item to the PWSC on 14 April 1999.

(Post-meeting note: The Administration agreed to defer the item pending the deliberation of the Panel.)

4.Members also agreed to discuss the following items at the next meeting:

Progress of Year 2000 compliance exercise in transport-related organizations; and
Review of Green Mini Bus operations on Hong Kong Island.

(Post-meeting note: With the concurrence of the Chairman, item (b) above had been deferred to make way for discussion of the item on "Proposed amendment to tunnel legislation".)

5 Referring to the item on "Progress of Implementation of Hongkong Tramways" Safety and Service Improvement Programme' which had originally been proposed by the Administration for discussion at the meeting in April 1999, members agreed that an information paper on the subject should first be circulated for members' reference before members decided whether it was necessary to follow up the matter at a later meeting.

Admin

6 Referring to the exempted accessories under the Motor Vehicles (First Registration Tax) Ordinance (Cap. 330), members considered that in consideration of the need for and the rising popularity of hands-free mobile phone, exfactory products of this type should be included in the list of exempted items under Cap. 330. They agreed that the Administration should be requested to provide a written response to the Panel's request in this regard.

Admin

(Post meeting note: The information paper referred to in paragraph 5 and the Administration's response in respect of paragraph 6 were circulated to members vide LC Papers No. CB(1)1169/98-99(01) and (02).)

Meeting time for regular Panel meetings

7 In connection with a suggestion for rescheduling Finance Committee meetings to Friday mornings at 10:45 am, the Chairman sought members' view on whether the regular meeting of the Transport Panel should be rescheduled to cater for the change. After deliberation, members agreed that meetings of the Transport Panel should continue to be held on the fourth Friday of each month at 10:45 am, pending the decision of the House Committee on the proposed rescheduling of Finance Committee and House Committee meetings.

IV. Traffic management measures to alleviate congestion in Central, Wanchai and Western Districts (LC Paper No. CB(1) 1033/98-99(03) -- Information paper provided by the Administration)

8 The Assistant Commissioner for Transport (AC for T) briefed members on the salient points of the paper.

9 Mr LAU Chin-shek observed that there had been a proliferation of buses after the New World First Bus Services (NWFB) had taken over the China Motor Bus Company Limited. Coupled with an increase in loading/unloading and queuing activities of buses, traffic congestion in Central had been aggravated. He enquired about measures taken and to be taken to address the problem. Mr Edward HO also observed that there was often a long bus queue along Connaught Road Central which had created problems for pedestrians crossing the road and had also resulted in air pollution. Since many of the buses were semi-empty, he urged the Administration to examine the possibility of rationalizing bus services.

10 Mr CHAN Kam-lam, however, took the view that the better services provided by NWFB should not be used as a reason for blaming the company for attributing to traffic congestion in Central.

11 AC for T advised that the increase in bus trips itself should not be a key factor attributing to the traffic congestion problem in Central. The total number of buses operating in Central only accounted for about 6% of the total volume of traffic. Whilst the number of bus stops and buses weaving into and out of bus stops would have implications on traffic flow, various measures had been implemented to address the problem. These included diversion of bus routes, rationalization of bus stops resulting in a reduction of about 1,100 stoppings for buses in a peak hour, traffic re-routing and traffic signal adjustments. The Administration was also working on other measures to further reduce the traffic congestion problem which might be caused by bus stopping activities. These included truncations, shortworkings and frequency reduction of bus routes. The Administration recognized the need to conduct further examination in order to minimize the impacts on bus passengers and would liaise with the concerned bus companies with a view to finalizing proposals for implementation in one to two months' time.

12 Mr LAU Chin-shek further enquired whether the congestion problem was due to a proliferation of buses and stopping activities when Western Harbour Crossing and New Airport bus services were introduced. He also asked for information about the actual bus allocation as opposed to the scheduled requirements. Mr HO Chun-yan also enquired about the average waiting time of buses at bus stops and whether a further rationalization of bus stops was possible.

13 In response, AC for T explained that bus services were operated basically in accordance with the Schedules of Service. However, due to traffic congestion during peak hours, additional vehicles might be deployed to meet the service requirement. Regarding the designation of bus stops for Western Harbour Crossing and New Airport bus services, these were provided on a needed-basis to meet passenger demand. In fact, upon the rationalization of bus stops in Central, some 1,100 stoppings for buses during a peak hour had been saved, though this was offset by the increased number of 800 bus stoppings for the Western Harbour Crossing and New Airport bus services. As for the average waiting time of buses at bus stops, AC for T said that this would vary depending on actual traffic situation and loading/unloading activities at bus stops. The Administration would rationalize the location of bus stops on roads such as Connaught Road Central and roads in Wan Chai.

14 On the traffic congestion problem in Central, the Secretary for Transport (S for T) advised that since the major corridors in Central had reached their full capacity, he envisaged that the problem would continue for some time. Nevertheless, the Administration would continue to work on measures to address the problem. Whilst the long term solution would be with the construction of new roads under the Central Reclamation Phase III Project to increase the road capacity as well as other traffic restraint measures such as fiscal policy to restrict road usage, the Administration would also explore other localized improvement measures to address the problem. For example, a two-lane temporary road linking Connaught Place to Lung Wui Road via Edinburgh Place for one-way eastbound traffic would be constructed to ease congestion.

15 Mr CHAN Kam-lam and Mr Edward HO shared S for T's view that the long term solution to the problem would be with the provision of new roads. Mr HO Chun-yan, on the other hand, requested the Administration to explore all possible means including traffic restraint and fiscal measures for addressing congestion problems in Central. However, Mr CHAN Kam-lam expressed reservation about the use of fiscal measures to restrict motorists from using essential passing routes in Central which linked the eastern and western parts of Hong Kong island. He also cautioned about possible impacts on passengers associated with frequency reduction and rationalization of bus stops. The Chairman and Mr CHAN Kam-lam urged the Administration to speed up the planning of the road expansion programme under the Central Reclamation Phase III Project, and put forward a concrete proposal for the consideration of the Council.

Admin

16 As a long term solution to the problem, Mr LAU Chin-shek suggested that the Administration should accord priority to the construction of the Mass Transit Railway North Hong Kong Island Line. AC for T took note of Mr LAU's view and advised that the subject would be examined in the context of the Third Comprehensive Transport Study.

17 Mr CHAN Kam-lam drew attention to the fact that the Financial Secretary had proposed to increase the toll for private cars using the Cross Harbour Tunnel from $10 to $20. If the proposal were implemented, it would attract existing traffic to the Western Harbour Crossing and, in turn, would further aggravate traffic congestion in Central. He requested the Administration to take note of this in drawing up relief measures.

18 Mr Edward HO said that whilst it might not be appropriate to further reduce the numbers of bus stops, one possible option was to provide bus interchanges at suitable locations to facilitate the east-west links on Hong Kong island. To enhance the viability of the proposal, the Administration should explore the feasibility of global positioning system to make possible the dissemination of bus-related information including the arrival time of buses at bus stops.

19 The Commissioner for Transport (C for T) advised that whilst NWFB was examining the feasibility of providing a global positioning system for bus operation, the technology itself was not yet mature. He added that the Administration also intended to provide an integrated transport network which would allow efficient and convenient interchange amongst various transport modes, particularly along the railway lines; the related studies were being undertaken by the Transport Department. S for T advised that one of the problems with the provision of interchanges in urban areas was the shortage of suitable sites for such purpose. In fact, a minor scale project involving one to two routes had already been implemented by Kowloon Motor Bus Company Ltd. The Administration would, nevertheless, continue to explore the feasibility of the proposal.

20 In response to a member, C for T clarified that the provision of bus services could help alleviate traffic congestion as in terms of carrying capacity, buses were the most efficient carrier on the road.

21 In concluding, the Chairman said that the Panel would continue to monitor the traffic situation in Central and decide on the need to follow-up on the subject matter upon the implementation of improvement measures by the Administration in two months' time.

Admin

V. Transitional arrangements for the outlying islands, new town and inter-harbour ferry services
(LC Paper No. CB(1) 1033/98-99(04) -- Information paper provided by the Administration)

22 A submission from the Democratic Party was tabled at the meeting and circulated to members after the meeting vide LC Paper No. CB(1) 1062/98-99(02).

23 Mr HO Chun-yan briefly introduced the salient points of the paper prepared by the Democratic Party. He was of the view that in recent years, the Hongkong and Yaumati Ferry Company Limited (HYF) had failed to provide a satisfactory ferry service in Tuen Mun and this had led to a reduction of passengers for the Central-Tuen Mun route. However, the population of Tuen Mun indicated that the actual demand for such service should not be low. To improve the popularity of the new service, he reminded the Administration not to use the past patronage figure as the basis for planning the new service. Rather, the new operator should be requested to provide a more frequent service at the outset to attract potential passengers.

24 The Deputy Commissioner for Transport (DC for T) replied that the Transport Department would liaise with the new ferry operators to ensure that the services would be adequate to cope with demand. Extra ferries would also be made available to fill the service gap, if necessary.

25 Noting that 340 HYF staff would be laid off on 1 April 1999, Mr LAU Chin-shek expressed grave concern about the future of the staff. He enquired about actions taken by the Administration to assist the HYF staff and whether the new operators would be prepared to take over the staff on the same employment terms as currently offered by the Company.

26 The Assistant Commissioner for Transport (AC for T) advised that a total of 132 posts were offered to HYF staff by the new operators, through HYF and the staff unions. So far, only 40 staff had turned up for interviews, and 32 qualified staff had been offered appointment. 21 candidates had so far accepted the offer. As for the remaining vacant posts, the companies had to fill these posts through other sources.

27 Regarding the laying-off terms, AC for T advised that these were in compliance with the Employment Ordinance and similar to those offered in past exercises. Affected staff would be entitled to a wide range of termination benefits, including wage in lieu of notice and ex-gratia payment, severance payment or retirement fund, etc. Some of the staff had been redeployed to work within the Hong Kong Ferry Group. She further advised that of the 340 staff, about 160 were already reaching retirement age.

28 Mr LAU Chin-shek enquired about the reason for some HYF staff not taking up new employment offered by the new companies, and whether this was a result of the unattractive terms of employment. AC for T advised that the basic employment terms offered by the new operators were in general similar to those offered by HYF and were in line with market level. However, in terms of total package, existing HYF staff might have a higher take-home pay as they had more overtime allowance, bonus and other income from the sale of snacks and drinks. Furthermore, the retirement benefits offered by HYF were also more attractive. AC for T supplemented that individual staff members were at liberty to make their own choice and the Administration had provided every possible assistance for them to rejoin the workforce.

29 Mr LAU Chin-shek observed that the Employment Ordinance was not applicable to a person who was serving under a crew agreement within the meaning of the Merchant Shipping (Seafarers) Ordinance (Cap. 478), or on board a ship which was not registered in Hong Kong. Whilst the laid-off terms for HYF employees followed those of the Employment Ordinance, he saw a need for the Administration to review the co-existence of two different sets of legislation for seafarers.

30 Given the variation of fares between conventional ferries and fast ferries, Mr LEE Wing-tat urged the Administration to review the deployment of ferries so that passengers would not be forced to use fast ferries at higher fares during peak periods. He also expressed concern about the possible chaotic situation on the first day of the changeover when different ferries owned by different operators would be required to berth their ships at almost the same time.

31 AC for T replied that the majority of piers had already been allocated to the operators, and the pier allocation plan had also been examined by the Marine Department. Staff training programmes were being arranged by the respective companies. To cater for any unforeseen emergency situation, the Transport Department would set up an Operation Co-ordination Centre to monitor the implementation of the ferry transition on 1 April 1999.

VI.Motion on the mechanism for approving future ferry fare increase proposals
(LC Paper No. CB(1) 1033/98-99(05) -- Written submission from Hon LAU Chin-Shek)

32 An information note on licensed ferry services prepared by the Administration was tabled at the meeting and circulated to members after the meeting vide LegCo Paper No. CB(1)1062/98-99(01).

33 C for T briefed members on the merits of licensed ferry services as set out in the paper. As compared with franchised ferry services, licensed ferry services were a more flexible mode of operation which enabled both the Administration and operators to respond quickly to changes in the ferry services market due to competition from land transport and changing travelling pattern. He stressed that ferry services were operating under a difficult market environment. Any additional constraints on the fare determination mechanism would deter operators from entering or investing in the ferry services market. This might affect the certainty and future quality of provision of ferry services. Regarding notices issued under Cap. 104 for the purpose of determining maximum fares for licensed ferry service, he advised that the legal adviser to the Administration was of the view that such notices were not subsidiary legislation.

34 The Chairman suggested and members agreed that the mover of the motion should first be invited to speak on the motion, and debate on the question would follow. When no more members wished to speak, the Chairman would invite the Administration to make a response, followed by the reply by the mover. Each member could speak for three minutes, and the mover of the motion could have five minutes. At the end of the debate, the Chairman would put the question on the motion to the Panel for decision.

35 Mr LAU Chin-shek, mover of the motion, pointed out that the Legal Adviser to the Legislative Council had advised that the Legislative Council had the right to determine the fare for licensed ferry service in the form of subsidiary legislation. Mr LAU was therefore of the view that the Administration was deliberately depriving the Council of its inherent power to monitor ferry fares. With the replacement of franchised ferry services by licensed ferry services on 1 April 1999, fares for ordinary class of conventional ferries operating between Central and outlying islands such as Cheung Chau, Mui Wo, Peng Chau and Yung Shue Wan would be revised from $9.2/$9.7 to $10 while the monthly ticket price for Lamma service from $400 to $450. As such, Mr LAU suggested that members should make every effort to retain their rights in scrutinizing fare increase proposals from service providers as currently provided for in the legislation.

36 Mr HO Chun-yan said that in the absence of an independent body to monitor fare increase applications from transport operators, the Legislative Council should take a more active role in monitoring fare increase proposals. He did not consider it acceptable for the Administration to take away the power of the Legislative Council in scrutinizing fare increase proposals from ferry operators without going through a proper legislative process. He was, therefore, in support of the motion.

37 Mr Andrew WONG pointed out that licenced ferry services were simply another form of franchised services as they were free from direct competition from other ferry service providers. To safeguard public interest, the Administration should tender out ferry services at regular intervals with specification on the future mechanism for examining fare increase applications and the minimum service requirements for individual routes, and grant the licence to operators with the lowest bid in terms of fares. Prior to a complete revamp of the system, the Legislative Council should continue to retain some form of control over fare increase proposals of licensed ferry services for the interest of the travelling public. He was, therefore, in support of the motion.

38 Mr CHAN Kam-lam pointed out that whilst Members of the Legislative Council should make every effort to monitor fares of public transport services on behalf of the public, it would not be appropriate for Members of the Council to determine such fares. Having regard to the fact that the current licensing system for ferry operation had been in existence for a long time and had served the market well under the influence of market forces, that ferry services were operating under a difficult market environment, and that substantial investment and a long return period had to be incurred for the provision of ferry services, any additional constraints on the fare determination mechanism would deter operators from entering or investing into the ferry services market and affect the certainty and future quality of provision of ferry services. Furthermore, it would not be practical for Members of the Legislative Council to examine fare adjustment proposals from all licensed ferry services which, as advised by the Administration, was in the region of about 100. He, therefore, did not support the motion moved by Mr LAU. He further suggested that in order to examine fare increase applications from service providers, an independent body should be established to undertake the task. He recalled that the former Secretary for Transport, Mr Gordon SIU, had undertaken to examine such a proposal.

39 Mrs Selina CHOW was of the view that whilst Members of the Legislative Council should make every effort to monitor fares of public transport services on behalf of the public, it would not be appropriate for Members of the Council, being representatives of the general public, to determine such fares as any fare increase proposals might be against the public interest in one sense or another even if they were fully justified. In her view, it would be more appropriate for the Administration to approve fare revisions from licensed ferry operators having regard to all relevant factors including the interests of both operators and commuters. The Administration, in turn, would be held accountable to the legislature for its actions. She, therefore, did not support the motion moved by Mr LAU.

40 Mr Edward HO shared the views expressed by Mr CHAN Kam-lam and Mrs Selina CHOW. He pointed out that the responsibility of the Legislative Council was to monitor the performance of the Government but not to approve fare increase applications from individual operators. Given the importance of waterborne transport, it was necessary to create a better business environment for investment. On the other hand, he believed that the Administration would make an effort to maintain the fares of ferry services at reasonable levels. Where necessary, they should also tender out the services again with a view to maintaining a reliable and efficient service for the public. He, therefore, did not support the motion moved by Mr LAU.

41 Mr Raymond HO was of the view that waterborne transport was essential to residents on outlying islands and pointed out that it was difficult to attract investment from the private sector in the prevailing economic climate. Given that the licensing system for ferry operation had served the market well, it should be allowed to continue. If such services fell below certain standards, members could request the Administration to account for the anomaly and introduce improvement measures. He, therefore, did not support the motion moved by Mr LAU.

42 S for T concluded that the ferry services market had gone through major changes due to competition from land transport and changes in travelling pattern. A franchise system would no longer work as the growing number of loss-making routes could not make a network of services viable. Instead, a licensed arrangement with services divided into several small packages provided both the operators and the Administration the flexibility to respond quickly to market changes. The current fare determination mechanism was best suited to licensed ferry services. Most such services were "kaito" services which served localized communities and might require frequent and quick changes to fares and operational arrangements in response to market forces.

43 In concluding, Mr LAU Chin-shek re-iterated that the Legal Adviser to the Legislative Council was of the view that fare increase proposals from licensed ferry operators should be submitted to the Council for examination in the form of subsidiary legislation. Given that members were at liberty to examine fare increase proposals from individual operators in the form of subsidiary legislation, he did not agree that the large number of applications from operators would overload the Council. If members were prepared to give up their existing right in scrutinizing fare increase proposals from ferry operators, he could not see how they could monitor fares of public transport services on behalf of the public.

44 The Chairman invited members present to indicate their positions on the following motion moved by Mr LAU Chin-shek:

"That this Panel urges the Administration to follow the procedure of subsidiary legislation and table all future notices on the determination and adjustment of fares of licensed ferry services, including new licensed ferry services to be launched on 1 April 1999, for the scrutiny of the Legislative Council in the form of subsidiary legislation." 45 Mr HO Chun-yan, Mr LEE Wing-tat, Mr LEE Kai-ming, Mr Andrew WONG and Mr LAU Chin-shek, voted for, and Mr Edward HO, Dr Raymond HO, Mrs Selina CHOW, Mr CHAN Wing-chan, Mr CHAN Kam-lam, and Dr TANG Siu-tong voted against the motion. The Chairman advised that the majority of members present did not support the motion.

46 Noting that a ferry licence would only be granted for a period not exceeding 10 years, Mr CHAN Kam-lam enquired whether the operator would be forced to cease operation upon 10 years irrespective of whether the services were well accepted by the public. In the light of the substantial investment and long return period for the provision of ferry services, he considered such an arrangement rather inflexible. DC for T advised that under the existing legislation, ferry licences were granted by the Commissioner for Transport for a maximum period of three years, but could be extended for a further period of three years at any one time, with the aggregate continuous period of licence not exceeding 10 years. Upon expiry of the 10 years, a public tender exercise would be required if there was more than one interested party.

47 In response to Mr Andrew WONG, S for T said that under existing legislation, there was no specific provision prohibiting the Commissioner from granting more than one licence for operation along the same route. DC for T added that in view of the nature of licensed ferry services which served localized communities, the demand might not be adequate to support two parallel services by two different operators.

48 In concluding deliberation, the Chairman advised that the Panel had completed the initial examination of the subject on the legal procedures in respect of the determination of the maximum fares for licensed ferry services. She would make a report to the House Committee on behalf of the Panel.

(Post meeting note : The Chairman made a report to the House Committee on 23 April 1999.)

VII. Any other business

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

Legislative Council Secretariat
20 May 1999