Legislative Council

LC Paper No. CB(1) 768/98-99
(These minutes have been seen by the Administration)

Ref: CB1/PL/TP

LegCo Panel on Transport

Minutes of meeting held on Friday, 27 November 1998, at 10:45 am in the Chamber of the Legislative Council Building

Members present :

Hon Mrs Miriam LAU Kin-yee, JP (Chairman)
Hon LAU Kong-wah (Deputy Chairman)
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
Hon Andrew CHENG Kar-foo
Hon FUNG Chi-kin
Dr Hon TANG Siu-tong, JP

Members absent :

Hon Edward HO Sing-tin, JP
Hon TAM Yiu-chung, JP

Public officers attending:

Item IV

Mr Robert FOOTMAN

Commissioner for Transport

Mr Alex FONG

Deputy Secretary for Transport

Mr Alan CHOW

Principal Assistant Secretary for Transport

Mr A S Y LUI

Assistant Commissioner for Transport

Item V

Mr Kevin HO

Secretary for Transport (Atg.)

Mr Robert FOOTMAN

Commissioner for Transport

Ms Linda LAI

Deputy Secretary for Transport

Mr Brian LO

Principal Assistant Secretary for Transport

Mrs Dorothy CHAN

Deputy Commissioner for Transport

Mrs Judy LI

Assistant Commissioner for Transport

Mr Benedict LAI

Deputy Law Officer (Civil Law)

Mrs Alison CABRELLI

Principal Government Counsel

Item VI

Mr Kevin HO

Secretary for Transport (Atg.)

Mr Robert FOOTMAN

Commissioner for Transport

Mr Alex FONG

Deputy Secretary for Transport

Mr Roy TANG

Principal Assistant Secretary for Transport

Mr S M LI

Assistant Commissioner for Transport

Clerk in attendance :

Mr Andy LAU,

Chief Assistant Secretary (1)6

Staff in attendance :

Miss Connie FUNG,

Assistant Legal Adviser 3

Mr Daniel HUI,

Senior Assistant Secretary (1)5

I Confirmation of minutes and matters arising
(LC Paper No. CB(1)491/98-99 - Minutes of the meeting held on 14 October 1998)

The minutes of the meeting held on 14 October 1998 were confirmed.

II Information papers issued since last meeting

(LC Paper No.CB(1)438/98-99	-	Route 9 between Tsing Yi and Cheung Sha Wan
LC Paper No. CB(1)488/98-99	-	"Meet-the-Passenger" issued by the Hong Kong & Yaumati Ferry Co. Ltd. (HYF)
LC Paper No. CB(1)507/98-99	-	Annual Report of the Transport Complaints Unit 1997/98
LC Paper No. CB(1)509/98-99	-	Policy Issues on Road Planning
LC Paper No. CB(1)515/98-99	-	Brochure on "North Island Line and East Kowloon Line"
LC Paper No. CB(1)518/98-99	-	Statutory provisions on toll, fare and fees variations in respect of public transport and tunnels)

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

III Items for discussion at the next meeting scheduled for 18 December 1998
(LC Paper No. CB(1)511/98-99(01) - List of outstanding items for discussion)

3. Members agreed to discuss the following items at the meeting scheduled for 18 December 1998:

1. Probationary driving licence scheme; and
   
   
2. Development of the Mass Transit Railway (MTR) Tseung Kwan O Extension, North Island Line and East Kowloon Line. (Post meeting note : The Administration had subsequently requested deferral of the discussion on the part relating to the development of MTR North Island Line and East Kowloon Line, pending completion of the interim report on the Second Railway Development Study. With the concurrence of the Chairman, the agenda for the meeting was thus revised.)
   
   4. Members agreed to include the subject "Policy issues on road planning" on the list of outstanding items for discussion.
   
   IV Expiry of Cross Harbour Tunnel's franchise
   (Legislative Council Brief (Ref: TB CR1/4651/88) dated 20 October 1998)
   
   5. A written submission from the Hong Kong Tollways Employees Association Organizing Committee was tabled at the meeting.
   
   (Post-meeting note: The submission was circulated to members after the meeting vide LC Paper No. CB(1)542/98-99(01).)
   
   6. Members expressed grave concern about the proposal to tender out the management, operation and maintenance (MOM) contract of the Cross Harbour Tunnel (CHT) upon the expiry of its present franchise, in particular the resulting impacts on existing employees of the Cross-Harbour Tunnel Company Limited (the Company). Mr LAU Chin-shek requested incorporation of suitable provisions by the Administration in the tender document requiring bidders of the MOM contract to take over all existing CHT employees to undertake the same job types on the same employment terms as currently offered by the Company. Mr CHAN Wing-chan and Mr CHAN Kam-lam also opined that it would be undesirable for CHT employees to have to worry about their job security whenever there was a change of MOM contractor for CHT. Mr LEE Kai-ming added that human resources was an important asset of the Company and should be given due care in the course of the transition.
   
   7.The Principal Assistant Secretary for Transport (PAS(T)) advised that in line with the established Government policy in handling transfer of bus and ferry franchises, the terms of the MOM contract for CHT would also specify a need for the contractor to fill any recruitment opportunities by first employing existing CHT employees at market rates. Furthermore, in the light of experience from the taking over of the management and operation of the Aberdeen Tunnel, the Administration would give certain weight to the quality of proposals put forth by tenderers for managing CHT to ensure a smooth transition. However, in order to ensure the cost effectiveness of the contractor in managing the CHT, it would be inappropriate for the Administration to require the contractor to take over all existing CHT employees at existing terms of employment. Notwithstanding the above, PAS(T) undertook to convey members' views on the need to impose a pre-condition on the tender document requiring bidders of the contract to take over all existing CHT employees on their current terms of employment to the Central Tender Board for consideration.
   
   8. Mr Andrew CHENG Kar-foo opined that the terms of the tender document, as proposed, might give rise to a situation whereby existing employees of CHT might be forced to accept a lower salary in order to safeguard their employment with the new contractor. He suggested that the Panel should vote on a resolution urging the Administration to require the successful tenderer to make a first offer of employment to all existing employees of CHT to undertake the same job types on the same employment terms as currently offered by the Company. After deliberation, the Chairman suggested and members agreed that since the Panel had already reached a consensus that in awarding a MOM contract for CHT, the Administration should aim at minimizing any adverse effect on the employment, ranking and remuneration of existing staff of the Company, the resolution proposed by Mr CHENG would not be necessary. The Chairman requested the Administration to take note of the consensus of the Panel and reflect members' view to the Central Tender Board in assessing the tenders.
   
   9. Mr CHAN Kam-lam enquired whether the duration of the MOM contract could be extended to five years instead of three years as currently proposed. He was also concerned whether the Administration had any long term plan on the management and operation of the CHT. The Deputy Secretary for Transport (DS for T) responded that the Administration was examining the overall demand for cross-harbour traffic under the Third Comprehensive Transport Study (CTS-3) which would provide input for formulating a long term plan for the management and operation of the CHT. The award of a two-year fixed, one-year optional MOM contract for CHT was an interim solution to avoid prejudicing any options for the fourth road harbour crossing. 10. Referring to paragraphs 8 to 10 of the information paper provided by the Administration, Mr CHAN Kam-lam was concerned about the problem of uneven distribution of traffic among the existing three cross harbour tunnels. He enquired whether the Administration had formulated any plan to solve the problem. In response, DS for T reiterated that CTS-3 would examine the overall demand for cross-harbour traffic and the necessary facilities to meet the demand, having regard to forecast population growth and distribution in different parts of Hong Kong. The Administration would take into account the findings in CTS-3 before deciding on a fourth road harbour crossing. As regards measures to address the uneven traffic flow among existing cross harbour tunnels, he confirmed that the Administration was still considering the toll equalization option as suggested by the Chairman.
   
   11. In reply to enquiries, PAS(T) advised that when CHT became a Government tunnel after 31 August 1999, the tolls of CHT would be subject to negative vetting by the Legislative Council as in the case of other Government tunnels. As regards the legislative amendments as detailed in paragraph 15 of the information paper provided by the Administration, PAS(T) confirmed that such amendments were necessary in order to provide a legislative framework for the Administration to take over the assets of CHT Company and enable the levying of passage tax on the use of the CHT after the expiry of the franchise.
   
   12. At the request of members, the Administration agreed to brief members on the response of the Central Tender Board to members' request and on the arrangement for taking over existing staff of CHT Company by the new contractor after the MOM contract had been awarded.
   
   V Progress of tendering out HYF's franchised services (including the mechanism in approving future ferry fare increase proposals)
   
   

   (LC Paper No. CB(1)511/98-99(02)	-	Information paper provided by the Administration
   LC Paper No. LS 54/98-99	-	Information paper on legal procedures for fare adjustment of licensed ferry service provided by Legal Service Division
   LC Paper No. CB(1)511/98-99(03)	-	Correspondence between the Legal Adviser and the Administration on legal procedures for fare adjustment of licensed ferry service
   LC Paper No. CB(1)538/98-99(01)	-	Information paper provided by HYF)

   
   
   13. At the invitation of the Chairman, the Deputy Law Officer (Civil Law) (DLO(CL)) briefed members on the legal procedures in respect of the determination of maximum fares for licensed services. He advised that under Section 33(1) of the Ferry Services Ordinance (Cap. 104), the Commissioner for Transport might by notice in the gazette determine the maximum fares that might be charged for the carriage of passengers, baggage, goods and vehicles on any licensed ferry service. The issue under consideration was to determine whether these notices were "subsidiary legislation", and hence subject to scrutiny by the Legislative Council. In this regard, he advised that "subsidiary legislation" was defined by section 3(1) of the Interpretation and General Clauses Ordinance (Cap. 1) as being any proclamation, rule, regulation, order, resolution, notice, rule of court, by-law or other instrument made under or by virtue of any Ordinance and having legislative effect. As the notices were made under Cap. 104, the crux of the matter was whether the Commissioner's determination of maximum fares for licensed ferry services had a legislative effect. If they had such an effect, the notices were subsidiary a legislation as defined.
   
   14. In continuing, DLO(CL) explained that "legislative effect" was not defined in the laws of Hong Kong nor was there any local case law on its meaning. Based on case references in other common law jurisdictions, the following factors were relevant in determining whether an instrument had legislative effect:
   1. there was an express provision identifying the instrument as being subsidiary legislation;
      
      
   2. the instrument extended or amended existing legislation;
      
      
   3. the instrument had general application to the public or a class, or to a significant section of the public as opposed to individuals;
      
      
   4. the instrument formulated a general rule of conduct without reference to particular cases operating in the future; and
      
      
   5. the legislative intent that the instrument was subsidiary legislation.
   15. DLO(CL) advised that applying the above criteria to the gazette notices issued under section 33(1) of Cap. 104, the Administration was of the view that the notices did not have any legislative effect because:
   1. there was no express provision in the Ordinance identifying the Commissioner's determinations of maximum fares for licensed services as being subsidiary legislation;
      
      
   2. the determination did not amend or extend the Ordinance;
      
      
   3. the determinations made by the Commissioner bound the licensees in that they could not charge a fare exceeding the maximum determined by the Commissioner. It applied only to individuals, i.e. the ferry licensees, and did not have general application to the public or to a significant sector of the public;
      
      
   4. the determinations did not formulate a general rule of conduct as only the licensees were subject to them; and
      
      
   5. taking into account the history leading to the passage of the Ferry Services Bill in 1982, it was clear that the legislative intent was to empower the Commissioner for Transport to determine maximum fare for licensed services by non legislative means. Since then, determinations of maximum fares for licensed ferry services had been effected as executive acts.
   The Administration therefore considered that notices under section 33(1) of Cap. 104 were not subsidiary legislation.
   
   16. Referring to the LegCo Secretariat Legal Adviser's views that notices under section 33(1) of Cap. 104 were subsidiary legislation, DLO(CL) raised the following two points:
   1. The fact that those orders made by the Chief Executive in Council under section 19(1) of Cap. 104 had been treated as having legislative effect did not necessarily mean that notices under section 33(1) had such effect. In fact, different practices had existed in the determination of maximum fares for franchised ferry services and licensed ferry services. While the former had been published in the form of subsidiary legislation, the latter was implemented as executive acts. Similarly, the regulatory framework for franchised ferry service and licensed ferry service was different in that the former was required to provide a five-year forward plan to the Government, and the Chief Executive in Council might impose financial penalty on the franchisee for failure to comply with any requirement under the franchise. It appeared logical that the legal requirements in determining maximum fares were different for the two types of ferry services.
      
      
   2. Whilst a notice made under section 33(1) of Cap. 104 in respect of the determination of maximum fares for licensed services might affect directly or indirectly the interests of the general public, and the staff and the shareholders of companies, it would have no binding effect on them.
   17. The Chairman invited Assistant Legal Adviser 3 (ALA3) to elaborate on her analysis on the issue. ALA3 said that the fact that the Administration had not treated notices under section 33(1) of Cap. 104 as subsidiary legislation should not be the only basis for determining whether such notices had legislative effect. She advised that whether a notice made under section 33(1) of Cap. 104 had legislative effect might also depend on the true construction of the Ordinance. Under section 28(2)(b) of Cap. 104, a ferry service licence granted by the Commissioner should be subject to such conditions as the Commissioner might specify. Such conditions would appear to be wide enough to include the maximum fares chargeable on a licensed service. If the legislature had intended that the determination of the maximum fares chargeable on a licensed service was purely administrative in nature, it would not have been necessary to include a separate section in the Ordinance [section 33(1)], which made express provision for determination of fares by notice in the Gazette.
   
   18. ALA3 further advised that the corresponding section [section 6(3)(b)] in Cap. 104 relating to conditions governing a franchise was worded in similar terms as section 28(2)(b); no reference was made in section 6(3)(b) on the maximum fares chargeable as one of the conditions. However, section 19(1) provided that the Chief Executive in Council might by order determine the maximum fares chargeable on a franchised service. Such order had been published in the form of subsidiary legislation and laid before the Legislative Council in accordance with section 34 of Cap. 1. It could, therefore, be argued that the purpose of having a separate provision for determining the maximum fares chargeable on a franchised service or a licensed service was possibly to highlight the fact that fares were not purely a matter subject only to administrative decision. Furthermore, had the legislature intended that the determination of the maximum fares chargeable on a licensed service was purely administrative in nature, it would not have been necessary for the Administration to impose criminal liability on licensees in cases where they charged fares in excess of the maximum fares permissible. Following from the above analysis, if it was accepted that an order made under section 19(1) of Cap. 104 had legislative effect and given the similarity in the effect of such order and a notice under section 33(1) of the same Ordinance, there appeared no logical reason why the latter should not have legislative effect.
   
   19. Referring to DLO(CL)'s points that a gazette notice would have legislative effect only if it had a direct binding effect on a class of people, ALA3 advised that based on cases in some common law jurisdictions, an instrument might be considered as having legislative effect if it had the direct or indirect effect of affecting a privilege or interest of persons generally or of a class of people. She opined that a notice which determined the maximum fares chargeable by a licensed ferry operator would have the indirect, if not direct, effect of affecting the interest of the travelling public.
   
   20. Mr LAU Chin-shek said that if the Commissioner's notice under section 33(1) of Cap. 104 was only binding on the licensee of a ferry service, a ferry passenger might pay any amount of fares as he deemed fit to the ferry service operator. DLO(CL) responded that a passenger using a ferry service entered into a contract with the ferry operator and the passenger was obliged to pay the fares as required and published by the operator. The fares charged by the operator could not exceed the maximum fares as determined by the Commissioner. However, the passenger's failure to pay the fare was a breach of contract condition between the passenger and the operator and any dispute arising therefrom would be a civil case between the two parties.
   
   21. Mr Albert HO Chun-yan opined that notices under section 33(1) of Cap. 104 could be viewed as an authorization given by the Administration to the operator of a licensed ferry service in levying the fares and such an authorization would have binding effect not only on the licensee of the ferry service, but on the travelling public as well.
   
   22. Referring to the Legal Service Division Report (Paper No. LS 54/98-99), the Chairman was concerned whether the net would have been cast too wide by adopting the view in paragraph 11(b) of the Report that a gazette notice would have legislative effect if it affected the interests of the members of the public. ALA3 explained that the analysis was made having regard to cases in the Commonwealth jurisdictions and the opinions of judges. She supplemented that in determining whether an instrument had legislative effect, there might also be a need to review the legislative intent of the provision. For example, she would not consider it appropriate to treat notices issued under section 43 of Cap. 104 in respect of the publication of all franchised services and licensed services in the Gazette as a form of subsidiary legislation. However, section 33(1) touched on a grey area and could give rise to a different effect.
   
   23. At the request of the Chairman, DLO(CL) and ALA3 undertook to exchange the cases which they were referring to and to see if they could agree on a common view on the matter. Mr LAU Chin-shek remarked that he would examine the case for a judicial review on whether notices under section 33(1) were subsidiary legislation.
   
   24. Referring to paragraph 16 of the Legal Service Division's Report, the Chairman enquired about the legal status of a statutory instrument which had not been laid before the Legislative Council. ALA3 replied that in the absence of a clear court judgment on this issue, it remained uncertain as to whether notices governed by the "negative procedure" would be rendered legally invalid if it had not been laid before the Legislative Council. As requested by the Chairman, ALA3 would conduct further research on relevant authorities and possible actions that could be taken if notices which should be subject to negative vetting were not laid before the Legislative Council.
   
   25. Some members queried the basis of granting a three-year licence, as opposed to a franchise agreement. The Deputy Commissioner for Transport (DC for T) said in reply that the Administration had found that there was a major change in the pattern of ferry patronage in the last 20 years. Ferry passengers currently constituted about 2% of the travelling public as compared to about 10% 20 years ago. Under the circumstances, the Administration saw merits to tender out ferry services as licensed ferry services so that more ferry operators could put up competitive bids for provision of ferry services on a route instead of network basis under different scale and mode of operation which would be beneficial to the travelling public. Moreover, a franchise might not provide enough incentives to ferry operators because of the need to maintain a large service network involving major long term investments. She supplemented that a ferry service licence with a duration of three years would provide flexibility to both the operator and the Government. She illustrated by way of an example that a licensed ferry operator could react more swiftly than a franchise operator if the patronage in a particular route decreased substantially due to the availability of an alternative transport mode such as bus service.
   
   26. On the difference between franchised ferry services and licensed ferry services, DC for T advised that a franchise would normally be granted for a longer period, for example, 10-15 years in previous occasions. A franchisee would normally be granted an exclusive right in operating a large service network and be required to provide five-year forward plan for the Administration's consideration. On the other hand, a licensee of ferry service was usually given the right to provide ferry services between specified locations for a shorter licensed period such as three years. The licensees would be required to provide one to two years' service plan for the Administration's consideration.
   
   27. Noting the Administration's response, Mr LEE Wing-tat was not convinced that there was a need to tender out the franchised ferry services as licensed services. He enquired whether there was any precedent in which the validity of a franchise was granted for less than three years. DC for T replied that the franchises for HYF and Star Ferry had a duration of 10 to 15 years while the last franchise granted to a bus company covered a period of five years. She cautioned, however, that it would be inappropriate to compare the duration of franchises in different transport modes because of the different requirements in terms of investments in land, equipment and manpower resources. She supplemented that the Administration's decision to tender out HYF's ferry services was in response to market demand for more competition and flexibility in the provision of ferry services with a view to enhancing the quality of ferry services. Furthermore, greater flexibility was possible in the development of licensed ferry services to meet rapidly changing demands.
   
   28. Mr CHAN Kam-lam opined that when the subject of franchised ferry service was discussed at a Legislative Council meeting, members had generally supported the policy to introduce more competition into the ferry service sector. He had no objection to replace franchised ferry service with licensed ferry service. Since the licences covered a relatively short period of three years, it was acceptable for the maximum fares chargeable by the licensed operators to be determined by the Commissioner for Transport. He suggested that future licences for ferry service should cover five years and that fare adjustment proposals from the licensees should be scrutinized by a committee tasked with the responsibility to examine fare increase proposals from all public transport services operators. The Administration noted Mr CHAN's comments.
   
   29. Mr LAU Chin-shek enquired about the mechanism for monitoring the performance of licensed ferry service operators. DC for T advised that Transport Department (TD), Legislative Council, Provisional District Boards and the travelling public would all play a part in monitoring the quality of services provided by licensed ferry operators. Citizens could lodge complaints through various channels should they meet with any sub-standard services and TD would follow-up on these complaints. She further advised that the Director of Marine was responsible for monitoring the safety aspect of vessels to be used by licensed operators. Regarding the current tendering exercise, the Islands Provisional District Board had been consulted in drawing up the service requirements and had been briefed by the two operators after the licences were issued. A working group comprising representatives of the TD, HYF and Hong Kong and Kowloon Ferry Ltd. had been set up to ensure a smooth transition on 1 April 1999.
   
   30. In reply to a member's question, DC for T confirmed that the tendering exercise had provided opportunities for more ferry operators to offer their services as evidenced from the fact that a total of 10 bids from six companies had been received for the three packages of outlying island services. As regards the tendering exercise for inner harbour and new town services, eight bids from six companies were received.
   
   31. Dr Raymond HO Chung-tai enquired whether the Transport Advisory Committee and the Panel would be consulted if there were subsequent changes in routing and fare scale of the licensed ferry services. DC for T replied that to maximize flexibility in provision of quality ferry services, the proposed changes would be implemented after consulting the relevant Provisional District Boards. As regards structural maintenance of piers, DC for T confirmed that all expenses related to structural maintenance of piers were now borne by the Government.
   
   VI Control on the use of mobile phone while driving
   (LC Paper No. CB(1)511/98-99(04) - information paper provided by the Administration)
   
   32. Members generally supported a proposal to legislate against the use of hand-held mobile phone while driving but considered that the use of hands-free mobile phone while driving should be allowed. As regards hands-free kits for mobile phones, some members enquired whether cheaper alternative products, as opposed to those mentioned in paragraph 21 of the information paper, would be acceptable. In response, the Assistant Commissioner for Transport (AC for T) confirmed that cheaper hands-free kits for mobile phones would also be acceptable.
   
   33. Referring to a telephone survey conducted by the Democratic Alliance for Betterment of Hong Kong on control on the use of mobile phone while driving, Mr LAU Kong-wah said that a majority of respondents considered that using a hand-held mobile phone while driving was dangerous and supported legislative proposal to regulate the use of hand-held mobile phone while driving. He stressed that given Hong Kong's congested traffic condition, there was a real need to enact legislation to control the situation even though many overseas countries had not yet done so. DS for T replied that the Administration was in the process of consulting interested parties including the Transport Advisory Committee, the Panel and the trade, and would review the case for legislative control in the light of the views gathered. If a decision was taken for legislative control, legislative proposal would be introduced into the Legislative Council during the current session.
   
   34. On future enforcement actions, AC for T advised that the Police would be responsible for enforcement actions. If a driver was seen using a hand-held mobile phone while driving, he could be prosecuted.
   
   35. Noting that the Administration was reviewing the legislation on dangerous driving, Mr Andrew CHENG Kar-foo enquired whether the proposed amendments to the dangerous driving legislation would address the control of use of mobile phone while driving. DS for T replied that the review on the legislation on dangerous driving had not yet been completed. He agreed that in drafting amendments to the legislation on dangerous driving, the Administration should take into account any legislation on control of use of hand-held mobile phone while driving to ensure that there would be no parallel legislation.
   
   36. Mr CHAN Kam-lam opined that the use of hand-held mobile radio by drivers of commercial vehicles could be a safety hazard and enquired whether the Administration would require that only hands-free mobile radios could be used while driving. AC for T replied that the Administration would consult the trade which used mobile radios to see if they could comply with the "hands free" requirement before deciding on the case for legislative control on hand-held mobile radios. In this regard, the Chairman stressed that consultation with the relevant trade was necessary as there were operational needs for drivers of commercial vehicles to use mobile radios. At her request, the Administration agreed to provide for members' information a list of trade organizations which would be consulted on the control on the use of hand-held mobile radio while driving.
   
   VII Any other business
   
   37. There being no other business, the meeting ended at 1:00 pm.
   
   Legislative Council Secretariat
   20 January 1999