********************************************************

The following is the speech by the Chief Secretary for Administration, Mrs Anson Chan, today (May 10) introducing the Government Minute in response to the Report No.33 of the Public Accounts Committee in the Legislative Council:

Madam President,

Laid on the table today is the Government Minute responding to Report No. 33 of the Public Accounts Committee (PAC). This Minute sets out the measures the Government has taken on the conclusions and recommendations contained in the Report.

The Committee has selected for detailed study seven of the twelve subjects investigated by the Director of Audit in his Value For Money Report No.33. The Committee's conclusions and recommendations on four of them are contained in the PAC's Report No. 33. The PAC also completed its deliberations and published its conclusions and recommendations on the remaining three subjects in its Report No. 33B tabled in this Council on 12 April. The Administration will respond separately on the latter report before this Council rises in July. For the other five subjects not selected for detailed study by the PAC, the relevant bureaux and departments will follow up the Director of Audit's recommendations and make regular progress reports. Through this reporting system, every recommendation to improve the use of public resources brought to the Administration's attention will be vigorously pursued.

The Honourable Eric Li, Chairman of the PAC, spoke in this Council on 16 February when tabling the Committee's Report No. 33. He commented at some length on each of the four subjects. I would like to respond to them in turn.

The Government's administration of sale of land by tender

The Administration attaches great importance to improving the administration of sale of land by tender. To prevent losses arising from default by successful tenderers for Private Sector Participation Scheme (PSPS) projects, the Lands Department has amended the relevant standard Tender Notice. The successful tenderer must now submit a bank guarantee or a written parent or associated company guarantee to the Lands Department within 14 days from the award of the tender. The Director of Lands has issued internal instructions to remind his staff to strictly enforce the Tender Notice requirements.

The Department has also responded positively to the suggestion of the PAC that the relevant parties should be consulted on the need to impose additional requirements in all land sale tenders. These may take the form of requiring prospective tenderers to provide evidence of their ability to discharge obligations under the Conditions of Sale and successful bidders to procure a bank, parent or associated company guarantee. The Lands Department is conducting the necessary consultation which will last until the end of this month.

Land is a valuable asset in Hong Kong and an important source of Government revenue. We will draw on the experience from the land sale cases examined in the PAC's Report No. 33 and take into account the outcome of consultations to improve continuously the land sale procedures.

Administration of allowances in the civil service

We welcome the PAC's useful comments on the administration of allowances in the civil service. These are most timely as the Administration is embarking on reviews of our fringe benefits and job-related allowances under the Civil Service Reform. In all our endeavours, I believe the Administration and the PAC share a common goal, and that is, payment of various allowances and benefits with public funds must always be justified.

We have detailed in the Government Minute the action taken in respect of individual allowances examined by the PAC. I do not wish to dwell on those, except to make a few general points.

First, we acknowledge the need to review and update regularly allowances both as part of the fringe benefits and on job related cases to ensure that they remain appropriate in the light of changing circumstances. However, in so doing, we have to recognise that fringe benefits are provided to officers as part of their conditions of service. We believe that as a responsible employer, we should not alter such benefits unilaterally. Where practicable, we do offer the changes to serving officers as an option. Our policy has so far contributed to the morale and stability of the civil service. Nevertheless, we will continue to consider carefully whether this "non-deprivation of existing benefits" rule should be applied in each case.

Secondly, we have always followed established procedures in consulting staff on any proposed changes to fringe benefits and allowances, with a high level of transparency. We have to ensure that in finalising our policy changes, we are striking the right balance between the legitimate interests of the staff side and public interest. I am pleased to note that Members generally support the approach we have adopted and acknowledge the importance of staff consultation in abolishing outmoded allowances. We will continue with this long-standing practice. Like PAC Members, I am hopeful that the staff side will act reasonably and positively towards the Administration's proposals.

Thirdly, the review of existing benefits and allowances could not be driven solely by cost savings. To safeguard the quality of public service, the Administration has a duty to ensure that the revised benefits are more akin to private sector practice and at the same time are attractive enough to recruit and maintain officers of suitable calibre in the civil service.

Much work lies ahead in reforming the civil service to meet new challenges. We will keep this Council informed of the progress.

Management of on-street parking spaces and parking facilities

The Administration's policy on management of on-street parking spaces and parking facilities is clear. The eventual aim is to extend metering to all on-street parking spaces in urban areas and New Towns. The Transport Department has been installing parking meters in urban areas and New Towns under a five-year rolling programme. It is planning to install some 3,300 new parking meters in the coming three years and to extend another 3,000 existing meters to operate on Sundays and public holidays this year. In the process it will take into account the views of the local community.

New technologies have opened up possibilities in the transport field. The Transport Department has since March been conducting trials to extend the e-park system to smart cards. It is also conducting trials and will continue to search for new technologies to address the operational and enforcement problems of charging on-street motorcycle parking spaces.

The Administration is pleased to note that the PAC supports in principle the park-and-ride facilities. We have carefully reviewed the trial scheme at Sheung Shui. It has met the traffic management objective of reducing the number of car trips and parking demand in the urban areas. We have therefore included the provision of such facilities as a planning parameter in new railway projects. KCRC has submitted proposals to incorporate park-and-ride facilities in five stations along the West Rail and the Ma On Shan Rail. It is worth noting that the proposed park-and-ride facilities will not affect the development potential of the station sites.

The Administration is committed to improving the management of on-street parking spaces and parking facilities. We will continue to explore ways to enhance the efficiency of our management of parking facilities using the latest technology and learning from the best practices overseas.

The use of energy-efficient air-conditioning systems in Hong Kong

As regards the use of more energy efficient air-conditioning systems, we are taking active steps to promote and facilitate the wider use of water-cooled air conditioning systems (WCAS) in Hong Kong, both on a short-term and a long-term basis. We will also step up monitoring of the operation and maintenance of existing cooling towers to ensure public safety.

In order to proceed with full-scale implementation of WCAS in Hong Kong, we need to address carefully a number of concerns and constraints. For example, we need to examine in detail the environmental, regulatory, financial, infrastructural, land administration and Legionnaires' Disease issues. We also need to formulate a master development plan for a phased implementation of WCAS in Hong Kong and to establish the necessary controls to safeguard public health. We shall deal with these according to a timetable as detailed in the Government Minute. We shall of course keep Members informed of our progress.

I wish to express our sincere thanks to the Chairman and Members of PAC for their valuable work and sound advice. The Administration will continue to work in partnership with the PAC in a positive and constructive spirit.

Thank you, Madam President.

End/Wednesday, May 10, 2000

NNNN