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Following is the speech by the Chief Secretary for Administration, Mr Donald Tsang, introducing the Government Minute in the Legislative Council today (October 31):

Madam President,

Laid on the table today is the Government Minute responding to Report No. 36 of the Public Accounts Committee (PAC). The Minute sets out the Administration's position.

The PAC selected for detailed study six of the ten subjects investigated by the Director of Audit in his Value for Money Report No. 36. Of these six selected subjects, the PAC has completed its study on four of them and is pursuing the remaining two. I must record the Administration's appreciation of the efforts made by Members of the PAC in carrying out the task with great thoroughness and dedication. The Administration will continue to co-operate with the PAC fully in this task.

The Honourable Eric Li, Chairman of the PAC, spoke on 4 July when he tabled the PAC's Report. In addition to commenting on each of the four subjects on which the PAC had carried out its study, he also gave his view on access to documents which the PAC wished to examine in considering the Director of Audit's reports. I would like to respond to some of his remarks.

PAC's access to documents relating to the issues in the Director of Audit's reports

I should stress and reassure Members that this Government is one of the most open and transparent administrations in the region. We attach the utmost importance to facilitating the deliberations of the PAC in examining the Director of Audit's Value for Money reports. There is no question whatsoever of the Administration unreasonably withholding documents from the PAC. On the rare occasions when we have expressed difficulty, it is either because we consider disclosure of the documents sought would undermine the fine and important tradition of frank and free exchange of views within the Administration; or because the Administration was constrained by contractual obligations; or because the consent of a third party offering views to the Administration in confidence could not be obtained.

My colleagues are already participating in a constructive dialogue with the PAC on how we can step up co-operation with the PAC. Please be assured that the Administration cherishes the high degree of co-operation with the PAC. We will do our very best to reinforce our level of cooperation.

Provision of slaughtering facilities for supplying fresh meat

The PAC was concerned also at the delay in the privatisation of the Cheung Sha Wan Abattoir. As indicated in my Minute, it is difficult to draw any conclusion on the strategy adopted by the former Urban Services Department at the time, taking into account its concern with the possible disruption of fresh meat supply. However, we agree fully with the recommendation that the Administration should provide the Executive Council and other decision-making bodies with all the important information to enable them to make informed decisions. This has been and will continue to be the practice of the Administration.

Provision of Staff for Departmental Accounting Units

We share PAC Members' view that we need to prepare the accounting units of departments for taking up the new challenges, arising from the Government Financial Management and Information System being developed. In this connection, Controlling Officers are responsible for ensuring that these units in their departments function effectively and properly and they should be adequately staffed. The Treasury, with its professional experience and expertise, always stand ready to assist and advise them. I assure Members again that we take these responsibilities seriously. We accept the Committee's recommendations and will act accordingly.

Government's efforts to promote e-business in Hong Kong

The Administration is fully committed to promoting the development of e-business in Hong Kong through providing a favourable environment and the necessary infrastructure. We also lead by example. Under our E-government strategy, we have established clear targets and set up a dedicated E-government Co-ordination Office to ensure effective planning, implementation and co-ordination. We are moving full steam ahead and have made significant progress.

Members of the PAC were concerned about the significant variance between the estimated and actual number of digital certificates issued by Hongkong Post. I would like to assure and stress that the establishment of the public key infrastructure (PKI) and the provision of the public certification authority service by Hongkong Post are part of the initiative to promote the development of e-business in Hong Kong. The Government needs to play a leading role to kick-start the development. And I would like to take this opportunity to urge on Members of this Council, including Mr Eric Li, to take out one of these keys and start such a movement in Hong Kong with Hongkong Post. I myself and many of my senior colleagues have already subscribed to the service. It takes time to build up customer confidence in new PKI applications and the Postmaster General has been making vigorous efforts to promote wider use of digital certificates. As recommended by the PAC, the Hongkong Post Certification Authority has taken steps to control the size of its operation, having regard to market demand. The Postmaster General will continue to monitor closely the usage of digital certificates and liaise with certification authorities abroad to establish cross-certification arrangements for facilitating cross-border e-business.

The Administration will review in late 2002 the strategy for funding the Hongkong Post Certification Authority service. The review will take into account such factors as the readiness of the community in adopting digital certificates, the maturity of applications using digital certificates in the market and the general development of the certification authority market in Hong Kong.

Management of Public Housing Construction

I now wish to turn to the subject of management of public housing construction.

The Housing Department will continue to carry out the public housing development programme efficiently and effectively to provide housing to eligible households. It has made good progress in implementing the quality reform package. For example, it has strengthened on-site supervision by deploying resident engineers to all piling sites and assigning resident professionals to more complex building projects. It has imposed restrictions on subcontracting piling works, introduced more vigorous performance evaluation of consultants and contractors as well as implemented quality-based procurement procedure.

The PAC expressed concerns in several areas in the management of public housing construction. We have responded in some detail in the Government Minute presented to Members today. I wish to highlight two points only.

First, the PAC was concerned about the establishment of a premier league of contractors. The Housing Authority advises this is one of the initiatives under the "Qualify Housing Reform" package, and is intended to foster a strategic partnership with the best contractors for innovative methods of improving the quality, efficiency and productivity of public housing construction. The Housing Authority considers the new arrangement to be fair, competitive and suitable for some of its more complex and specialised construction projects. The Authority has no intention to limit the number of premier league contractors, and indeed contractors meeting the qualifying criteria are eligible to join the league.

Second, the PAC urged me to finalise and announce the recommendations of the Committee on the Review of the Institutional Framework for Public Housing on the initiative to place Housing Authority's buildings under the purview of the Buildings Ordinance. This is indeed a very complex issue, which I am sure the Select Committee of LegCo has already begun to appreciate that. It is a complex issue, with political, legal, administrative, staffing and resource implications. I can assure Members that the Administration is working hard to take this matter forward. As an interim measure, the Director of Housing has, since November 2000, set up an Independent Checking Unit reporting directly to him. The Unit will carry out third-party inspections on the building quality of public housing projects with support from the Buildings Department.

Madam President, the Administration is grateful for the constructive comments and sound advice from the PAC. We will continue to co-operate fully with the PAC. This partnership between the PAC and the Administration will help the public service of the Hong Kong Special Administrative Region to maintain a high standard of efficiency, transparency and accountability.

End/Wednesday, October 31, 2001

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