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    Following is a question by the Hon David Li and a written reply by the Secretary for Commerce, Industry and Technology, Mr John Tsang, in the Legislative Council today (July 6):

Question:

    In reply to my question at the Council meeting on June 2, 2004, the Secretary for Commerce, Industry and Technology said that, as at May 15, 2004, 310 000 smart identity cards with the digital certificate (e-Certs) embedded had been issued. In reply to another question on May 25, 2005, he had advised that the Government would strengthen its promotion efforts to encourage the business community and the general public to use and adopt the e-Certs. In this connection, will the Government inform this Council:

(a) among the aforesaid 310 000 holders of smart identity cards embedded with e-Certs, of the number of those who paid the prescribed fee of $50 to renew the e-Certs upon expiry of the one-year free period;

(b) whether the strengthening of its promotion efforts will incur additional expenditure and manpower resources; if so, of the details;

(c) of the projected and actual up-to-date acquisition cost per paid e-cert subscriber incurred by the Hongkong Post of e-Certs under the smart identity card replacement exercise; and

(d)  whether it has conducted regular reviews on the competitive edge, as far as identity authentication is concerned, of the embedded e-Certs over other new and competing technologies and commercial applications; if so, of the results of such reviews; if not, the reasons for that?

Reply:

Madam President,

    My reply to Hon David Li's question is as follows:

(a) Following the launch of the e-Cert embedded in smart identity card programme in June 2003, a critical mass of e-Cert holders is being created, and more e-business applications that make use of e-Certs have been or are being developed. To enable more e-Cert holders to benefit from the new e-business applications and services, in particular the use of e-Cert for two-factor authentication in e-banking, we decided in June 2004 to extend the period of free use of e-Certs embedded in smart identity cards for a second year. Those who benefited from this offer include the 310,000 holders of e-Certs in smart identity cards issued between June 23, 2003 and May 15, 2004. Subsequently, we decided to launch a new promotion programme in June 2005 to promote the use of e-Certs in e-banking and other e-commerce applications. To enable all existing holders of e-Certs in smart identity cards to benefit from this promotion programme, we decided to further extend the period of free use of their e-Certs up to March 31, 2006. In other words, the need for the 310,000 e-Cert holders referred to in the question to pay the $50 fee to renew the e-Certs embedded in their smart identity cards will not arise until the end of the free use period on March 31, 2006.

(b) The new e-Cert usage promotion programme, launched in June 2005, is estimated to cost about $10 million. The expenditure covers mainly the purchase of smart card readers and cash coupons, which will be offered to e-Cert holders as incentives to encourage them to use their e-Certs in e-banking and other e-commerce applications. The Hong Kong Post Certification Authority (HKPCA) will not recruit additional staff to implement the programme.  

(c) Since the period of free use of e-Certs embedded in smart identity cards has been extended to March 2006, there are at present no fee-paying holders of e-Certs embedded in smart identity cards. It is thus not possible to calculate the acquisition cost per fee-paying e-Cert subscriber incurred by the HKPCA under the smart identity card replacement exercise at this stage. For Members' reference, we have spent a total of about $64 million so far on the e-Cert embedded in smart identity card programme (including the costs of system upgrading, establishment of user interface, promotional activities and operation of service counters in smart identity card centers); and 944,000 e-Certs have been issued under this programme as at May 31, 2005. As the above-mentioned expenditure is largely fixed cost, the acquisition cost per fee-paying e-Cert holder under the smart identity card replacement programme will to a large extent depend on the number of smart identity card holders renewing their e-Certs upon expiry of the free use period in March 2006.

(d) The Government has been closely monitoring the industry and technological developments in respect of identity management and electronic authentication. While other authentication applications are available in the market, the public key technology deployed in the production and use of digital certificates remains the most mature technology available that can address all the security issues concerning authentication, confidentiality, integrity and non-repudiation. We will continue to monitor the developments on this front.

Ends/Wednesday, July 6, 2005
Issued at HKT 14:39

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