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Following is a question by the Hon Wu Chi-wai and a written reply by the Secretary for the Environment, Mr Wong Kam-sing, in the Legislative Council today (October 15):
Question:
In April 2012, the Finance Committee of the Legislative Council approved an allocation of $150 million to the Environmental Protection Department (EPD) for implementing a scheme to provide a one-off subsidy to vehicle owners for replacement of the catalytic converters and oxygen sensors of their taxis and light buses fuelled by petrol and liquefied petroleum gas (the replacement scheme), which was launched late last year. Recently, I have received complaints from some members of the transport industry who pointed out that the relevant catalytic converters were of problematic quality. The poor performance of these catalytic converters when compared with the previous ones has resulted in frequent engine stalling in some of the vehicles soon after installation of the catalytic converters. Such persons are also dissatisfied with EPD's refusal to make public the performance test report of the relevant catalytic converters. In this connection, will the Government inform this Council:
(1) of the number of complaints received by the EPD about the catalytic converters since the launch of the replacement scheme, and the follow-up actions taken on such complaints;
(2) of the tender conditions in respect of the catalytic converters; the respective weightings of bidding price and other considerations in EPD's selection of suppliers and whether the suppliers were required to provide guarantees for the service life and quality of the catalytic converters; if so, of the details; if not, the reasons for that;
(3) as EPD has indicated that the failures of the catalytic converters were related to poor vehicle maintenance and repair, whether EPD has ascertained from those drivers of vehicles having problems with catalytic converters if they have changed the maintenance and repair procedures for their vehicles since they used the newly installed catalytic converters; if the EPD has, of the details; if not, the reasons for that; and
(4) whether EPD has conducted any longitudinal study on the quality of the catalytic converters selected in the tender, in order to gauge their long-term performance; if the EPD has, of the details; if not, the reasons for that?
Reply:
President,
Proper vehicle repair and maintenance (including timely replacement of aged catalytic converters, repair of ignition and air fuel ratio control related components such as mixer, evaporator and exhaust gas regeneration valve, etc.) is vital to ensure that vehicles operate smoothly and with low emissions. Proper vehicle repair not only reduces vehicular emissions but also improves driving performance and lowers fuel consumption.
In 2011, the Environmental Protection Department (EPD) together with the taxi trade collected maintenance data from more than 600 taxis and found that poorly maintained liquefied petroleum gas (LPG) vehicles could have emissions that exceed normal levels tenfold. To properly repair and maintain vehicles, repairing faulty engines is also very important on top of replacing timely aged catalytic converters. We have already shared such results with the taxi trade through seminars.
The Government has subsidised LPG/petrol taxi and light bus owners to replace catalytic converters of their vehicles to reduce emissions. With the support from the Legislative Council (LegCo) and the taxi trade to the replacement scheme, the Finance Committee of the LegCo approved in April 2012 an allocation of $150 million to the EPD to provide a one-off subsidy to about 21 000 LPG/petrol taxi and light bus owners for replacing the catalytic converters and oxygen sensors. The voluntary replacement scheme was launched in August 2013. It received applications in three stages and was completed in April 2014. With 13 942 taxis and 2 881 light buses enrolled in the scheme, the overall participation rate was around 80%.
To ensure the quality of catalytic converters, the EPD imposed the catalytic converter's performance specifications and strict quality control requirements in the tender documents, including random checking for each batch of its main catalytic component (i.e. precious metals) content to ensure their performance. Also, catalytic converters suppliers are required to provide 12 months' warranty to owners of vehicles concerned. This warranty is normally not provided under existing trade practices, and the arrangement provides much better protection for vehicle owners.
We also have put in place handling procedures for processing warranty claims under the replacement scheme, including checking whether the precious metal content of catalytic converters complied with the specifications and requiring manufacturers of catalytic converters to investigate damaged catalytic converters. If the report finds no problem with the quality of the product, we will invite experts from the Vocational Training Council (VTC) to give us third party advice to ensure the fairness of the test result. We will also inform vehicle owners of the examination results.
With respect to the questions raised by Hon Wu Chi-wai, our reply is as follows:
(1) The EPD handles all warranty claims under the replacement scheme in accordance with established procedures. When a vehicle owner who has joined the scheme asks for replacement of its catalytic converter under the terms of warranty, the EPD will handle accordingly. Up to the end of September this year, catalytic converter suppliers had received a total of 93 warranty claims, all of which had been dealt with accordingly. For cases in respect of which investigations had been concluded, the results indicated that damage to the converters was due to improper maintenance of the engine or use of poor quality engine oil rather than the quality of the converters;
(2) The EPD's procurement for subsidising taxi and light bus owners to replace catalytic converters and oxygen sensors was conducted in a fair and open manner. It was in line with the established tendering procedures of the Government.
The conditions of tender were set with reference to the performance and specifications of converters rather than the producers or places of manufacture in order to allow fair competition among products of different brands in the local market. Vehicle owners would then have more choices in purchasing the service parts. The EPD also set strict quality control requirements, including random checking of its main catalytic component (i.e. precious metals) content for each production batch to ensure their performance. In addition, suppliers are required to provide 12 months' warranty to the owners of their catalytic converters. This warranty is normally not provided under existing trade practices, and the arrangement provides much better protection for vehicle owners.
To ensure that the garages providing replacement service are competent in delivering the services required under the tender, the tender document has stipulated that each tenderer can only submit one tender and as at the tender closing date, tenderers should engage in the vehicle maintenance business at one or more garages in Hong Kong. We also specified in the service contract that the garages need to provide three months' warranty for their installation.
During tender evaluation, we will firstly ensure that the bidder can fulfil all the tender requirements. Then based on the lowest bid principle, we will award contracts to those who are in full compliance with the requirements of the tender. The Government's level of subsidy is determined with reference to the amount of the minimum bid price. We have engaged two catalytic converters suppliers and more than 50 replacement service garages in order to increase competition, so that the owners can have more choices. If an individual supplier or garage's bid price is higher than the prescribed amount of subsidy, vehicle owners who choose its services will have to pay for the price difference.
(3) When a vehicle owner who has joined the scheme asks for replacement of its catalytic converter under the terms of warranty, the EPD will contact the owner to follow up. As mentioned above, we will check whether the precious metal content of the catalytic converter complied with the specifications and require its manufacturer to investigate damaged catalytic converters. If the report finds no problem with the quality of the product, we will invite experts from the VTC to examine the report as a third party and give advice to ensure fairness to and protection for the owner. We will also inform the vehicle owner of the examination results so that he can follow up with his garage; and
(4) Catalytic converters replaced under the replacement scheme can enjoy 12 months' warranty. If there is any problem with the catalytic converter, owners can submit warranty claims against the suppliers. Among the cases that the EPD has completed investigations, we found that damage to the vehicle's catalytic converter is due to improper engine maintenance or use of poor quality engine oil and has nothing to do with the quality of catalytic converter.
Ends/Wednesday, October 15, 2014
Issued at HKT 13:27
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