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Following is a question by the Hon Chan Kwok-keung and a reply by the Secretary for Economic Services, Mr Stephen Ip, in the Legislative Council today (May 17) :

Question :

Regarding the redundancy scheme announced by the China Light and Power Company Limited (CLP) in late March and the prevention of redundancy by franchised public utility companies, will the Government inform this Council:

(a) of the government departments involved in mediating the labour dispute arising from CLP's redundancy act and the mediation process and outcome thereof;

(b) whether contingency measures have been drawn up to minimize the inconvenience to the industrial and commercial sectors and the general public when problems with electricity supply arise due to the industrial actions of the CLP staff; and

(c) whether the Government has asked CLP and other franchised public utility companies to avoid large-scale redundancy; if not, whether it will consider including such terms in new franchise agreements; if it will not, of the rationale for that?

Reply :

Madam President,

(a) Following CLP's announcement of its departure scheme in late March, the Labour Department took the initiative to shuttle between the management and staff side of CLP to give advice and encourage communication between them. Direct dialogue was established and the matter was resolved. In the process of mediation, the Labour Department also provided a variety of services for the staff of CLP, including setting up a telephone hot-line to answer their enquiries on labour rights under the relevant legislation, assigning special counters at ten of its job centres for the provision of employment services to the affected staff, and deploying a team of officers to the outplacement service centre established by CLP to provide affected staff with career counselling as well as on-site registration for placement service.

(b) CLP has put in place contingency plans to cope with problems that may occur in its supply system. CLP's generation and distribution systems are highly automated and equipped with reserve generation units and alternative circuits for minimising any impact that may be caused by problems in the supply system. If there is any problem with staff availability, CLP may re-deploy its staff to handle contingencies and if necessary seek external support, including seeking assistance from its contractors, to ensure normal supply of electricity as far as possible. CLP also has arrangements with Hongkong Electric Co Ltd and power authorities of Guangdong on mutual assistance in case of need. Moreover, CLP has in place a load management programme for ensuring that if necessary essential facilities like hospitals would have priority in electricity supply. The Electrical and Mechanical Services Department will also maintain close liaison with the power companies and closely monitor the operation of their supply systems.

(c) CLP does not have any franchise under its Scheme of Control Agreement (SCA) with the Government. The objective of the SCA is to ensure that the power company would provide reliable electricity supply to the public at a reasonable price while allowing its shareholders to earn a reasonable return on their investment. Under the SCA, the power company is responsible for the reliability of electricity supply. However, as a commercial entity, the power company can formulate and implement its own human resources policy so that it could maintain reliable electricity supply and at the same time optimise the use of its resources and enhance its productivity with a view to keeping tariff as low as possible.

According to information provided by the relevant bureau, franchise agreements between the Government and public utility companies primarily aim to ensure the provision of sufficient and reliable services by the franchisees. As in the case of the power companies, these franchisees formulate and implement their own human resources policies.

For the above reasons, we consider it inappropriate to include terms on avoidance of large-scale redundancy in the franchise agreements with public utility companies or SCAs with the power companies.

End/Wednesday, May 17, 2000

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