September 1971 to complete. Demand notes seeking to recover costs from the owners were not issued until July 1975, nearly three years after attention was first invited in audit to the failure to do so. By this time whatever prospect there might have been of recovery was remote and the Registrar General commented that he feared that it was another example of public revenue being lost due to the Government's failure to act in time. The sums demanded did in fact prove to be incollectible, for Senior Crown Counsel advised against pursuing recovery, inter alia pointing to the lapse of time involved, and in accordance with this advice the Deputy Financial Secretary in March 1977 authorised the waiver of claims amounting to over $366,000.
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62 Head 66 – Public Works Department: Water Supplies. Subhead 011. Transport and travelling. A Government officer is not normally eligible to claim reimbursement of any part of the expense he incurs in travelling between his home and his place of work, but an exception to this rule is made in respect of an officer living and/or working in the New Territories who, in certain circumstances, is permitted to use his private motor vehicle and to claim mileage allowance for home-to-office journeys, provided he is required to use that vehicle for official duty on arrival at his office. It was noted in audit that many of the 27 officers at the Lok On Pai Desalting Plant who had been granted this concession either did not use their cars on duty after arrival at work or did so very infrequently. Following a re-examination of the position, the Government Water Engineer (Desalting) concluded that the concession was unjustified in over half the cases concerned and it was withdrawn, with a saving in the region of $4,000 per month.
63 For officers not using their own cars, a service to the Desalting Plant was provided by the Government, but it was observed that contrary to the regulations governing the provision of such a service, in the majority of cases no charges had been made for its use. Charges have been raised since the date of the audit observation, but the absence of proper records has apparently precluded the recovery of any arrears. Free use of the transport for other purposes, which notwithstanding the regulations the Director of Water Supplies considered to be justified by the remoteness of the site, was permitted to continue pending a Government Secretariat decision.
64 Head 66 - Public Works Department: Water Supplies. Subhead 999 010. Chargeable water. Under the provisions of the Waterworks Ordinance, the Water Authority may require the payment of a deposit of such amount as it may deter- mine, to cover any charges which may be due or become due. In general the levels of deposit have remained unchanged since 1960, when not only were charges for water lower than they are today but the billing cycle was shorter, and the possibility of deposits being insufficient to meet the accounts of defaulters has correspondingly increased. For several years therefore, I have been advocating that the deposits for the different categories of consumer should be raised to levels more in keeping with their average bills, but although it was agreed in 1974 that this should be done, no definitive action has yet been taken and the matter is still the subject of review. The total of the amounts written-off or submitted for write-off in 1976-77 in respect of unpaid bills was over $520,000, some thirty times that of ten years earlier, and whilst this high level to some extent represents the aftermath of the accounting inadequacies prior to September 1972, to which I referred in my report for 1972–73, a substantial portion of the loss of revenue might well have been avoided had more appropriate levels of deposit been in force.
65 The Director of Water Supplies is continuing his efforts to reduce the loss of water from illegal connections and theft from Government mains, a matter which is of particular concern in the light of the current water supply situation. Whilst by its very nature the extent of the problem must remain conjectural, he considers that the loss is not so high as the 10% of average daily consumption previously estimated, although it remains a significant factor in the overall unrecorded consumption within the system and, even taking into account that some of the water drawn off illegally might otherwise have been supplied free, continues to represent a very substantial loss in monetary terms.
66 Heads 67, 68, 69, 70 and 71 – Public Works Non-recurrent – Compensation. As may be judged from the comments I have made on the subject in recent years, the questions of the proper level at which compensation should be awarded and the method by which it should be assessed are vexatious ones and permit of no easy solution. Whilst the majority of my comments in the past have concerned special situations, it has more recently become apparent that the rules and conditions attaching generally to the payment of compensation for clearances of land in the New Territories required for Government purposes are ambiguous and in need of revision. Those presently in force were promulgated in 1964, but there has since developed a divergence of opinion between the interpretation placed on them by the Deputy Financial Secretary and their rather more generous application by the Secretary for the New Territories. There is also some doubt on the extent to which certain categories and rates of compensation have received the proper approval of the Finance Committee of the Legislative Council. It is hoped that the difficulties may be resolved following an overall review of the various categories of compensation and ex-gratia allowances now being undertaken by the Compensation Review Committee.
67 Heads 68 and 69 ~ Public Works Non-recurrent Terminated contracts. In previous years, when inviting attention to the need for contractors' means to be properly assessed and subsequently monitored in order to ensure that they were not given work which it was beyond their financial capacity to perform, I referred to the near inevitability that when a contractor did default as a result of having overextended his resources, the provisions in the contracts providing for the recovery of damages for non-fulfilment would be of little avail in preventing substantial loss to the Government. This has unfortunately proved to be the case in over 20 contracts, involving 9 contractors, entered into at various times between 1963 and 1972, in respect of which irrecoverable amounts totalling over $33 million were submitted for write-off during the financial year. Whilst paling into relative insignificance compared with the total sum which will require to be written-off, it is nevertheless a matter of particular concern that the amounts involved include over $200,000 which might
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