128.
I have expressed my doubts to the Director of Civil Aviation as to whether the arrangements that have been made for the collection of the tax are cost-effective and have suggested that the Government has lost its way from initial simple intentions and has involved itself in considerable efforts to overcome problems that could have been avoided had it been made clear to the aircraft operators in the first place that the fee payable to them would be a uniform amount per passenger, to be decided by the Government after taking into account the estimated cost of collecting the tax and the notional interest benefits arising from the retention of the tax money for the period to be specified in the Ordinance. The Director of Civil Aviation does not fully accept my comments and maintains that there was no oversight, stating that the initial decision to inform the operators that the fee would be based on the estimated full cost of collecting the tax and later to tell them that the interest would be claimed back, was a positive one which did not conflict with previous intentions. He also maintains that the more complicated formula for determining the fee was necessary to mute objections by recognizing the legitimate cost disparities between operators following the considerable difficulties and level of confrontation experienced from the operators. However, he accepts that there is scope for improvement and he has informed me that a management study will commence in the near future to examine the tax collection system.
129.
Accordingly, I have recommended to the Deputy Financial Secretary that the management study team be given broad terms of reference which would include a reconsideration of the basic intentions behind the Air Passenger Departure Tax Ordinance, with particular reference to the need for direct banking and the need to simplify the present cumbersome, complex and detailed arrangements for examining each aircraft operator's, and the aircraft operators' contractor's, cost estimates.
130.
Head 34 Defence: Miscellaneous Measures. Subhead 629. Defence Costs Agreement : capital works (block vote). Under the terms of an agreement between the Hong Kong Government and the British Forces, the Argyle Street Camp was to be handed back to the Hong Kong Government by the end of 1979. As part of the arrangements the supply sub-depot in Argyle Street was to be relocated and in December 1978 a contract for the construction of a new supply sub-depot at Osborn Barracks, which included a nominated sub-contract for a cold storage and air-conditioning installation, was let by the Architectural Office of the Building Development Department. The sub-contract sum for the cold storage and air-conditioning installation was $1.9 million of which $1.2 million was for the installation of two sets of identical refrigeration plant, each capable of supplying the entire cold storage system to provide 100% standby capacity.
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