mpleted
order to expedite the issue of the final certificate. However, it was not until January 1985 that the work w and the delay meant that the Government had to pay an extra $600,000 in electricity charges for the Art Tunnel during the period from December 1982 to February 1985. I have been informed that there is no provision within the contract for the recovery of this amount from the contractor and I have asked the Commissioner for Transport to seek legal opinion as to whether there is any way by which the Government can claim damages outside the contract.
184. Head 186 - Transport Department. Subhead 233. Student travel scheme - payments to operators. The student travel scheme was first introduced in 1971 and substantially revised in 1981. The current arrangement makes all students, including first degree university students, aged 12 to 25, enrolled in full-time education in Hong Kong, eligible for a student travel card which entitles the holder to travel at half the full adult fares on most routes provided by eight transport operators. The concessionary fares are generally available at any time during the day and can be used also on Sundays and school holidays. The student travel cards are issued annually for a fee of $10 a card and nearly 500 000 cards are currently on issue. Grants, based on the difference between the student fares and the adult fares and calculated by reference to a fixed percentage of each operator's total fare income, are paid to transport operators by the Government and the cost is currently about $250 million a year. A recent audit review of the student travel scheme not only noted the numerous administrative problems in implementing it, but also disclosed serious doubts about what the Government's policy objectives for the scheme were.
185. The scheme had modest beginnings and originated from the decision of one transport operator in 1971 to withdraw its own scheme of concessionary fares for school students. The Government felt that such action could be harmful to students from poor families who benefited from the concessionary fares when travelling to and from school and it was anxious that parents should not suddenly have to assume the extra cost. This was a reasonable concern for the Government but the decision to subsidize the student fares from public funds was essentially a short-term social measure restricted to transport provided by one operator to overcome an immediate problem which at that time was estimated to cost only $8 million a year. The scheme allowed school students aged 12 years and over to travel at half fare on journeys around school hours on any day except Sundays and school holidays, the operator being reimbursed on the basis of a flat-rate for each annual pass, issued free-of-charge to students. In 1972 the scheme was extended to transport provided by two other transport operators who had also operated their own schemes.
186. If the student travel scheme was to become permanent, then it was important that the original short-term objectives be reviewed at an early stage and full consideration given to its long-term objectives. It is an accepted principle that when the Government embarks on a programme of expenditure, such as the student travel scheme, it should adopt the following procedures:
-decide and clearly define the policy objectives; and
-having satisfied itself as to the merits of its objectives, consider the various policy options for the implementation of the objectives, including the cost and benefit of each option and the effectiveness of each of these options in achieving the objectives.
Only after going through such procedures would it be possible for the Government to make a decision based on the best value for money to be achieved from the expenditure incurred. The Government failed to follow all aspects of these procedures when considering the long-term justification for the student travel scheme and consequently, the expenditure on it was allowed to escalate towards uncertain educational goals of questionable relevance to the Government's overall objectives.
187. The Government's failure centred around two serious mistakes. The first mistake was the decision to include in the Memorandum for the Executive Council introducing the student travel scheme in 1971, a statement that the scheme should be considered as part and parcel of the Government's general policy of assistance towards education. This gave the scheme the stamp of permanence but at that time no proper consideration had been given to such long-term educational policy objectives. It was not until nearly three years later, in 1974, that it emerged that neither the Director of Education nor the Board of Education had been consulted prior to the approval of the scheme and the Director of Education has since maintained that the scheme contributed little to educational objectives. He claimed that the student travel scheme was unsuitable for education subsidy, that there were more direct education expenses that should have been given a higher priority for subsidy and that there were even educational arguments against facilitating long journeys by students, except for the small minority who were unable to secure a place in nearby schools. However, the Secretary for Transport does not accept that any mistake was made and has pointed out that the relevant policy branch of the Government Secretariat holds the ultimate responsibility in the formulation of education policy proposals for the consideration of the Executive Council and that the proposals are not based on just the views of the Director of Education.
188. Nevertheless, doubts were expressed by members of the Finance Committee of the Legislative Council about the operation of the student travel scheme as early as 1974. The scheme was already fraught with numerous administrative problems but the discovery that it might not have been serving educational policy objectives after all, combined with the need to find money for the expansion of secondary education, led to consideration being given to the possibility of abolishing the scheme. A working party, set up in 1976 to carry out a review of the validity and defects of the scheme, reported on the various administrative weaknesses which included, the suspected overpayments to transport operators because of the incidence of students using their annual passes infrequently, the difficulty in obtaining the agreement of
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