7.53 Conclusions and Recommendations. The Committee note that substantial progress has been made in implementing the recommendations of the review team on procedures (including the procedures in the Mass Transit Office of the Engineering Development Department) relating to the collection of revenue from properties and investments, land transactions and connected fees and charges for which the Director of Lands is responsible. The Committee note that further work has yet to be done to fully implement the recommendations for establishing a sound system of internal control and to formally issue a manual of guidance for officers concerned with each step of the procedures. The Committee note that this should be completed by September 1986. The Committee wish to be informed if this deadline is not met.
7.54 The Committee note that due to staff shortages progress on implementing the recommendations of the review team on procedures (including the procedures in the Mass Transit Office of the Engineering Development Department) relating to the assessment of revenue from properties and investments, land transactions and connected fees and charges for which the Director of Lands is responsible has been slow. However, the Committee note that following the appointment of a Senior Estate Surveyor to oversee the establishment of a sound system of internal control and the issue of a guidance manual, rapid progress should now be possible and that work should be completed by April 1986. The Committee wish to be informed if this deadline is not met.
7.55 The Committee note that a Senior Estate Surveyor has recently been appointed as a training officer to instruct staff in all districts in the proper procedures for the assessment of revenue. The Committee consider that this is a sensible and necessary arrangement.
7.56 The Committee are concerned that new cases of error, omission or oversight in the assessment and collection of revenue relating to land transactions arising subsequent to their Sixth Report (i.e. cases relating to grants or leases initiated since December 1983), involving undercollections of revenue totalling $2 million have been brought to their notice. However, the Committee note that the sums involved have now been recovered and that a Technical Circular has been issued in order to prevent future errors in the determination of the operative date for use in calculating the monetized value of Letters A/B.
7.57 The Committee recommend that a further check should be carried out of past cases to ensure that there are no other cases of monetized Letters A/B where an incorrect operative date has been taken.
MARINE DEPARTMENT
7.58 Paragraphs 150–153. The failure to carry out a proper pre-contract evaluation of a water-jet propulsion system for four marine launches and to take timely action to provide crews to man the launches. Commenting on the Director of Audit's report, the Director of Marine refuted the suggestion that there had been a lack of pre-contract evaluation. As early as 1972 the Marine Department had investigated the suitability of water-jet systems for marine propulsion. The problems experienced in police launches with this form of propulsion had been identified and modifications effected before specifying a water-jet system for the new Marine Department launches in 1976. Water-jet systems were particularly suitable for shallow water operations. The unit specified for the Marine Department launches was an improved design in which the designer had confidence that he had overcome the problems associated with the earlier design. However, there were delays in the delivery of the water-jet boats due to defective equipment such as the fuel injection pump and the steering gear supplied by the sub-contractor. He added that certain modifications requested by the Marine Department could not be done because modifications would have invalidated the guarantee.
7.59 The Director of Marine also rejected the criticism that the water-jet launches were not suitable for their intended operating environment, explaining that the water-jet propulsion system was well publicized in the professional journals and provided very good manoeuvrability at very slow speed.
7.60 On the matter of the delay in recruiting the crew to man the launches, the Director of Marine explained that his department had requested the additional crew some one to three months in advance of the delivery dates of the vessels but that the Finance Committee of the Legislative Council did not approve his request until about one to two months after delivery. He said that the delay may have been due to changes in manning scales affecting all Government craft. At that particular time there was also difficulty in recruiting sailors because of the lower salaries offered by the Government compared with the commercial sector.
7.61 Commenting on the fact that the water-jet launches had to be converted to propeller drive, the Committee asked if this meant that the choice of jet propulsion was wrong in the first place. The Director of Marine explained that the police water-jet launches had been operating satisfactorily but he acknowledged that the water quality in Deep Bay where they were operating was much better than in the typhoon shelters where the Marine Department launches were required to operate. He added that when the launches were designed in 1975 the conditions in the typhoon shelters were not as bad as they became in 1979 when the plastic bag problem had increased. The Director was then asked whether he had tested the water-jet system in a typhoon shelter and he replied that the police water-jet launches had been tested in various areas within the waters of Hong Kong but that there was no record of the vessels having been tested in typhoon shelters. He added that the police launches were of a different design. In answer to further questions, the Director acknowledged that the water-jet launches were not suitable for part of their intended operating environment. He explained that additional typhoon shelters had been constructed in these locations since 1975 when the boats were designed and that this had adversely affected the operating conditions.
7.62 It was suggested to the Director of Marine that the contractor might be held responsible for the problems experienced with these vessels. The Director accepted this possibility but following a legal opinion it had been decided
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