not to claim damages from the contractor because his department was responsible for specifying the make and type of the jet unit which had been supplied by a sub-contractor. He added that lessons had been learned from this experience and it was now the practice not to specify a particular make of engine but to specify the performance required and leave it to the contractor to accept responsibility for the design and the compatibility of all the equipment.
7.63 On being asked whether it would have been possible to seek approval for the recruitment of the crew at an earlier date, the Director of Marine said that it was not always easy to judge the timing particularly in view of the possibility of delay in delivery of the vessels. He explained that these launches were late in delivery and that it was cheaper to allow the vessels to wait for the crew than for the crew to wait for the vessels.
7.64 Conclusions and Recommendations. The Committee note that at the time of the decision to purchase the four water-jet propelled launches the nature and the degree of water pollution in which the boats were to operate could not have been fully foreseen. Nevertheless, the Committee are of the view that the decision to order the four water-jet boats was taken without proper evaluation of the difficulties that were likely to arise with the operation of boats of this particular design. The Committee note that the water-jet engines incorporated a number of new features and that they had not been fully evaluated in Hong Kong waters. The Committee recommend that in future, when new types of equipment are to be introduced in any number, a prototype model is first evaluated under the most stringent conditions likely to be encountered in Hong Kong before proceeding to order the full quantity of equipment required. In this context, the Committee recall the advice in their Fifth Report issued in December 1982 that the Government should avoid selection of equipment by mere 'catalogue engineering'.
7.65 The Committee note the Director of Marine's evidence that some of the delays in completion of the project were attributable to the delivery of sub-standard equipment by a sub-contractor but that the Government did not pursue any claim under the contract for the payment of damages on the grounds that the Government's contract was with the main contractor and not with the sub-contractor.
7.66 The Committee do not accept this and are of the view that a main contractor has a duty to ensure that all aspects of the contract, including work done by the sub-contractor, are completed in time and to standard. The Committee are therefore of the view that a claim against the main contractor should have been pursued and that this was a matter for the main contractor and not the Government to take up with the sub-contractor.
7.67 The Committee accept the evidence of the Director of Marine that in 1979 there were particular difficulties about recruiting crew to man the new boats. However, the Committee believe that the Director could have anticipated the difficulties. The Committee recommend that in future earlier action be taken to establish the posts required, particularly where recruitment difficulties are anticipated.
ROYAL HONG KONG POLICE FORCE
7.68 Paragraphs 7–11. The current arrangements for funding the Police Welfare Fund and the Fire Services Department Welfare Fund and the improper crediting of $7.2 million to the Police Welfare Fund. Commenting on the Director of Audit's report, the Commissioner of Police first dealt with the $7.2 million stated to have been incorrectly credited to the Police Welfare Fund instead of to general revenue. He considered that the matter was a legal one which stemmed from the lack of clarity in the law and its need for updating. Following the Director of Audit's comments, legal advice had confirmed that the payment of the proceeds from the hire of members of the Auxiliary Police Force into the Police Welfare Fund was illegal. However, on this basis he thought that the payments should have been paid to the individual members concerned and not to general revenue as had been suggested. The Commissioner explained that members of the Auxiliary Police Force were now fully integrated with the regular force and received benefits from the Police Welfare Fund. Therefore, despite the technical illegality, it was not wrong in principle to credit the proceeds from the hire of members of the Auxiliary Police Force to the Police Welfare Fund. He added that it had been agreed that the policy on the charges for the hire of members of the Auxiliary Police would be reviewed by the Secretary for Security following which proposals to change the law might be made.
7.69 On the question of whether it was right in principle for the hire charges of police officers to be paid into the Police Welfare Fund, the Commissioner of Police said that he disagreed with the Director of Audit that hire charges should be paid to general revenue and that the Police Welfare Fund should instead be funded by a grant from the Government. He explained that the existing welfare system had been built up over many years and that it embraced a wide range of services, including loans to police officers, sporting facilities, holiday homes, a travelling loan scheme, clubs and grants to police canteens and messes. He said that such facilities were a very important stabilizing factor in the Police Force and if the arrangements were changed, Force morale would suffer. The Commissioner added that the authority for the payment of the hire charges to the Police Welfare Fund was clearly established by law. If the Police Welfare Fund had to depend on annual Government grants then there would be numerous bureaucratic procedures leading to uncertainty about the level of subvention which would affect the efficiency of the Police Force. He said that the amount of money involved was comparatively insignificant and emphasized that the Police Welfare Fund was now run in accordance with Government accounting procedures and was subject to audit. The Commissioner confirmed that the police officers performing hire services were regarded as being on official duty.
7.70 In reply to questions on the comparison between Police and Fire Services Department welfare benefits and the welfare benefits available to other Government departments, the Secretary for Security said that the Police Force and Fire Services Department were the only two departments that were funded through hire charges for special services. It was not unreasonable for them to receive special treatment in view of their unique contribution to the community and
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