Management and staff relish the challenge of operating like a normal trading

PUBLISHED : Friday, 30 October, 1998, 12:00am
UPDATED : Friday, 30 October, 1998, 12:00am

The Electrical and Mechanical Services Department story mirrors the way Hong Kong has changed during the past 50 years.

From the austerity of post-war Asia, through the booming 70s and 80s, to the uncertainties of pre-handover 90s, the department has embraced technological challenges and changes.

By far its biggest task has been adjusting to the realities of no longer operating as a government-funded enterprise. That momentous change came about with the introduction of the Electrical and Mechanical Services Trading Fund in 1996.

'Before then, we would get our money [from central government] on an annual basis to pay for all our staff, materials and so on, and we would carry out work for other departments,' Hugh Phillipson, the EMSD director, said.

'They wouldn't know how much the work we were doing cost; we just got on with the work we thought was appropriate.' The Trading Fund has meant a transformation in the way the department operates. It no longer receives any money directly from central government. When the fund was set up, the department was given its assets - buildings and equipment.

The Government can be described as a shareholder in the fund, and is paid an annual dividend - the department's operating profits.

At the same time, all operating costs and salaries are covered by what the department charges its customers.

'We now operate just like a normal trading concern, except the staff are civil servants. And that means other government departments know exactly what things cost and they can now decide what services they want from us - instead of us deciding on their behalf. So the fund has meant we are now much more customer-focused in a normal, commercial way.' Such a profound change meant staff values and working practices were required to change dramatically.

Mr Phillipson paid tribute to his staff - about 4,500 working in the Trading Fund, 300 in the regulatory side and others on secondment to different government departments, such as the Architectural Services Department, Building Services and Drainage Services.

'They have been very co-operative. Obviously, before the Trading Fund was set up, they were nervous about this major change in their work environment but we have increased training for each staff member and the feedback we're getting back from our customers is that our staff are generally doing very well. We're not perfect, but the culture change is taking place.

'We've put a lot of time and effort into training staff, communicating to them what it's all about, making them aware of the new financial realities . . . that we have to operate on a sound commercial basis.' Traditionally, EMSD operated a huge central workshop but, with the realities of operating in a commercial environment, the workforce has been re-organised regionally. This enables a faster response time from local depots.

Mr Phillipson said the success of EMSD's transformation could be gauged in the work the department had been contracted to carry out at Chek Lap Kok.

'The Airport Authority is a commercially- minded organisation. They were not going to take on the services we had provided at Kai Tak for many years. We had to go through some tough negotiations to secure work there. In fact, three tenders were in open competition and we won them.' This ability to survive open-market competition will become a way of life for the department. From next August, government departments will begin a three-year transition to untie, if they choose to, from the traditional supply of government services.

But Mr Phillipson believes the department has many proven selling points which will help it compete alongside quality suppliers.

'First, there's our reliability. The fact we've been operating a long time is a big asset. And our employees are loyal, long-term staff,' he said.

'Another selling point is we have a huge range of experience within the department; there isn't much within our field that we're not familiar with.'