The recipients include Hospital Authority chief executive William Ho Shiu-wei - whose payment was about $1 million, the medical community source said - and the chief executives of public hospitals.

The 'annual performance incentive awards' system was adopted in 1991. Payments are made at the end of each executive's contract year, depending when they started their jobs. The authority refused to disclose how much the executives were given and argued that the payments were a legitimate part of the executives' remuneration packages.

Secretary for Health, Welfare and Food Yeoh Eng-kiong said the awards were not extra payments but simply part of the executives' annual salaries. 'It provides a very effective annual performance incentive,' he said. 'The [performance] assessments were done by a panel comprising the chairman of the authority, the head of the authority's six standing committees, and a representative of the bureau.'

The sources revealed that all executives were getting the maximum amount for the awards, with Dr Ho's payment amounting to 24 per cent of his regular annual salary of about $4 million. The other executives are entitled to maximum awards of 10 per cent of their normal annual salaries, which range from $2 million to $4 million.

The Hospital Authority denied that the performance assessment exercise was meaningless. However, the payments were attacked by legislator Dr Lo, who is also president of the Hong Kong Medical Association. He said that to conduct year-end assessments was 'a waste of public resources' if the executives were paid the full award no matter how they performed.

He also said it was 'perverse' to offer the incentives, and the money could be better spent on infection control. 'It will cause many of them to deviate from the prime objective of the organisation. The mission is to provide health care at a reasonable standard. But the incentive award is compromising the standard of service,' he said. 'It leads to the situation where the frontline workers have insufficient protection against disease. The general public will be the final victims.'

Dr Lo also questioned why the only executives entitled to the awards were those who controlled the resources in their respective institutions. 'It remains a question why other senior staff, like the director of professional services and public affairs Ko Wing-man, do not enjoy the same package,' he said. Dr Ko holds the second-highest position in the authority and acted as chief executive when Dr Ho contracted Sars last year.

Joseph Lee Kok-lung, chairman of the 19,500-member Association of Hong Kong Nursing Staff, said the policy was 'demoralising'.

'I do not object to the award system in general if it is part of their remuneration package,' he said. 'But about 2,000 frontline staff are on contracts. They enjoy no increments - when their contract is renewed, their salaries stay the same. I think the award policy is very demoralising.'

He said the money would have been better spent on improving facilities, especially ahead of a possible new outbreak of Sars. He added that many wards were over-crowded and nurses were having to deal with more patients than ever.

WHO RECEIVED THE PAYMENTS?

Hospital Authority Chief Executive William Ho Shiu-wei

HK east hospital cluster: Pamela Leung Ming-kuen, Anita Chan, Ma Hok-cheung, D. Wijedoru, Tom Kam-tin.

HK west cluster: York Chow, Cissy Yu, Leung Sau-chi.

Kowloon central cluster: Lawrence Lai Fook-ming, Lin Che-kit, Cheuk Tsan; David C.H. Chan, Choy Yuen-chung, Cecilia Lam Shiu-ling.

Kowloon east cluster: Tse Chun-yan, Antony Leung Chi-tat, David Lam Tat-yin.

Kowloon west cluster: Lily Chiu Lei-lei, Helen Tinsley, Luk Che-chung, Margaret Hong, Cheng Pak-wing.

New Territories east cluster: Fung Hong, Raymond C.I. Chen, W.C. Ip, Lai King-kwong, Susanna Lo, S.Y. Tung.

New Territories west cluster: Cheung Wai-lun, Joseph Lee, Lee Hoi-che