It's time for the PAA to come under he spotlight

PUBLISHED : Monday, 22 November, 1993, 12:00am
UPDATED : Monday, 22 November, 1993, 12:00am

THE Provisional Airport Authority (PAA) has had a lot of publicity recently - very little of it good. The South China Morning Post reported last Tuesday how a senior executive has been denied a permanent position after allegedly having tried to arrange a trip overseas at the PAA's expense. Accusations also abound about the PAA's peculiar hiring policy that permits foreign nationals living in Hong Kong to be hired on expatriate terms and local residents working abroad to be hired back on local terms.

Charges have been levelled at the PAA for other forms of discrimination, none of which the public can act on because the organisation, though funded entirely by the taxpayer, escapes Legislative Council scrutiny, except in a most superficial way.

The charade cannot continue if the PAA's credibility is not to suffer further. Action must be taken to ensure that the PAA is more accountable to the taxpayer than it is today, when the operation functions as a separate fief which does not even have to explain in detail its annual $500 million budget.

As responsible residents of Hong Kong, we have to be sure that the PAA is not overly extravagant because any money saved is money which can be invested in our society.

Problems with the PAA stem from the very way it has been created. The constitution of the PAA gives it both the bad characteristics of a government bureaucracy and those of a profligate private corporation in which we the shareholders have no say.

THE trouble starts at the top with the chairman of the board of directors being the Financial Secretary Hamish Macleod. The anomaly of having the same person responsible for raising funds as the nominal chief of the PAA and the dispenser of that fund as the most senior Government official on finance seems to have been lost on the administration.

The solution to this conflict is to divorce the Government from the PAA as much as possible by appointing an outside chairman to oversee the Authority's operation and by letting him be answerable to the Legislative Council. Such a chairman should have no business dealings with the PAA and must not be a contractor, supplier, consultant, adviser or banker to the organisation. He should be respected in the community and his record - as well as his personal integrity - must be beyond reproach.

Just how archaic the PAA is was revealed to the public when the previous chief executive officer, Richard Allen, was asked to resign with a golden handshake worth $5.5 million. For months, the Government, citing the confidentiality of a personal contract, refused to divulge the amount of the settlement (oblivious to the fact that the money was from the public purse), or give reasons for Mr Allen's dismissal.

The director of audit is forbidden to examine the PAA books. Even if the director of audit were given some scope in vetting the Authority, he would still have to report directly to the Financial Secretary who of course also happens to be the chairman ofthe PAA.

To get us out of the fix, Legco must demand a more effective monitoring role over the PAA. The Authority's management no doubt consists of high-calibre professionals who are staking their personal reputations on the job. But the confusion over individuals' roles nevertheless raises some grave questions about their ultimate loyalty.

The current chief executive officer, Dr Henry Townsend, for one, was recruited from the American contracting firm Bechtel and has been an adviser to the airport project. By being a senior employee of Bechtel, which has a stake in the airport strategy, Dr Townsend's past and perhaps future affiliation to that company seems to contradict a point raised in the PAA's latest annual report which said: ''No contracts of significance to which the Provisional Airport Authority was a party and in which a member ofthe board or an executive director had a material interest subsisted at the end of the year or at any time during the year.'' Some of the fears would be allayed if the Authority were to explain the terms under which Bechtel agreed to lend Dr Townsend to the group, and what contracts there might be between the American construction giant and the PAA.

Hong Kong should remain committed to hiring the best talent wherever he can be found for the right price. This quest for excellence does not mitigate the need to train local people to higher standards and to employ them in senior executive positions.

The PAA currently employs, other than Dr Townsend, six executive directors, of whom only one is a local. The latest report also does not mention any effort to localise what has to be the most powerful quango ever conceived for Hong Kong, an oversight that is alarming in its implications at a sensitive time when the subjects of fair treatment, equality and human rights are being addressed.

The Authority can dispel a lot of suspicions about its hiring policy were it to explain this in detail to Legco and to report the criteria and fees given to senior staff recruitment firms.

To bring the PAA chief executive officer before legislators means a break with convention and with the present code of silence practised by the Authority in its day-to-day management. This departure from the past should be done to help the public understand the PAA better and to set a precedent for the future when one hopes that the greater accountability promised to Hong Kong by the present Governor is finally, belatedly, realised.

Some of us are baffled that, while the Financial Secretary consistently proclaims the autonomy of the PAA, the Authority is heavy from the weight of so many - six - Government officials serving on its board of directors. As if the situation were not untenable enough, four of these six had been shuffled out of the board in the previous year because of their promotions in or retirement from the civil service. This, along with the exit of the previous chief executive officer under secret circumstances, hardly bodes well for continuity in an operation which is supposed to oversee the airport strategy from inception to completion - and beyond.

Without the probing eyes of the director of audit and the Securities and Futures Commission (because the PAA is neither the public nor a privately listed concern), we the shareholders have to rely on faith and the external auditors as their monitor.

No outside chartered accountant, however, can compensate for the director of audit who has access to government files. Since much of what the PAA does involves close contacts with official bureaucracy, it might be better to include the director of auditin the screening process.

Since the Government plans to substitute the Airport Authority Bill for the Provisional Airport Authority Ordinance during this Legislative Council year, time is of the essence to persuade the administration to do things right.

We know the Government is keen to base this bill on the law governing the Mass Transit Railway Corporation which, for us, is not the epitome of open public accountability. The MTRC Ordinance, being 18 years old, may have outlived its usefulness in a more mature age when the public is learning to be more aware of its rights and of the Government (and quango) obligations.

Perhaps a debate on the Airport Authority Bill may prompt a review of the MTRC Ordinance. Hong Kong needs more than just a new airport but also a new, critical appraisal of its various semi-private corporations.

Peter Wong is a Liberal Party Legislative Councillor. Edward Chow is chartered accountant and capital projects expert.