he General Engineering Services Division achieved within-target business results. Adding to business stability, a four-year Service Level Agreement (SLA) with the Government Property Agency (GPA) and a five-year SLA with the Judiciary were secured and came into effect from 2007/08. No business was lost during the year. As a result of satisfactory cost control, operating cost showed only a small increase, largely due to rising labour cost. However, the Division expects to feel the full impact of price rises in 2008/09, as prices finally catch up with inflation and labour cost continues to surge.

To bring Digital TV to clients, our staff have been installing new digital systems or converting existing ones in government venues and quarters.

The Division remains committed to helping clients save energy. It assisted the GPA in conducting energy audits, and contributed to clients' applications to the Hong Kong Energy Efficiency Building Registration Scheme, typically after major renovations and the completion of Additions, Alterations and Improvement work. In 2007/08, 38 such applications were made with successful registration. Following the introduction of Digital Terrestrial Television Services into Hong Kong, the Division has also been helping clients to install new digital systems and convert existing systems in major government offices and some government quarters to HDTV in order to improve services to the clients.

Other energy-saving projects also made good progress. The Division has launched an initiative to promote the switch to LED exit signs which use only about two-thirds of the electricity consumed by traditional exit signs. All clients are expected to make the move to LED signs within two years. Another important energy project for the year was the installation of Hong Kong's first variable speed oil-free centrifugal compressor chiller at Government House. The chiller operates with magnetic bearing technology which reduces energy loss and damage to the bearing. It uses less power than conventional chillers and is quieter and cheaper to run.

We are planning for a major refurbishment of underground seawater pipes for major government buildings over the next two years.

Further to studies conducted in 2006/07 to assess the condition of the underground seawater cooling mains for major government buildings, the Division is planning to replace or rehabilitate 4.17 km of seawater pipes over the next two years. This will be the first major refurbishment of underground seawater pipe systems since they were installed, mostly 30 or 40 years ago.

Indoor Air Quality (IAQ) is on the agenda again as the Government encourages departments to obtain IAQ certification. This presents potential business opportunities as the Division is able to help clients upgrade their air-conditioning and ventilation systems before applying for IAQ certification from accredited bodies.

During the year, the Division won a Bronze Award in the Considerate Contractor Site Award competition organised by the Development Bureau for its work related to an air-conditioning contract.

Looking ahead, the Division will continue to focus on prudent expenditure control in order to maintain productivity and achieve the target margins.