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| Mr Ho Kwong-wai, JP |
The Electrical and Mechanical Services Trading Fund recorded a 7.3% revenue increase in 2007/08, with a slight retraction of 0.9% in return on revenue. The numbers indicate that the business continues to be stable despite the pressure of inflation and competition.
Revenue in 2007/08 was $3,534 million, up on the previous year (2006/07: $3,293 million). The return on revenue was 10.4%, marginally lower than last year's 11.3%, and still maintaining a double digit return.
Long-term Service Level Agreements (SLAs) continue to make up the core of our business. During 2007/08 we secured a five-year SLA with the Judiciary, a six-year SLA with the Correctional Services Department and a ten-year SLA with the Leisure and Cultural Services Department. These augment the various long-term SLAs secured in the previous years, adding stability to our business base.
I am delighted to also report some strategic wins. Most notable was winning the competitive tender for the Ko Shan Theatre comprehensive stage management contract including sound management. Theatre sound management has growth potential and we are excited about the opportunities ahead.
Other competitive tender wins worth mentioning included the Hospital Authority maintenance service contract for medical equipment, the Housing Authority maintenance and repair contract for general purpose vehicles, and seven Airport Authority maintenance contracts for major E&M systems at the airport. We also won the outsourced contracts under the Food and Environmental Hygiene Department for the districts of Yuen Long, Tai Po and Tuen Mun. I cannot stress enough how important it is that we take part in and win competitive bids; it guards us against complacency and helps us keep abreast of market realities.
After scaling up the Information and Communications Technology (ICT) team via the creation of a new Strategic Business Unit in 2006/07, our efforts in ICT continue to pay off. During 2007/08 the team's Mobile CCTV applications won the Best Public Service Application (Small Scale Project) Bronze Award in the Hong Kong ICT Awards 2007.
Last year we also reported commissioning a consultancy study on engineering asset management. This study produced a Replacement Prioritisation Model which uses a systematic, risk-based approach to asset replacement to help clients enhance the value of their equipment and facilities. We have already briefed clients on the Model, which we expect will be of great help in optimising resources in asset management.
The Chief Executive's pledge of government support for ten major infrastructure projects, as announced in the 2007/08 Policy Address, opens up a range of business opportunities for us. An example is the Guangdong-Shenzhen-Hong Kong Express Rail Link, on which we will serve as an independent consultant providing design review services. We look forward to also playing a role in the other new infrastructure projects, including the Kai Tak Development, the West Kowloon Cultural District, the Tuen Mun Western Bypass and Tuen Mun-Chek Lap Kok Link, and the Hong Kong-Zhuhai-Macao Bridge.
Our two highest-growth services, ICT and energy management, continue to gain momentum. Client departments are now increasing their energy efficiency and renewable energy projects, utilising their own budgets in addition to the Government's special five-year energy-efficiency funding launched in 2006/07, and I believe this revenue stream will continue. In ICT, much has been said about the growing need for the service within Government, in particular in managing IT systems and data security. Again, this is an area where growth will escalate. Indeed, we have already successfully obtained ISO 27001 certification on Information Security Management System for our Data Centre.
Turning to challenges faced during the year, rising cost was top of the list. We are fortunate in that demand for E&M service is not totally contingent on the ups and downs of the economic cycle. Yet, like all businesses, inflation can easily erode our margins. I have always been optimistic about the growth potential of our top-line revenue; given the size of our client base, modest growth per client results in considerable growth overall. However, we must also work on productivity so that our bottom-line results continue to improve. This will also help us more effectively manage our longer-term SLAs, where stability could lead to complacency.
In the year of the Beijing Olympics, we are honoured to provide ICT support to the Equestrian Events held in Hong Kong this summer, via a dedicated team of 160 EMSTF officers. In case of emergencies, we also provided contingency support to clients' critical systems in the hospital, transportation and public security sectors throughout the Olympics period.
Internally, 2007/08 also saw a breakthrough in our efforts to strengthen the career path for our Non-Civil Service Contract (NCSC) staff, a growing and valuable contingent of our workforce. With the introduction of a New NCSC Technician Scheme during the year, we hope to reinforce NCSC personnel's sense of belonging and provide a clearer career progression through Technician II, I and Senior Technician grades. The Scheme was received with enthusiasm. At the same time, as part of an overall government initiative, we have also resumed the recruitment of CS staff in certain job categories. The EMSTF business is unique in that it calls for a human resource pool that is both stable and flexible and with a wide range of expertise. We are confident that with the above measures, both the business and employees will stand to benefit.
I am optimistic about prospects for 2008/09 as the economy remains positive. Our ICT and energy management services continue to show enormous growth potential, and we are ready to seize new opportunities arising from technological advances and the surge in Hong Kong's infrastructure development. The replacement of aging equipment also offers opportunities as part of our engineering asset management service.
I have always been impressed by how the EMSTF team works with its stakeholders to achieve so much in the course of a year. On behalf of the EMSTF Executive Board, I wish to thank our customers for their support and our staff for their dedication and outstanding service. I look forward to another successful year in 2008/09.
Ho Kwong-wai
General Manager
Electrical and Mechanical Services Trading Fund
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