Fiscal Performance

We are happy to report that during 1999/2000, the Electrical and Mechanical Services Trading Fund (EMSTF) recorded another year of positive business performance, whilst also making significant progress and improvements in customer service, productivity and quality.

Despite phase one "untying" which began in August 1999, new business gained has far outweighed the limited amount of business lost to competitors, and overall results have surpassed those of 1998/99. The fiscal year ended with a turnover of $3,060 million (1998/99: $2,913 million), representing a healthy 10.9 per cent return on revenue.

Productivity Gains

During the fiscal year, we recorded a further productivity gain of 5 per cent, which has been passed on to clients in the form of price reductions. We are proud to report that EMSTF has already achieved the targetted 15 per cent cumulative productivity gain in the first three years of operation since August 1996, and continued to achieve another 2.5 per cent productivity gain in the second half of 1999/2000.

However, in a fast changing environment we cannot be complacent. Running a viable operation is only one of our objectives. Our other priorities centre around satisfying the needs of our customers and, on a more macro level, finding ways to help build a better community through the excellent servicing of our clients.

Helping Clients Meet Their Goals

As a government body ourselves, we are sensitive to the impact of Government's Enhanced Productivity Programme which requires all government departments to enhance productivity by five per cent in three years. As EMSTF had an early start in its productivity enhancement programme, we have gained some experience and are well positioned to help clients achieve their efficiency targets with innovative solutions.

One example is our long-term Service Level Agreements whereby customers can enjoy our services at very attractive prices as a result of better economies of scale and improved resource management. This has proven popular with several key customers, and we look forward to extending the plan to other clients.

In fact, over the past few years EMSTF has already made a wide variety of tools and methods available to help clients become more productive. Our annual price reductions provide direct cash savings for customers who continue to enjoy a better and wider range of services. Our good performance indicators also point to greatly reduced downtime in clients' plant and equipment. Our Work Improvement Teams and Business Process Improvement Teams, which have been in place for years, are a major source of creative ideas to streamline and improve work processes that relate to the optimum performance of client's plant and facilities.

Quality and Y2K Achievements

During the year we became the first government department in Hong Kong to obtain the ISO 9001 Corporate Certificate, and we are well on our way to achieving ISO 14000 certification with regard to our environmental practices. We have also successfully helped clients to navigate their complex Y2K issues extremely smoothly. Our client manager system has been overhauled to improve communication with customers. We have also brought in consultants to critically review our business strengths and strategies for long-term planning, and will start a Total Quality Management programme to deepen and align the quality cultures within the organisation.

Business Prospects

Looking forward, we are confident that EMSTF will continue to see steady growth. The satisfactory results in 1999/2000 can be attributed to prudent management, pro-active marketing, disciplined cost savings, focused customer services and thorough planning in staff re-training and deployment. Whilst there was some business loss, affected employees demonstrated very positive attitudes and lost no time in learning new skills for new assignments, a sign that our cultural changes have truly taken root. The second phase of "untying" is scheduled for August this year, but with prudent planning, diligence and discipline, we believe we are ready for the challenge.

Building a Better Community

Business aside, we never stop asking ourselves what EMSTF can do towards the building of a better community. The answer lies in our ability to advise clients to adopt engineering solutions which are more environment-friendly, energy efficient and safe.

In this regard, EMSTF is launching an Indoor Air Quality pilot programme on selected client premises to benefit all who work in or visit these buildings. We are also helping hundreds of schools to install IT rooms and multi-media learning centres for their tens of thousands of students.

Our colleagues in Regulatory Services are also contributing to the community, including the application of energy efficient water-cooled air conditioning systems, for buildings in both existing and newly formed districts. They also play an active role in providing technical and safety support to the infrastructure development of the LPG vehicle schemes. Their expertise will inevitably benefit the public in creating a better quality of life.

Appreciation

1999/2000 has been a good year for EMSTF and I wish to thank all our staff for making this possible. Without their hard work and support, we would not have achieved so much in the fast changing external environment, which has created many additional challenges for us all. I also wish to thank our customers for their patronage and support, and our consultants and contractors for the contribution of their knowledge, insight and efforts. With your continued support, we look forward to another year of success.