Lead story Main feature Quality column Editor's note


VoiceLink discussed the Trading Fund and the benefits of the untying process with EMSD's Trading Services Manager, Mr. K.W. Ho. Mr. Ho discussed the process, the benefit to customers, as well as some common misconceptions encountered along the way.

Q. Why was the Electrical and Mechanical Services Trading Fund established and what does "untying" mean?


The Electrical and Mechanical Services Trading Fund was established as a result of public sector reform undertaken by the Government in the early 90s. The aim of the Trading Fund is to model our operations on commercial principles, enhance our cost effectiveness and ensure full accountability for our activities.

Ho Kwong-wai Trading Services Manager, EMSTFThe Fund was established in August 1996. In the past three years we have had a period of adjustment, reorganising and restructuring for the competitive environment and the challenges ahead. In August this year we moved into the next phase of the scheme, when we began the "untying" process which opens up the public sector market. "Untied" customers can choose to keep on using EMSD or their own E & M supplier in a competitive environment. About 25% of our existing business was "untied" in August 1999, with subsequent phases taking place every following year until 2002, when the process will be complete. When this happens, we will be operating in a highly competitive environment.

I would like to stress that for customers, who would like to continue using our services, it will be business as usual. They will not be affected in any way nor will they have to do anything to continue enjoying our services.

Q. Won't this process confuse your customers? Will the benefits outweigh this confusion?


Change can be confusing but we have been careful to manage this change, keeping our customers fully informed of developments, what the new environment will mean and most important of all, how this new process will benefit us all.

First and foremost, being accountable for our activities means that we have to be open with customers. Secondly in a competitive environment, our prices have to be in line with market prices and our services have to be among the best in Hong Kong. This translates into quality and more cost-effective services for our customers all round.


You mentioned that customers will have a choice of supplier once they are untied. Why would they choose to retain your services?

A. Customers are choosing to retain our services for a number of reasons.

  • As part of the civil service we offer an impartial and unbiased service. We have total independence to offer the best solutions to our customers without any need to consider proprietary brands or equipment. We also understand government procedures and tender processes and are able to provide our customers with invaluable help in this direction.

  • While the Trading Fund is financially independent and responsible for its resources, our goal is not to maximise profits but to provide the best possible services to customers. This gives us a pricing advantage in comparison to a commercial organisation.

  • We have over 50 years of experience in the business providing reliable, professional and quality services. With 160 qualified engineers and 4,000 highly skilled technical staff, we have one of the largest and most professional teams in Hong Kong.

  • Over the years we have also built up a store of knowledge and expertise that is unique in Hong Kong - our work in the highly specialised field of medical electronics at Hong Kong's hospitals and some of the airport systems for example, is unmatched in Hong Kong.

  • We also offer a range of value-added services - we offer 24-hour emergency services throughout the territory as well as consultancy on energy management and indoor air quality.
    These factors translate into positive benefits for our customers who also recognise the quality of service that we provide. Over the years, we have also built strong partnerships with our customers, often working side-by-side to create the best solutions.

Q. Can you give an example of how the Trading Fund has actually benefited customers?


Obviously, we have done a great deal of work within EMSD to meet the demands of the new and competitive environment. We have looked at best practices around the world, reorganised our operations to ensure customer-oriented services, reviewed our pricing structures to ensure their competitiveness and focused on improving productivity and efficiency.

When the Trading Fund was set up in August 1996, a major goal was to increase productivity by 15% over three years. Overall productivity improved by 12.5% in March this year. This saving has been passed directly on to our customers, costs for the same level of work in the past three years have actually come down by 12.5% in real terms. We have reviewed our productivity goal, with a view to further improvement in the coming years. This saving will also be passed on to customers.

Q. Is there any concern that the untying process will lose you customers?


I think that this is a major concern in any competitive and commercial organisation. Having said that, I believe competition is a positive process as it drives us to manage our operations in the most cost-efficient and productive way possible while offering the best possible services to our customers. The process has made us take a good look at ourselves to ensure that we are comparable to the best that the market has to offer.

With the untying, some customers will obviously try new suppliers but we always have the opportunity to tender for the work. Our goal is to be the preferred service provider in the public sector. We are therefore very pleased to have won many of the contracts that we have bid for in the past few years. Our Airport Sector Division is a prime example. We currently manage and maintain various operations at the airport under 12 contracts, 10 of which were won in a competitive environment.

The competition will keep us on our toes as we focus on retaining our customers, growing our existing business and securing new business.

Q. Are there any misconceptions about the Trading Fund?


There is a genuine concern among some customers that our prices are high or will rise as the Trading Fund funds its activities. However, as mentioned, the Trading Fund is not a profit-driven organisation. The number of tenders that we have won recently indicate that our prices are competitive and well in line with the market. Prices are also coming down in real terms as cost-efficiencies and productivity gains are reflected back to customers. I would also like to stress that the quality and professionalism of our services together with the value-added benefits offered, provide value-for-money services which will save customers' costs in the long-term.

Back to top