8th April, 2014
Civil Aviation Department Purchases Faulty System – Alleged Transfer of Benefits
In 2011, Civil Aviation Department (CAD) purchased Raytheon’s Autotrac3 system at USD62 million. The implementation of the system, however, has been delayed multiple times. Even after injecting extra funding of over USD12 million to modify the system, it is yet to be implemented due to the quality of the system. It is found out that when the supplier won the CAD’s bid, the system had yet to establish a credible track record. Peter Leung Pui-kwong, a senior member of CAD that was responsible for reviewing the bids at the time, joint Raytheon’s Hong Kong contractor after he left CAD. Lawmakers questioned about the possibility of transfer of benefits in this case and urged the authority to investigate.
A retired electronics engineer from CAD who was involved in the move of airport from Kai Tak to the current site said that it is CAD’s procurement principle that it will only purchase systems that have proven track record and are safe to use. During the tendering period, Autotrac3 had only been tested in the New Delhi airport, where six serious failures were recorded during the 15 months long trial period.
Autotrac3 which cost CAD USD62 million was scheduled to be used in 2012. However, the implementation day has been postponed repeatedly until 2015. The retired engineer said that CAD’s tenders always specify that “system” includes both software and hardware, and suspected that in the tender in question only mention software, which means it lowered its standard. He questioned that, “there is no way that CAD did not know there are problems with the system (Autotrac3), one cannot help but think that it involved under-the-table deal.”
An internal committee of 11 senior electronics engineers and traffic control officers was set up at CAD to manage the tender. Peter Leung Pui-kwong, the then Chief Air Traffic Control Officer, was one of the committee members. CAD hired Leung on a contract basis after he retired from the department. He joint the committee soon after he took up the contract role. Soon after the committee decided to purchase Autotrac3, Leung left the CAD in 2012 and joint Chinney Alliance Engineering, Raytheon’s contractor in Hong Kong.
A call was made on 28th March trying to reach Leung at Chinney Alliance Engineering, the call was transferred to the company’s General Manager Mr Yam. He admitted at first that “Mr Leung has some relations with the company.”
When asked about Leung’s potential conflict of interest in Raytheon’s successful bid for CAD’s tender, Yam immediately revised his statement, “I am a friend of his, and I know him”. However, Yam refused to confirm if Leung is a member of staff. Enquiry to Raytheon did not receive any response.
According to source, Leung’s new role at Chinney Alliance Engineering is to train the staff at CAD to use Autotrac3, which he had informed CAD. In response to enquiry, CAD said that Leung retired in 2006 and was a civil servant with a Directorate Pay Scale at D1 (highest level). He was later on appointed as a contracted non-civil-servant employee by the CAD between September 2006 and August 2012. After he finished his contract in 2009, he retired from CAD and that he is no longer required to gain approval from CAD to work for private companies.
Lawmaker Claudia Mo Man-ching commented that, “(they) claim that this is not monitored by regulation, but does that mean (Leung) did not need to avoid arousing suspicion (conflict of interest)? I wonder if CAD understand the law intent for declaration of interest.” Mo said that she will seek to follow up on the case at the Legislative Council. Albert Chan Wai-yip from Peope’s Power said that he received a complaint from a citizen who is familiar with CAD’s operation, questioning the procurement procedure. Chan wrote to CAD repeatedly based on the complaint but CAD muddled through without providing answers. “With such a long delay, it could only be caused by lack of professional knowledge, negligence and/or corruption.”