Legislative Council Panel on Economic Services Paper : Year 2000 Readiness in Government Departments and Organisations under the Purview of the Economic Services Bureau

Legislative Council Panel on Economic Services Paper : Year 2000 Readiness in Government Departments and Organisations under the Purview of the Economic Services Bureau

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PURPOSE

The purpose of this paper is to update Members on the progress of Y2K readiness in Government Departments and the Hong Kong Tourist Association under the purview of the Economic Services Bureau (ESB).

2. This paper covers the progress of the following Government departments and the Hong Kong Tourist Association:

Civil Aviation Department (civil aviation management) (CAD)
Marine Department (port management) (MD)
Electrical and Mechanical Services Department (energy supply, electrical and gas safety) (EMSD)
Hong Kong Observatory (meteorological service) (HKO)
Agriculture and Fisheries Department (food supply) (AFD)
Hongkong Post (postal service) (HKP)
Hong Kong Tourist Association (promotion of inbound tourism) (HKTA)

3. It also covers the progress of the container terminals and the energy supply sector comprising the electricity, gas and oil suppliers. Progress of Y2K readiness of the Airport Authority is the subject of a separate paper.

OVERVIEW ON PREPARATIONS FOR Y2K

4. Overall, substantial progress has been made for all the organisations listed in paragraph 2 since we last reported progress to the Panel. All of their mission-critical systems have been confirmed to be Y2K compliant. Contingency plans have been formulated and tested to deal with disruptions that may arise from Y2K failures. Progress has been regularly reported to the Information, Technology and Broadcasting Bureau. Efforts have been made to publicise progress on preparations for Y2K.

5. In order to provide a quick and coordinated response to Y2K disruptions on sector-wide level, sector-wide contingency plans have been formulated and tested for port management, energy supply, supply of fresh food produce and civil aviation. These plans are respectively coordinated by MD, EMSD, AFD, CAD and the Airport Authority.

DETAILED PROGRESS REPORTS

6. The following is a summary of the progress of preparations for Y2K readiness by individual Government departments, the Hong Kong Tourist Association, the container terminal operators and companies supplying electricity, gas and oil.

Civil Aviation Department (civil aviation management)

7. All the 104 mission-critical systems in the Civil Aviation Department (CAD) have been tested and verified to be Y2K compliant as from end June 1999. The Department recognises the importance of the quality assurance of its Y2K compliance work. In this regard:

CAD considers that the framework for managing its Y2K testing programme was adequate as all tests were carried out jointly by the system user, the CAD Engineering Section and the air traffic control (ATC) system maintenance contractor. There was adequate quality control particularly with respect to the test plans and results which were vetted regularly by a review group led by a senior officer;
On air traffic management, the importance of quality assurance was addressed among aviation authorities through regular regional Y2K Contingency Planning Task Force Meetings organised by the International Civil Aviation Organisation (ICAO). Furthermore, in November 1998, the Y2K Project team of the International Air Transport Association (IATA) visited CAD to review the Y2K readiness of CAD's ATC services. The IATA expressed satisfaction with the CAD's organisation and execution of Y2K work. CAD had adopted sound Y2K rectification approach and methodology and strong testing method.
The Information Technology Services Department (ITSD) inspected CAD's Y2K test programme and methodology in April/May 1999. Its assessment was that the CAD Y2K rectification work had progressed well and that CAD handled the Y2K programme seriously and recorded the work with full details.

8. CAD has put in place contingency plans and backup measures which are based on the framework recommended by the ICAO for the Asia/Pacific region. These have been promulgated to the airlines and aviation authorities. They include contingency air routes and ATC coordination procedures. Existing communications arrangements with the neighbouring ATC authorities have also been tested. Tests and drills on these plans and measures have been ongoing since August 1999. In addition, extra facilities/equipment such as alternative communications systems including satellite phones, personal computer-based message switching system and standalone backup radar display will be put in place by mid-November this year.

9. Although each organisation is responsible for the Y2K compliance of its own systems, the CAD Y2K Compliance Task Force continues to keep track of the Y2K compliance status of the safety and security related systems of Hong Kong's key aviation related organisations, including the Airport Authority (AA), Hong Kong-based airlines, helicopter operators and aircraft maintenance service agents. The compliance work of AA is reported in detail in a separate paper. The other Task Force members have reported that all their mission-critical systems had been tested and found to be Y2K compliant as from June 1999. These systems include the aircraft of the three major Hong Kong-based airlines. The Y2K compliance work for these aircraft is subject to the sample audits of CAD. The CAD Y2K Compliance Task Force is now focusing on the contingency plans developed by various Task Force members.

10. As regards the Y2K status of foreign airlines which regularly operate to or overfly Hong Kong, most of them have confirmed to CAD that their aircraft will be Y2K compliant before end 1999. For the few airlines which have yet to reply, CAD is seeking clarification from the relevant aviation authorities. The Department will also consider the mechanism to handle aircraft of foreign airlines which have not confirmed Y2K compliance before the end of 1999, taking into account any advice from the ICAO and the practice adopted by other major aeronautical authorities.

11. Since the civil aviation sector involves a large number of organisations in different disciplines, it would not be possible to have one single contingency plan to cover the entire sector. Sector-wide contingency plans are coordinated in two forums - one by CAD for the safety and security related systems and regional air traffic control and the other by the Airport Authority for the core airport operations. These contingency plans have been drawn up and drills have been conducted. More drills will be held in the next two months.

12. As part of the 9 September 1999 ("9999") rollover exercise, all key organisations in the aviation sector set up Y2K coordination centres to oversee the transition and report operational status to CAD for a consolidated 'aviation sector' report to the Government's Central Coordinating Centre. Drills to rehearse some of the contingency plans, e.g. the back-up communication arrangements, were conducted by individual organisations and witnessed by CAD as appropriate. No malfunctioning occurred on that day. Based on the experience gained, the Y2K contingency plans are being reviewed or fine-tuned by individual organisations. Further tests and training will also be carried out in the next two months.

13. As far as transparency is concerned, CAD has kept the members of the Y2K Compliance Task Force informed of the progress of its Y2K compliance programme and contingency planning. CAD has also disseminated information on the preparation of the aviation sector for Y2K transition to the public through various means such as press and TV interviews. CAD will set up a dedicated website on Y2K transition by end October 1999.

Marine Department (port management)

14. Marine Department has completed the rectification work of all their mission-critical systems since September 1999. An internal audit team is performing further audits on its Y2K project.

15. The Y2K Port Management Sector-wide Contingency Plan to deal with port operation disruptions being induced by Y2K problems has been completed since June. The plan was further refined following the tests and exercises held in July and August 1999. Emergency strategies have been developed with the objective of maintaining the safe and continuous operation of the port. All practical measures have been taken to minimise the risk of Y2K failures so that the Department will be in a position to react swiftly to any Y2K induced marine incident. This includes the activation of a crisis management team, reservation of emergency anchorages and setting up a backup traffic monitoring system together with an emergency port communication channel.

16. Large scale internal and external trials of the contingency plan were successfully conducted on 2 July 1999 and 12 August 1999 respectively. The Y2K Port Management Contingency Plan had also been implemented during the critical period on 9 September 1999 and the result is satisfactory. Further trials will be conducted before the millennium rollover.

17. To promote awareness and transparency to the public and shipping community, a dedicated website has been launched and a number of seminars have been organised to introduce the progress of the Y2K compliance programme, the port management sector-wide contingency plan, container terminal sector contingency plan and International Maritime Organization's recommendations to local shipping industry. These seminars have covered contingency arrangements and special port operation procedures.

Electrical and Mechanical Services Department (energy supply, electrical and gas safety)

18. The Electrical and Mechanical Services Department has completed rectification work on all mission-critical systems. EMSD has also drawn up an Energy Sector Y2K Contingency Plan, incorporating the industry-wide contingency measures of the power, gas and oil companies. Two drills have taken place and the plan was tested during the rollover to 9 September 1999.

19. EMSD has engaged two consultants to review its Y2K programme and to verify the Y2K test results. EMSD had applied the methodology similar to the consultants' and performed further internal Y2K audits.

20. Since mid 1998, EMSD has been regularly updating the development of Y2K issues in the department's Y2K web-site on the internet.

Hong Kong Observatory (meteorological service)

21. The Hong Kong Observatory has completed all rectification work on its mission-critical systems and these systems are now fully Y2K compliant. Further review is being carried out for added assurance. Contingency plans are in place to cater for any unforeseen problems with any of the department's operational systems, including meteorological services to the public and the aviation community, before, on or after 1 January 2000. The contingency measures include manual observation with conventional sensors; weather prediction based on HKO observational data and other meteorological information obtained via other means such as satellite broadcast from overseas centres and the internet; and dissemination of weather information, forecast and warnings by fax/hand to the Information Services Department, radio and TV stations, Civil Aviation Department and airlines. Progress of the Y2K programme has been made available in HKO's web page since early 1999.

Agriculture and Fisheries Department (supply of fresh food produce)

22. Rectification work for all the mission-critical computer, embedded and line communication systems in Agriculture and Fisheries Department (AFD) has been completed where necessary. All these systems are tested and verified to be Y2K compliant.

23. AFD assesses that the potential effect of Y2K-induced system failures on the supply of fresh food produce is expected to be minimal. It is because the majority of the fresh food produce consumed in Hong Kong are imported from the Mainland by road, railway and river boats or supplied by fishing vessels and the related operations do not rely heavily on computerised processing. However, the supply of fresh fruit, eggs and vegetables imported from overseas would hinge largely on the Y2K compliance of the systems at the container terminals and partly on that of the airport.

24. AFD has formulated a contingency plan to co-ordinate the various actions of the concerned Government departments and major fresh food produce importers and wholesalers to avoid possible disruption to the supply of fresh food produce in the event of Y2K-induced system failures. The contingency plan mainly involves close monitoring of the supply of fresh food produce, reporting of malfunction of computer systems, if any, at import points, and arranging for alternative sources of supply of fresh food produce. If there are indications that shortage of certain types of fresh food produce may develop, the Food Control Committee chaired by the Director of Agriculture and Fisheries and involving the concerned departments will be activated to implement appropriate measures to increase supply.

25. In early August, AFD briefed the major importers and wholesalers on the Y2K issue and asked them to stock up and explore alternative channels of supply in case of need. It will arrange similar meetings with them prior to the next high-risk dates (i.e. 1 January 2000 and 29 February 2000). AFD has provided information on the contingency plans at its website to enhance transparency.

26. AFD and the concerned departments tested the contingency arrangements through a simulated exercise on 12 August 1999. The test went on smoothly. The contingency plan was refined in the light of experience. Additional drills will be conducted on the contingency plan in the run-up to the millennium.

27. AFD runs a sector-wide coordinating centre on food supply at its headquarters during the rollover periods. The sector-wide coordinating centre collects feedback and assessment from various sources related to the supply of fresh food produce and reports the most up-to-date situation to the Central Coordinating Centre led by the Information Technology and Broadcasting Bureau. During the rollover period of the last high-risk date of 9 September 1999, the communication and assessment arrangements worked smoothly and effectively.

Hongkong Post (postal service)

28. Rectification work for all the mission-critical computer, embedded and line communication systems of the Hongkong Post (HKP) has been completed where necessary. All these systems are tested and spares verified to be Y2K compliant.

29. HKP assesses that the risk of a Y2K induced system failure in the department impinging on its services to the public is low. Nevertheless, it has formulated a contingency plan to ensure business continuity. The contingency plan mainly contains definitive criteria for activating contingency actions, which involve either transfer to back-up systems or switch to manual operation. The testing of the contingency plan, mainly through simulation, was completed on 15 August 1999 and the result was considered satisfactory. HKP has provided information about the contingency plan at its web site to enhance transparency.

30. The major business partners of HKP are postal administrations of other places/countries insofar as international mail is concerned. To HKP's knowledge, many of them are Y2K-ready. HKP will monitor the situation. Hong Kong Tourist Association (promotion of inbound tourism)

31. The Hong Kong Tourist Association (HKTA) achieved full Y2K compliance for its internal critical business components in end June 1999 as targeted. HKTA had involved Y2K consultants from the beginning of its Y2K Programme. Moreover HKTA has been publishing its Y2K position in the HKTA's website since April 1999. Contingency plans for its identified business components have been completed and tested. These contingency plans include, for instance, pre-arranging alternative means of communications, putting in place back-up personal computers and equipment, printing back-up hard copies of important database information, as well as switching to manual operation if and when necessary. Moreover, an overall Y2K contingency plan for these business components has also been developed and was tested in September. An Internal Y2K Command Centre was also set up in the same month. An Incident Management Information Centre which aims to handle visitor enquiries during the rollover is targeted to be set up by the end of October and tested by mid-December this year. Both centres would be activated during the Y2K critical dates.

CONTAINER TERMINALS

32. The container terminal operators are responsible for ensuring Y2K compliance of their mission critical systems. Hongkong International Terminals Ltd (HIT), COSCO-HIT, Modern Terminals Ltd (MTL) and Sea-land Orient Terminals (SLOT) have all attained Y2K compliance for their mission critical systems as from July.

33. Each of the container terminal operators has formulated their own contingency plans for each of their mission critical terminal operation systems. They have successfully tested their contingency plans, which include carrying out terminal operations without computer system support. In addition, all terminals have their own emergency procedures to handle various types of emergency to ensure a rapid return to service after disruptions, such as typhoons, in about three to ten hours time, depending on the severity of the storm.

34. In conjunction with the Port Management Contingency Plan (PMCP) prepared by the Marine Department, ESB has formed a port industry wide Task Group and formulated a subsidiary sector wide contingency plan focusing on the Container Terminal Sector and integrated with the PMCP. The plan has evaluated the potential Y2K risks and formulated emergency response strategies, such as spillover between terminals and diverting vessels to mid-stream or buoys to handle cargo. The contingency plans have been endorsed by the task group and distributed to the industry since June 1999. The plans have been tested on 12 August and executed on the first Y2K critical date on 9 September 1999 together with the port management contingency plan. No difficulties were experienced during these exercises. A contingency centre has been set up and will be put into operation on all Y2K critical dates to provide immediate response to any Y2K disruptions. Further exercise is planned for later in the year before the rollover to increase Y2K contingency readiness as the critical date approach.

35. The plan has been launched on Marine Department's dedicated Y2K web-site and introduced to the marine community in seminars.

ENERGY SUPPLY SECTOR

36. This section covers the following companies -

The Hongkong Electric Co., Ltd (HEC)
CLP Power Hong Kong Ltd (CLP Power)
Hong Kong Nuclear Investment Co. Ltd (HKNIC)
The Hong Kong and China Gas Company Ltd (HKCG)
The five oil and liquefied petroleum gas (LPG) suppliers.

37. The electricity, towngas and oil suppliers have reported that their mission-critical systems are fully Y2K ready. They are confident that their systems will operate during the Y2K period, however, contingency plans have also been in place to cope with unexpected difficulties.

38. Officers of the Electrical and Mechanical Services Department (EMSD) are maintaining close liaison with all of the companies concerned over Y2K compliance and have visited the companies to examine their compliance programmes and contingency plans. Regular progress reports are sent to the Information Technology and Broadcasting Bureau in line with the standard reporting procedures. Relevant information about the power and towngas companies could be found on their respective websites.

The Hongkong Electric Co., Ltd

39. HEC reported that all rectification work on their computer systems and embedded systems had been completed and that these systems were Y2K compliant as of 30 June 1999. The compliance status of all of the systems concerned has been verified through thorough testing. The tests included setting forward the system clocks of generating units to December 1999 and operating the units in normal production use for more than 60 days.

40. HEC's contingency plans against Y2K-induced problems in different functional areas have been in place since May 1999. They have been tested in August 1999 and their validity has been confirmed. An integrated company-wide contingency plan to deal with any Y2K-induced incidents has also been drawn up and was tested for its validity in August 1999. Additional drills and training will be conducted in the next few months. HEC will run four generating units during the rollover period, providing more capacity than is needed to meet normal demand in winter time. Of these, three have analogue controls (which have no digital components), and are therefore not at risk from Y2K. During the rollover period, HEC will set up a Y2K co-ordination centre equipped with diversified communication systems, double the operational staff at Lamma Power Station and have engineers standing by at all zone substations to ensure fast response to any unforeseen events.

41. All aspects of HEC's Y2K preparations have been reviewed by independent consultants. The review concluded that HEC's compliance programme was appropriate and satisfactory and that the risk of having serious disruption of operations due to date-related failure of any of HEC's systems was very low.

CLP Power Hong Kong Ltd

42. CLP Power reported that all rectification work had been completed and that all of their electricity supply and delivery and other operational and business systems were Y2K ready as from 22 June 1999. The compliance status of all of the systems concerned has undergone thorough testing, including the setting forward of the system clocks of generating units. The preparations have been reviewed by the company's internal auditors and independent consultants. The independent consultants concluded that CLP were 100% Y2K ready and were in a position to effectively deal with any Y2K-induced issues that might arise.

43. CLP Power have put in place contingency plans against Y2K-induced problems in different functional areas and an integral company contingency plan since end-June 1999. Training and drills have been carried out. Demand on CLP's system during the rollover period is expected to be about one-third of the available generating capacity. The demand will be met from separate power stations, using a variety of fuels and generating technologies, so as to minimise the risk of a single failure causing a major reduction of electricity supply. Standby spinning reserve will be increased substantially. Engineers will be on standby at critical system facilities. On-site and standby engineering and operational staff will exceed 1,500 people. Diversified communication systems will be used.

44. CLP Power have also maintained close liaison with HKNIC, with whom they are interconnected, on Y2K readiness efforts at the Guangdong Nuclear Power Station.

Hong Kong Nuclear Investment Co. Ltd

45. HKNIC reported that the Y2K readiness programme for the Guangdong Nuclear Power Station (GNPS) has been prepared by specialist teams with support from technical, internal audit and quality assurance teams within the Guangdong Nuclear Power Joint Venture Company (GNPJVC) and is based on international guidelines and practices. According to HKNIC, the GNPS is 100% Y2K ready. HKNIC also reported that nuclear safety at the GNPS would not be affected by the Y2K issue. Whereas Y2K is a computer-related issue, the operation of the nuclear safety protection functions in the GNPS does not require a computer. The protection function is activated by events and not by time. Y2K issues, therefore, could only affect plant availability, not safety. The Y2K readiness work at the GNPS have been reviewed by the International Atomic Energy Agency, the National Nuclear Safety Administration and an independent consultant from the United States of America. The reviews endorsed the Y2K readiness programme and the quality of the work at GNPJVC.

46. An integrated contingency plan has been in place since June 1999 and was satisfactorily tested in September 1999. Again, the plan has been reviewed by the International Atomic Energy Agency and the National Nuclear Safety Administration. During the millennium rollover, one of the generating unit will be on a scheduled shutdown for refuel and maintenance, while the other one will operate at reduced power. The station will have 100 more staff on standby and have multiple means of communication. Work will continue to train GNPS personnel, conduct drills and refine the contingency plan throughout the remainder of 1999.

The Hong Kong and China Gas Company Ltd

47. HKCG reported that their compliance programme was planned and implemented based on international standards. All rectification work on systems relating to the safe and reliable supply of gas, customer services and internal systems has been completed and these systems were Y2K compliant from 30 June 1999. The compliance status of all of the systems concerned has been verified through testing. The tests included setting forward the clocks of critical systems in the gas production plant, the pressure monitoring system of the gas distribution network and the information systems. HKCG's Y2K compliance programme has been reviewed by the company's internal auditors, EMSD and independent consultants and assessed to be appropriate and satisfactory.

48. HKCG have produced contingency plans to cope with any Y2K-induced problems in different functional areas. Under the witness of EMSD, the validity of these plans was tested in May and June 1999 and the testing result was satisfactory. The company-wide contingency plan has been in place since August 1999. It has been drilled and confirmed adequate on the first Y2K critical date (i.e. transition from 8 September 1999 to 9 September 1999). HKCG have arranged for additional supplies of fuel for their back-up power generators in the unlikely event of loss of electricity supply. During the rollover period, an emergency control centre will be set up and more than 1,100 staff will be on standby at different critical points in the towngas network. A recovery plan for resumption of gas supply has been prepared for use in the unlikely event that gas production is interrupted as a result of Y2K-related problems.

Oil and LPG Suppliers

49. All the five oil/LPG suppliers operating in Hong Kong reported that they achieved 100% Y2K compliance and their business contingency plans were ready as of 30 September 1999. EMSD have attended drills carried out by the oil companies in connection with simulation of Y2K rollover and their contingency plan. In addition, during August and September 1999, EMSD approached and visited the oil companies on their Y2K contingency plans and examined the reports of the audits conducted by their parent companies to assure that the coverage of the contingency plans and audit reports are in order. The whole assurance exercise is scheduled to be completed by the end of October 1999.

Sector-Wide Contingency Planning

50. EMSD will set up the Energy Sector Co-ordination Centre (ESCC) at its Headquarters during the Y2K critical periods to facilitate communication within the energy supply sector and to assist the Central Co-ordinating Centre of the HKSAR Government to monitor the sector.

51. To further enhance the reliability of supply of energy for the whole community, companies of the same industry have got together to develop sector-wide Y2K contingency plans. The two electricity supply companies have developed a plan with the objectives to maintain uninterrupted supply of electricity in Hong Kong and, in case of power outage, to resume the services as quickly as practicable. For towngas supply, as HKCG is the sole supplier in Hong Kong, their contingency plan forms the sector-wide contingency plan.

52. In mid-August 1999, EMSD assisted the oil industry to work out the sector wide contingency plan for the industry. During the meetings, the oil industry agreed to incorporate the oil industry's current "borrow and loan" practice in the sector-wide contingency plan for several critical petroleum products. As for LPG supply, the usual stock cylinder LPG and bulk LPG supply in housing estates would last for more than 2 weeks and 4 days respectively. However, all oil companies have agreed to keep one-day additional stock at their terminals to meet emergency requirement.

53. The industry would also advise their customers to top up the diesel tanks for standby generator sets before the rollover. To cater for the scenario of prolonged power supply outage, contingency plan for diesel fuel delivery would be put in place and such a plan is being finalised by the industry, Government and parties concerned.

Annexes

54. Detailed progress reports provided by the various energy supply companies concerned are attached as Annexes to this paper.

Economic Services Bureau
October 1999