The department has been pursuing cost-effective outsourcing to meet the government's initiative for increased private sector participation in the provision of public services. The outsourced services include cleansing, security guard, horticultural maintenance and sports centre management. By the end of 2004, the total value of these 124 outsourced contracts undertaken by 53 contractors amounted to $1,202 million. These contracts covered both leisure and cultural facilities in all 18 districts. The on-going programme of outsourcing is one of the key means to enhance the department's efficiency and to achieve savings.

In drawing up its plans, the department follows a pre-determined set of principles:

• it must be cost-effective;
• the standard of service must not be lowered;
• the contract is commercially viable; and
• there should be no staff redundancy.

Since 2000, the Department has contracted out the management services of 10 sports centres. The objectives of contracting out the management services of sports centres are to deliver quality services to the public in a more cost-effective manner and make use of the private sector's expertise in the management of these facilities. The 10 sports centres that have been contracted out are the Jockey Club Tuen Mun Butterfly Beach Sports Centre (2000), Quarry Bay Sports Centre, Island East Sports Centre, Chun Wah Road Sports Centre, Cheung Sha Wan Sports Centre and Chuk Yuen Sports Centre (2001), and Choi Hung Road Sports Centre, Wo Hing Sports Centre, North Kwai Chung Tang Shiu Kin Sports Centre and Ap Lei Chau Sports Centre (2004). Also in 2004, the department contracted out the customer support service at the Hong Kong Heritage Museum.

	Visitors to the Hong Kong Heritage Museum take advantage of the customer support service, one of a number of services outsourced by the LCSD.

The department is proceeding on an outsourcing exercise for URBTIX's back-end ticketing system and related services targeted to be launched in mid-2006, under which an advanced ticketing system with full Internet ticketing functions and telephone booking by credit cards as well as provision of customer-oriented screen displays would be delivered and maintained by a private ticketing services provider under contract. However, the Department will retain the front-end ticketing financial control, administration and manpower support necessary to maintain the high quality operation of the ticketing outlets at its various performing venues.

Contract Management

In order to maintain the quality standard of outsourced services, we have adopted an outcome-oriented approach and made strenuous effort in monitoring services rendered by contractors. Regular meetings with contractors, both at working and senior management levels, are arranged to ensure continuous improvements by the contractors.

In the event where unsatisfactory services are observed, contractors are urged to rectify the problems immediately. For those who have committed repeated defaults, their poor performance will have adverse effect on their future standing as our contractor.

We also place much emphasis on safeguarding the interests of workers engaged by contractors. For cases on suspected exploitation of workers, we will refer the suspected breaches of employment-related statutes to the Labour Department and/or the Mandatory Provident Fund Schemes Authority for investigation and provide assistance where necessary. If a contractor is found to have been convicted of any employment related offence, we will consider terminating the contract and claim against the contractor for its default.

To ensure the existence of an open and fair competition environment for our prospective tenderers, we will review our tender assessment criteria while incorporating risk management measures in contract management from time to time.