Secretary for Financial Services and the Treasury Christopher Hui said the start of pre-retirement leave from Friday by the head of the Government Logistics Department, Carlson Chan, was a "normal arrangement".

Chan had been in charge of the department when a contract for the supply of bottled drinking water to government offices on Hong Kong Island and some outlying islands was made. The contract has since been terminated.

The contract, which was for a period of three years, had been awarded to a company that is alleged to have used fraudulent documents to win the government procurement exercise that was worth HK$52.9 million.

The latest government gazette showed Chan has ceased to be the director of the logistics department and that his deputy, Avia Lai, succeeds him for the time being.

Speaking after attending a radio show, Hui, who is leading a task force to review the tender exercise, said follow-up work was still ongoing.

"This arrangement is seen as a normal one, as the current situation regarding the government's procurement process of bottled water is being addressed on three fronts," he said of Chan's pre-retirement leave.

"These include follow-up work by the Government Logistics Department, a review by the Audit Commission, and, at my level, a dedicated team is conducting a systemic and institutional review.

"We are currently working according to this timeline and direction."

When asked if Chan would be held accountable for any shortcomings or negligence that may come to light later, especially after Chief Executive John Lee announced in his Policy Address this week that authorities will set up a new accountability system for heads of government departments, Hui noted that there are existing mechanisms in place to deal with the consequences of actions taken by civil servants at different levels.

He stressed that a key focus for the time being is to have an independent third-party review from the Audit Commission to assess the matter.