Public Works Subcommittee

Record of Meeting held on 7 February 1996 at 10:45 am
in the Legislative Council Chamber

Present:

Non-PWSC Member

Absent:

In attendance for specific items:

Mr R D ROPE, JP	Director of Lands
Dr E W BRAND, JP	Director of Civil Engineering
Mr K S LEUNG, JP	Director of Highways
Mr S S LEE, JP	Director of Territory Development
Mr M S HU, JP	Director of Water Supplies
Mr Kenneth CHAN, JP	Director of Architectural Services
Mr F P WONG	Deputy Government Property Administrator
Mr Y Y NG, JP	Director of Drainage Services
Mr C D B WILLIAMS, JP	Assistant Director of Home Affairs
Mr N J FRENCH, JP	Secretary-General of University Grants Committee
Mr Tony REYNALDS	Principal Assistant Secretary for Education & Manpower
Mr C K TAM	Principal Education Officer (Hong Kong)
Mr Clement CHEUNG	Principal Assistant Secretary for Health & Welfare
Dr FUNG Hong	Senior Executive Manager of Hospital Authority
Mr Paul WONG	Assistant Director of Social Welfare (Subventions)
Mrs Teresa LOK, JP	Assistant Director of Information Technology Services (Management Consultancy Services)
Mr P N CLIFT	Chief Estate Surveyor/New Airport (NT) of Lands Department
Mr Carlson CHAN	Principal Assistant Secretary for Home Affairs
Mr Martin CHEUNG	Chief Civil Engineer of Housing Department
Mr John COLLIER, JP	Deputy Secretary for Works (Works Policy)
Dr A W MALONE, JP	Principal Government Geotechnical Engineer
Mr Paul TANG	Deputy Director of Administration

In attendance:

Mr B P W LEUNG, JP	Secretary for Planning, Environment and Lands
Mr H S KWONG, JP	Secretary for Works
Dr S B REED, OBE, JP	Director of Environmental Protection
Mr Kevin HO, JP	Deputy Secretary for the Treasury
Mr Mike ARNOLD	Principal Assistant Secretary for the Treasury (Works)
Mr Andy LAU	Clerk to the Public Works Subcommittee

Members noted that Mr CHENG Kar-foo had resigned from the Public Works Subcommittee (PWSC) as from 5 February 1996.

2. Members agreed to defer the consideration of PWSC(95-96)86-96 to the latter part of the meeting.

Upgrading of projects to Category A
HEAD 707 - NEW TOWNS AND URBAN AREA DEVELOPMENT

PWSC(95-96)83

424CL

North Lantau Phase II B development in Tung Chung, engineering works

3. A Member pointed out that in discussing similar proposals in the last session, the Administration had undertaken to review the village removal policy. But so far, no action had been taken on the part of the Administration. He therefore reminded the Administration to speed up the review.

4. Members noted that the unit cost of the village resite houses was higher than that of small houses in the New Territories. The Director of Architectural Services explained that the two types of houses were different from each other in terms of size and design. The estimated cost was only used for budget purposes and the final tender price would be subject to a competitive bidding process. He would provide further information on the standard design of the village resite house.

5. This item was voted on and endorsed.

PWSC(95-96)85	109DS	Provision of sewers and sewage treatment plants in rural areas in the New Territories
	18HH	Village Improvements and development schemes in the New Territories
	446TH	Improvement, reconstruction and extension of village access roads in the New Territories

6. A Member pointed out that whilst he, in principle, supported the proposed minor improvement works for the benefits of residents in rural areas, he expressed grave concern on the on-going need to use public funds to maintain facilities within the internal boundaries of villages which should be the responsibilities of the individual property owners as in the case of private developments.

7. In reply, the Assistant Director of Home Affairs (AD/HA) advised that the Rural Planning and Improvement Strategy (RPIS) was not intended to benefit any specific individuals or land owners but aimed at improving the rural environment as a whole. In this regard, infrastructural development and environmental improvements works would be carried out in accordance with the priorities set out by the District Working Group comprising government officials, local representatives and District Board members.

8. This item was voted on and endorsed.

PWSC(95-96)84

21HH

Local public works in the rural New Territories (1992/93 - 1996/97) Programme

9. A Member reiterated his concern about the need for the Government to bear the cost for carrying out improvement works within the internal boundaries of villages. He cited an example in the paper where the Administration was to provide communal letter boxes at Pai Min Kok Village. He questioned the rationale for using public funds to undertake works which normally should be the responsibility of individual property owners. In reply, AD/HA pointed out that whilst he had no information at hand about this particular project, he advised Members that the proposal was supported by the District Board concerned. He would provide further information on the related policy under RPIS.

10. This item was voted on and endorsed.

PWSC(95-96)98

37WC

Water supply to Tseung Kwan O

11. A Member noted that the proposed system could only cater for the demand generated by the development of the town up to 2001 and questioned whether shortly after the completion of the present project, the same sections of roads would be subject to re-opening for further expansion. In reply, the Director of Water Supplies assured Members that the capacities of the trunk watermains to be laid under the project would be adequate to cater for future expansion in the area. Hence, there would be no need to dig up again the sections of roads covered in the project for subsequent watermain improvement works.

12. This item was voted on and endorsed.

Revision in scope/approved estimates of project in Category A
HEAD 705 - CIVIL ENGINEERING

PWSC(95-96)99

51BL

Systematic identification and registration of slopes

13. In response to a Members question on the need to engage consultants rather than creating civil service posts to undertake the proposed works, the Principal Government Geotechnical Engineer (PGGE) advised that the present proposal was relatively short-term in nature, aiming at compiling a comprehensive Catalogue of Slopes involving some 50,000 man-made slopes by late 1997. It was part of the on-going Landslip Preventive Measures programme. The Administration would separately bid for the necessary manpower resources in the context of the annual resource allocation exercise. As far as the present funding request was concerned, there was a need to employ additional consultants and technical staff for the identification and registration process to cope with the additional 20,000 man-made slopes in the territory within schedule. In response to a Members question, he confirmed that the consultants field staff were all employed on local terms.

14. As regards the basis for calculating the estimated cost of the consultancy, PGGE advised that the present estimate was based on the actual cost of the existing consultancy and a factor of 2.0 (x salary cost) was adopted. He explained that the various factors used in estimating consultancy costs were derived from the past average figures, and were used for budget purposes only. The actual fees would be subject to open tender exercises. Generally speaking, a factor of 2.5 was adopted if the consultants staff were seconded to work in government offices and a factor of 3.0 was used when the consultants were required to provide their own office accommodation. Members noted that the Administration would provide a discussion paper to the Committee on this subject soon.

15. Members pointed out that in the present case, an open tendering exercise should be conducted to ensure fair competition. PGGE advised that whilst there was no firm decision at this stage as to whether the contract should be granted to the existing consultants or opened up for competition, there were pros and cons for both options. The Administration would shortly put up the case to the Engineering and Associated Consultants Selection Board for consideration.

16. This item was voted on and endorsed.

Upgrading of projects to Category A
HEAD 703 - BUILDINGS

PWSC(95-96)97

New item

Purchase and fitting-out of office accommodation for the Legislative Council

17. Members noted that the proposal had received the support of the Legislative Council Commission.

18. On the cost of the procurement, Members noticed that the unit cost was estimated to be over $10,000 per square foot and enquired if this was comparable with the prevailing market price. In reply, the Deputy Government Property Administrator (DGPA) advised that prices varied with the nature and location of a property. The estimate represented a median figure for Grade A offices in the vicinity of the LegCo Building. The figure was for budget purposes only and the final price would be determined by the market supply and demand.

19. A Member noticed that the option of leasing additional accommodation would possibly incur an estimated annual cost of $85 million and considered this to be on the high side, especially in comparison with the current rentals of $30 million for the separate offices of the LegCo Secretariat. In reply, DGPA advised that the figure was an estimate of what it could cost if it was decided to rent first class office accommodation and included the costs of initial fitting out and reinstatement upon expiry of the lease. The Deputy Director of Administration (DDA) added that the higher rental estimate had taken into account the provision of additional office space for the Secretariat. Comparatively speaking, the procurement option would be more cost-effective.

20. Members pointed out that once the new accommodation was ready for use, priority should be given to vacating the staff offices in the LegCo building so that necessary renovation works could be carried out at once to increase the conference facilities in the LegCo Building. In reply, DDA advised that without knowing the amount of floor space that could be procured in the market and when the premises would be available, it was difficult to work out at this stage the moving-out plan for the LegCo Secretariat. However, the Administration would liaise closely with the Secretariat with a view to arriving at an acceptable timetable. He undertook that the Administration would not unilaterally terminate the leases of LegCos offices in Swire House and the Club Lusitano Building.

21. This item was voted on and endorsed.

NON-AIRPORT CORE PROGRAMME
Capital Works Reserve Fund

PWSC(95-96)86 to PWSC(95-96)96

Block allocations for Heads 701 to 711

22. Members noted that in addition to the individual papers for each of the Capital Works Reserve Fund (CWRF) Heads of Expenditure, the Administration had provided an information note PWSCI(95-96)35 providing further background information on the proposals. As papers PWSC(95-96) 86-96 were related to the individual block allocations under the CWRF, Members agreed to discuss some fundamental policy issues in relation to the information note before considering individual proposals.

23. A Member pointed out that though PWSC had been performing a role in monitoring public expenditure, it did not, in one way or another, impose any kinds of barriers which would obstruct the functioning of the Administration. The Administration was always welcome to put up proposals for consideration by the Committee to address any problems of underspending. As such, the alleged underspending was simply a reflection of the Administrations failure in putting up proposals for virements or increase of project votes. He therefore questioned the justifications and need for delegating to the Financial Secretary the power to authorise expenditure under the CWRF Heads of Expenditure.

24. In reply, the Principal Assistant Secretary for the Treasury (Works) (PAS/Tsy) clarified that the present proposal was not intended to alter the limits on the delegations to the Secretary for the Treasury to expend money under the block allocations of the CWRF but rather to address the problem of underspending as experienced in the past. He pointed out that some of the departments were reluctant to make a formal submission to the Finance Committee (FC), via the PWSC, for additional funds given the administrative processes that had to be followed. Projects were often put on one side and included in the next annual funding exercise for the CWRF block allocations. The result of this was underspending on the block allocations as a whole. The present proposal was intended to address this issue by reducing the number of block allocations under each Head and combining them into larger comprehensive block allocations so as to simplify the administrative procedures. The net outcome would be the more efficient use of public monies under the block allocations. Members would still retain their authority to decide on the amount of money to be set aside for each block allocation as the Administration would continue to seek Members approval, as now, on an annual basis. In response to a Member's question about the use of funds remaining unspent at the end of the year, PAS/Tsy said that any unspent monies would be retained in the CWRF for allocation in the following financial year.

25. As to whether improvements to underspending would give rise to new monies for expanding other public and social services, the Deputy Secretary for the Treasury (DS(Tsy)) advised that the underspending problem affected financial planning. The intention behind the proposals in the paper was to utilize existing resources better so that more local improvement projects could be initiated. This was not possible in the past as underspending in the segregated block votes would inevitably lead to the freezing of unutilized resources. In this respect, the general public would benefit from the proposal as more projects could be put in place subject to the satisfactory completion of other interface works and availability of land resources as appropriate. He stressed that the intention of the proposal was not to reduce Government expenditure on public works projects nor to enable the Administration to reshuffle resources from one project to another with a view to circumventing submissions to PWSC/FC. The Administration had a full list project available for viewing by Members. However, in view of its bulkiness, it had not been circulated to Members. The Administration could report the progress on the projects under the block allocations if Members so wished.

26. In concluding the discussion, DS(Tsy) undertook that the Administration would continue to seek the approval of the PWSC and FC for projects estimated to cost more than $15 million each. The Administration would not deliberately depress the project estimate to below $15 million so as to circumvent the need for submissions to PWSC/FC. Internal transfer of funds to cover cost over-runs on Public Works Programme projects would not be allowed. In the event that unused funds were required to make up a shortfall elsewhere, the Administration would have to make an appropriate submission to FC. The proposals, as a whole, would enable the Administration to advance the commencement of some local projects. Members would be able to decide on whether the system was workable in the context of the annual examination of the amounts to be allocated to the block allocations.

27. With Members agreement, the Chairman then put PWSC(95-96) 86-96 to the vote. These items were voted on and endorsed.

28. The Committee was adjourned at 12.20 p.m.

Legislative Council Secretariat
7 March 1996

Last Updated on 27 November 1998

Public Works Subcommittee

Record of Meeting held on 7 February 1996 at 10:45 am in the Legislative Council Chamber

Record of Meeting held on 7 February 1996 at 10:45 am
in the Legislative Council Chamber