For discussion PWSC(95-96)89
on 7 February 1996
TEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 704 - DRAINAGE
Block allocations
Members are invited to recommend to the Finance Committee to approve the allocation of $59.547 million for block allocations under Head 704 for 1996-97 together with the creation of a new block allocation Subhead 4100DX, and to delegate to the Financial Secretary the power to authorise expenditure from the new block allocation.
Various block allocations under Head 704 need funding in 1996-97 for existing and new projects to proceed on schedule. The present system of block allocations is administratively cumbersome and leads to underspending.
2. We propose a single block allocation, 4100DX, Drainage works, studies and investigations for items selected in Category D of the Public Works Programme with a total allocation of $59.547 million for 1996-97 under Head 704. The new subhead, which replaces existing block allocation subheads 4001DX to 4006DX, 4009CX and 4010CX, is for minor works, feasibility studies and site investigations in respect of drainage projects, subject to a maximum ceiling of expenditure of not more than $15 million per Category D item. Items may also be included in Category D to cover the costs of preliminary feasibility studies and investigations to enable drainage projects to be included in Category C of the Public Works Programme, and consultants fees and charges for feasibility investigations and design (including preparation of tender documents) of drainage projects in Category B or (subject to the Secretary for the Treasurys approval) Category C of the Public Works Programme. Urgent payments in respect of minor outstanding works to a value not exceeding $100,000 on any drainage projects that have been substantially completed and for which there is no subhead in the Fund estimates may also be charged to this subhead. Approval will be sought from the Financial Secretary to reinstate such projects in the Fund estimates during the year and, once this approval has been obtained, expenditure will be transferred to the original project. Enclosure 1 sets out the allocation for each existing block allocation in 1995-96 as compared to the amount proposed under the new block allocation for 1996-97. As with other block allocations under the Capital Works Reserve Fund (CWRF), we also propose that the Finance Committee delegate to the Financial Secretary the power to authorise expenditure under the above subhead1.
3. Block allocation subheads under those CWRF heads of expenditure dealing with the Public Works Programme provide sources of funds for a wide variety of minor projects, generally costing less than $15 million each. Public works projects costing over $15 million each have to be approved on an individual basis by the Finance Committee. The Finance Committee approves expenditure under block allocations on the basis of the forecast of total expenditure required for the next financial year, not the total estimated cost of the works to be carried out, the implementation of which can extend beyond the financial year in question. It is necessary for the Finance Committee to approve funds under each of the block allocations under Head 704 for 1996-97 in order to enable the Government to undertake various minor drainage works in the next financial year, including meeting payments carried forward from the present and earlier financial years2.
4. The proposed total allocation for the new Head 704 block allocation for 1996-97 is about 4% more than the total allocation for the existing subheads in 1995-96. We have drawn up the allocation proposed for 1996-97 on the basis of expenditure patterns, existing commitments and projects expected to be undertaken in the coming financial year. Enclosure 2 sets out the key expenditure items in 1996-97.
5. We have also taken the opportunity in this year's block allocation exercise to reduce the number of block allocations under Head 704. The creation of new block allocations has usually taken place on an ad hoc basis in response to a particular need at the time. Underspending is a problem because the procedures governing expenditure under the Capital Works Reserve Fund (CWRF) prevent us from automatically transferring readily available funds under one block allocation to another block allocation where additional funds are urgently required and then, if necessary, subsequently seeking additional funds from the Finance Committee via PWSC should total expenditure for the financial year in respect of all block allocations look likely to be exceeded. Total expenditure on block allocations under Head 704, since 1992-93, is shown below -
Total expenditure on Head 704 block allocations
|
Financial year
|
Original Estimate
$'000
|
Actual Outturn
$'000
|
|---|
|
1992-93
|
30,100
|
13,012
|
|
1993-94
|
36,000
|
22,132
|
|
1994-95
|
56,500
|
35,892
|
|
1995-96
|
57,360
|
# 32,608 |
# Forecast outturn for 1995-96
6. We usually find ourselves only being able to apply to the Finance Committee via the PWSC to increase the permitted level of expenditure under the block allocation requiring the additional funds, leaving the amounts available under other block allocations unchanged. This is particularly true in the early part of the financial year when we are still uncertain of the likely total year expenditure under each block allocation. By combining the block allocations into one, we can overcome these problems.
7. In addition, the present variety of financial controls on maximum levels of expenditure on any single item depend on the individual scopes of each block allocation. This is confusing. We propose to introduce only one limit for the new block allocation, that being a maximum expenditure ceiling of not more than $15 million per item3. Above that ceiling we will seek the specific approval of the Finance Committee via the PWSC in the form of a separate project for upgrading to Category A in the Public Works Programme. We will also place all items funded under the new block allocation in Category D of the Public Works Programme so as to be able to impose uniform administrative procedures.
8. The total proposed allocation for the new block allocation for 1996-97 under Head 704 is $59.547 million. There are no additional annually recurrent expenditure implications arising from the proposal.
9. The Capital Works Reserve Fund (CWRF) finances eleven different heads of expenditure covering the Public Works Programme, the acquisition of land, capital subventions and major systems and equipment, and computerisation. The block allocations under Head 704 provide for expenditure on minor drainage works, including site investigations and consultancy fees for larger projects in the capital works programme. The ambits of the current block allocations for 1995-96 are set out in Enclosure 3. We allow for a certain level of over-commitment on the sums approved by the Finance Committee in order to cater for expenditure on items which can only start towards the end of the financial year and part of the expenditure must carry forward to the next financial year or for items where we forecast the full amount of expenditure to be spread over several financial years.
1 -- As provided for under the Resolution establishing the CWRF, the Financial Secreatry may delegate his power of administration to other officers.
2 --- Even relatively small drainage projects can take more than one year to complete. Most works contracts for example require a one year's maintenance period on completed works. Only after the maintenance period is completed do we release the final amountof money due to the contractor.
3 -- We do not allow larger projects, costing more than $15 million each, to be broken down into phases or stages so as to circumvent the need to seek Finance Committee's approval. Finance Committee has previously delegated to the Secretary for the Treasury the power to authorize expenditure on Category D items up to a maximum ceiling of $15 million per item.
Enclosure 1 to PWSC(95-96)89
|
Subhead
|
Title
|
Original Allocation 1995 - 96
$ million
|
Proposed
New
Subhead
|
Proposed Title
|
Proposed
Allocation
1996 - 97
$ million
|
|---|
|
4009CX
|
Works contingent on development
|
0.43
|
4100DX
|
Drainage works, studies and investigations for
|
59.55
|
|
4010CX
|
Minor sewers and drains
|
6.20
|
|
items selected in Category D of the Public Works
|
|
|
4001DX
|
Minor investigations for drainage projects
|
0.67
|
|
Programme
|
|
|
4002DX
|
Minor outstanding drainage items
|
0.30
|
|
|
|
|
4003DX
|
Minor drainage works and studies/ investigations selected from items in Category D of the Public Works Programme
|
26.68
|
|
|
|
|
4004DX
|
Minor structures and submarine outfalls
|
0.50
|
|
|
|
|
4005DX
|
Project feasibility studies and minor investigations for drainage projects
|
3.38
|
|
|
|
|
4006DX
|
Consultants' design fees and charges and major in-house investigations for drainage projects
|
19.20
|
|
|
|
|
|
Total
|
57.36
|
|
Total
|
59.55 |
Enclosure 2 to PWSC(95-96)89
|
Project Description
|
Estimate
1996-97
$'000
|
|---|
|
Chuen Lung sewerage - site investigation
|
100
|
|
Ground investigation for Shek Wu Hui STW upgrading
|
120
|
|
North West Kowloon industrial area expedient connection surveys
|
5,500
|
|
Supply and installation of mechanical raked screen at Yuen Long Nullah
|
2,000
|
|
North District sewerage advance works - trunk sewer along Sha Tau Kok Road
|
2,800
|
|
West Kowloon stormwater drainage improvement, stage I - consultants' fees and investigations
|
4,400
|
|
Shenzhen River improvement works stage II - site investigation, survey and design fees
|
7,200
|
|
Construction of a 375mm dia sewer along Road L8 in Fanling
|
600
|
|
Construction of new sewer diameter 750mm and 700mm along Tai On Road, Shaukeiwan
|
400
|
|
Central expedient connection survey
|
5,500
|
|
Causeway Bay expedient connection survey
|
5,500
|
|
Sewer construction for Anderson Road quarries development and Po Lam housing platform
|
300
|
|
Construction of stormwater drain along Road 20/5, Lo Shue Pai, Chai Wan
|
300 |
Enclosure 3 to PWSC(95-96)89
Block allocation
Subhead
|
Title
|
Ambit
|
|---|
|
4009CX
|
Works contingent on development
|
For modifications to public drains and sewers contingent on development.
|
|
4010CX
|
Minor sewers and drains
|
For minor reconstruction and improvement of existing sewers and drains costing $1.25 million or less in respect of each site.
|
|
4001DX
|
Minor investigations for drainage projects
|
For minor site investigation works costing $400,000 or less in respect of each site.
|
|
4002DX
|
Minor outstanding drainage projects
|
An arbitrary amount which may be used initially for urgent payments in respect of minor outstanding works to a value not exceeding $100,000 on any drainage project which has been substantially completed and for which there is no subhead shown in the Fund estimates. Approval will be sought from the Financial Secretary under delegated power to reinstate such projects in the Fund estimates during the year and, once this approval has been obtained, expenditure will be transferred to the original project.
|
|
4003DX
|
Minor drainage works and studies/ investigations selected from items in Category D of the Public Works Programme
|
For minor drainage works and studies/investigations selected from Category D of the Public Works Programme, including improvements to existing facilities.
|
|
4004DX
|
Minor structures and submarine outfalls
|
For minor reconstruction, improvement and rehabilitation of civil structures in sewage treatment works and submarine outfalls costing $1.5 million or less in respect of each site.
|
|
4005DX
|
Project feasibility studies and minor investigations for drainage projects
|
For preliminary feasibility studies and minor investigations to enable drainage projects to be included in Category C of the Public Works Programme.
|
|
4006DX
|
Consultants' design fees and charges and major in-house investigation for drainage projects
|
For consultants' fees and charges costing not more than $15 million for the design of drainage projects, including preparation of tender documents, in Category B or (subject to the Secretary for the Treasury's approval) Category C of the Public Works Programme. Site investigations costing more than $400,000 but not more than $15 million in respect of each site are also funded under this block allocation. |
Last Updated on 8 December 1998
