For discussion PWSC(95-96)92
on 7 February 1996
ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 707 - NEW TOWNS AND URBAN AREA DEVELOPMENT
Block allocations
Members are invited to recommend to the Finance Committee to approve the allocation of $218.50 million for block allocations under Head 707 for 1996-97 together with the creation of a new block allocation Subhead 7100CX, and to delegate to the Financial Secretary the power to authorise expenditure from the new block allocation.
Various block allocations under Head 707 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 total allocation of $218.50 million for the block allocations for 1996-97 under Head 707, including the creation of a new block allocation subheads 7100CX, made up as follows -
|
Subhead
|
Description
|
1996-97
proposed allocation
$ million
|
|---|
|
7013CX
|
District-based urban environmental improvements is for environmental projects in the urban areas, including minor improvements to local roads and paths, amenity planting and other environmental improvement projects identified and endorsed by urban District Boards costing $2 million or less each.
|
5.00
|
|
7100CX
|
New towns and urban area works, studies and investigations for items selected in Category D of the Public Works Programme, which replaces existing block allocation subheads 7004CX to 7008CX, 7012CX and 7009WX, is for minor works, minor landscaping, feasibility studies and site investigations in respect of new towns and urban area development 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 new towns and urban area development 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 works 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 new towns and urban area development 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. We will also continue to fund from the new subhead any residual payments arising from existing projects previously funded under subhead 7009WX, fresh and salt water distribution systems contingent upon new towns and urban area development works, with all future new waterworks to be funded from a new block allocation subhead that we propose to create under Head 709, Waterworks.
|
213.50
|
|
Total
|
218.50 |
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 Finance Committee delegate to the Financial Secretary the power to authorise expenditure under the new subhead1 .
3. 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 for each of the block allocations under Head 707 for 1996-97 in order to enable the government to undertake various new towns and urban area development 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 707 block allocation for 1996-97 is about 9% more than the 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. The increase in forecast expenditure for 1996-97 arises mainly from an increase in expenditure on consultants' fees and charges. The Territory Development Department is unlike other works departments in that it does not carry out most investigation and design work using in-house staff resources. Arising from the special nature of the New Town Programme, the department's role is focussed on overall project management and coordination, using consultants to carry out the actual design and supervision of construction works. The reason for the increased expenditure on consultants is because we plan to start a number of new items in 1996-97. 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 707. The creation of new block allocations has usually taken place on an ad hoc basis in response to a particular need at the time. Because of changes in circumstances over time, this has subsequently led to confusion on some occasions in our interpreting which block allocation should be used for a particular purpose. Underspending is a problem because the procedures governing expenditure under the 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 707, since 1992-93, is shown below -
Total expenditure on Head 707 block allocations
|
Financial year
|
Original Estimate
$'000
|
Actual Outturn
$'000
|
|---|
|
1992-93
|
90,800
|
69,194
|
|
1993-94
|
90,800
|
94,889
|
|
1994-95
|
168,600
|
110,659
|
|
1995-96
|
199,900
|
# 179,331 |
# 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 most of the existing block allocations into a new block allocation, 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 707 is $218.50 million. There are no additional annually recurrent expenditure implications arising from the proposals.
9. The 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 707 provide for expenditure on minor new towns and urban area works, including minor landscaping works and district-based urban environmental improvement schemes, and consultants design fees and charges, 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 Secretary may delegate his power of administration to other officers.
2 -- Even relatively small 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 amount of 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
|
Subhead
|
Title
|
Original Allocation
1995 - 96
$ million
|
Existing/
Proposed
New
Subhead
|
Proposed Title
|
Proposed
Allocation
1996 - 97
$ million
|
|---|
|
7004CX
|
Minor investigations for new towns and urban area development project
|
1.00
|
7013CX
|
District-based urban environmental improvements
|
5.00
|
|
7005CX
|
Minor outstanding new towns and urban area development items
|
0.50
|
7100CX
|
New towns and urban area works, studies and investigations for items selected in
|
213.50
|
|
7006CX
|
Minor new towns and urban area development works selected from items in Category D of the Public Works Programme
|
55.00
|
|
Category D of the Public Works Programme
(this replaces the existing block allocation Subheads 7004CX to 7008CX and
|
|
|
7007CX
|
Minor landscaping works in new towns and urban areas
|
5.00
|
|
7012CX and 7009WX)
|
|
|
7008CX
|
Consultants fees and charges and major in-house investigations for new towns and urban area development projects
|
105.00
|
|
|
|
|
7012CX
|
Project feasibility studies and minor investigations for new towns and urban area development projects
|
8.40
|
|
|
|
|
7013CX
|
District-based urban environmental improvements
|
5.00
|
|
|
|
|
7009WX
|
Fresh and salt water distribution systems contingent upon new towns and urban area development works
|
20.00
|
|
|
|
|
|
Total
|
199.90
|
|
Total
|
218.50 |
Enclosure 2 to PWSC(95-96)92
|
Project Description
|
Estimate
1996-97
$'000
|
|---|
|
Road TY 3/1 in area 3, Tsing Yi
|
5,338
|
|
San Tsuen Village improvement and extension
|
7,000
|
|
Erosion control in green belt areas, Kwai Chung and Tsing Yi
|
7,500
|
|
Footbridge across Road L100, Fanling south
|
5,791
|
|
Advance mainlaying along Yau King Lane, Tai Po
|
7,000
|
|
Sha Tin New Town, stage II - local distributor roads in area 90 (south), Ma On Shan
|
8,450
|
|
Landscaping works for amenity areas in Chung Uk Tsuen, Tuen Mun
|
350
|
|
Tuen Mun New Town engineering development, formation, roads and drains in area 52 (remainder) and footbridge across road D9
|
1,770
|
|
Tai Po development - remaining works (formation and servicing in area 39 and area 12 (part), Tai Po
|
2,750
|
|
Yuen Long south western extension - site formation, roads and drainage works
|
3,300
|
|
Main drainage channels for San Tin, North West New Territories
|
3,300
|
|
Tseung Kwan O development, phase II, remaining engineering works
|
3,620
|
|
Justice Drive extension
|
2,800
|
|
Fresh and salt water area distribution system for market towns, stage I
|
12,300
|
|
Improvement to the flight of staircases leading to the Mission Hill
|
900
|
|
Construction of morning walk trail at the hillslope near Kwong Tin Village, Lam Tin
|
600 |
Enclosure 3 to PWSC(95-96)92
Block allocation
Subhead
|
Title
|
Ambit
|
|---|
|
7004CX
|
Minor investigations for new towns and urban area development projects
|
For minor site investigation works costing $400,000 or less in respect of each site.
|
|
7005CX
|
Minor outstanding new towns and urban area development 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 territory development 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.
|
|
7006CX
|
Minor new towns and urban areas development works selected from items in Category D of the Public Works Programme
|
For minor works, within the urban areas and new town layouts, selected from Category D of the Public Works Programme.
|
|
7007CX
|
Minor landscaping works in new towns and urban areas
|
For minor amenity planting and landscaping of unallocated Government land within the urban areas and new town layouts and costing $400,000 or less for each site.
|
|
7008CX
|
Consultants' fees and charges and major in-house investigations for new towns and urban area development projects
|
For consultants' fees and charges for feasibility investigations and the design of works 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 undertaken by government departments and costing more than $400,000 in respect of each site area are also funded under this block allocation.
|
|
7012CX
|
Project feasibility studies and minor investigations for new towns and urban area development projects
|
For preliminary feasibility studies and minor investigations to enable new towns and urban area development projects to be included in Category C of the Public Works Programme.
|
|
7013CX
|
District-based urban environmental improvements
|
For environmental improvement projects in the urban areas, including minor improvements to local roads and paths, amenity planting and other environmental improvement projects identified and endorsed by urban District Boards costing $2 million or less each.
|
|
7009WX
|
Fresh and salt water distribution systems contingent upon new towns and urban area development works
|
For fresh and salt water mainlaying works carried out in conjunction with civil engineering and roadworks in new towns and rural townships. |
Last Updated on 8 December 1998
