For discussion PWSC(95-96)93
on 7 February 1996
ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Block allocations
Members are invited to recommend to the Finance Committee to approve the allocation of $333.359 million for block allocations under Head 708 for 1996-97 together with the creation of new block allocation Subheads 8100MX, 8100QX and 8100EX, and to delegate to the Financial Secretary the power to authorise expenditure from these new block allocations.
Various block allocations under Head 708 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 $333.359 million for the block allocations for 1996-97 under Head 708, including the new block allocations, made up as follows -
|
Subhead
|
Description
|
1996-97
proposed allocation
$ million
|
|---|
|
8100MX
|
Hospital Authority - improvements to buildings, studies and investigations for building projects, which replaces existing subheads 8001MX and 8012GX, is for improvements and investigation works to all public hospitals (i.e. ex-government and ex-subvented hospitals) and for studies for proposed medical subvented building projects, including consultants design fees and charges, preparation of tender documents and site investigation costs and major in-house investigations costing up to $15 million for each project.
|
137.500
|
|
8100QX
|
Alterations, additions, repairs and improvements to education subvented buildings, which replaces existing subheads 8001QX and 8010GX, is for alterations, additions, repairs and improvements to education subvented buildings (except those funded through the University Grants Committee) requiring a subsidy of not more than $15 million each and for studies for proposed education subvented building projects, including consultants design fees and charges, preparation of tender documents and site investigation costs and major in-house investigations costing up to $15 million for each project.
|
62.607
|
|
8001SX
|
Reprovisioning of welfare facilities is an existing subhead for reprovisioning of welfare facilities affected by the Housing Authority's Comprehensive Redevelopment Programme subject to a ceiling of $15 million for each project.
|
13.252
|
|
8100EX
|
Alterations, additions, repairs and improvements to the campuses of the UGC-funded institutions which is a new block allocation subhead, and also replaces the existing subhead 8011GX, is for alterations, additions, repairs and improvements to the campuses of the University Grants Committee (UGC) funded institutions requiring a subsidy of not more than $15 million each and for studies for proposed UGC funded building projects, including consultants design fees and charges, preparation of tender documents and site investigation costs and major in-house investigations costing up to $15 million for each project.
|
120.000
|
|
Total
|
333.359 |
Enclosure 1 sets out the allocation for each existing block allocation in 1995-96 as compared to the amounts proposed under the new block allocations 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 subheads1.
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 708 for 1996-97 in order to enable the government to undertake various new subvented projects in the next financial year, including meeting payments carried forward from the current (1995-96) and earlier financial years2.
4. With the exception of the additional amount sought for the entirely new subhead 8100EX, the proposed total allocation for the new Head 708 block allocations for 1996-97 is about 30% more than the allocation for the existing subheads in 1995-96. We have drawn up the allocations 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. The main reason for the increase in expenditure in respect of existing block allocations is due to the inclusion of alterations, additions, repairs and improvements to education subvented buildings and campuses of the UGC-funded institutions. We previously sought the approval of the Finance Committee for the funding of these items on an individual basis.
5. We have also taken the opportunity in this year's block allocation exercise to reduce the number of block allocations under Head 708. 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 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 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 708, excluding the entirely new block allocation 8100EX, since 1992-93, is shown below -
Total expenditure on Head 708 block allocations
|
Financial year
|
Original Estimate
$'000
|
Actual Outturn
$'000
|
|---|
|
1992-93
|
49,900
|
36,584
|
1993-94
|
68,400
|
54,341
|
|
1994-95
|
108,200
|
74,978
|
|
1995-96
|
164,827
|
# 139,687 |
# Forecast outturn for 1995-96
6. We usually find ourselves only being able to apply to the Finance Committee 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 block allocations covering expenditure on a similar nature of work, 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 allocations, 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 in the form of a separate project for upgrading to Category A.
8. The proposed subhead 8100EX is entirely new. Previously we have sought approval from the Finance Committee for expenditure on all UGC-funded capital projects on an individual project basis, regardless of how small or large the cost of the project. Given the expansion of the tertiary education sector, the number of such projects is increasing. Alterations, additions, repairs and improvements to the campuses of the UGC-funded institutions are similar in nature to Category D projects funded under those CWRF heads of expenditure dealing with expenditure on the Public Works Programme. In the case of the latter, the Finance Committee has approved the creation of block allocations to cater for minor projects costing less than $15 million each. The creation of the new subhead 8100EX will provide the same function in respect of UGC-funded minor projects. As with the Public Works Programme block allocations, we will still need to seek the Finance Committee's annual approval to the total amount of expenditure that we forecast to incur on such minor projects in the next financial year.
9. In drawing up the ambit of the block allocation 8100EX, we have also taken the opportunity to absorb the existing subhead 8011GX which provides for expenditure on feasibility studies on proposed UGC-funded projects. Generally the cost of such studies will be less than $15 million per project. Where we estimate the cost to exceed $15 million, we will need to seek the Finance Committee's prior approval.
10. The total proposed allocation for the block allocations for 1996-97 under Head 708 is $333.359 million. There are no additional annually recurrent expenditure implications as a result of these proposals.
11. 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 708 provide for subsidies on minor items costing not more than $15 million each, covering building projects for the Vocational Training Council and the Hospital Authority, including consultants design fees and charges, site investigations, costs arising from carrying out Preliminary Project Feasibility Studies for larger subvented building projects to enable them to be placed in the Capital Works Programme and for the reprovisioning of welfare facilities affected by the Housing Authority's Comprehensive Redevelopment 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 to PWSC(95-96)93
|
Subhead
|
Title
|
Original Allocation
1995 - 96
$ million
|
Existing/
Proposed
New
Subhead
|
Proposed Title
|
Proposed
Allocation
1996 - 97
$ million
|
|---|
|
8001MX
|
Hospital Authorityimprovements to buildings and investigations for building projects
|
95.00
|
8100MX
|
Hospital Authorityimprovements to buildings studies and investigations for building projects (this replaces the existing block allocation Subheads 8001MX and 8012GX)
|
137.50
|
|
8001QX
|
Alterations, additions and improvements to buildings (Vocational Training Council)
|
9.72
|
8100QX
|
Alterations, additions, repairs and improvements to education subvented buildings (this replaces the existing block allocation Subheads 8001QX and 8010GX)
|
62.607
|
|
8010GX
|
Project feasibility studies and minor investigations for education subventions building projects
|
0.01
|
8100EX
|
Alterations, additions, repairs and improvements to the campuses of the UGC-funded institutions
|
120.000
|
|
8011GX
|
Project feasibility studies and minor investigations for building projects of University Grants Committee-funded institutions
|
3.00
|
8001SX
|
Reprovisioning of welfare facilities
|
13.252
|
|
8012GX
|
Project feasibility studies and minor investigations for medical subventions building projects
|
6.10
|
|
|
|
|
8001SX
|
Reprovisioning of welfare facilities
|
51.00
|
|
|
|
|
Total
|
164.83
|
Total
|
333.359 |
Enclosure 2 to PWSC(95-96)93
|
Project Description
|
Estimate
1996-97
$'000
|
|---|
|
To replace 5-year old air-conditioning units at vocational Training Council
|
5,440
|
|
Provision of sewage treatment plant/facilities at Poly U
|
6,100
|
|
CFC replacement and retrofit at HKUST
|
5,650
|
|
Phase I extension at Poly U
|
6,480
|
|
Wind tunnel/geotechnical centrifuge at HKUST
|
7,000
|
|
Central air-conditioning to Industrial Centre workshops at Poly U
|
3,080
|
|
Lingnan College extension site B - contstruction of a soccer pitch
|
6,390
|
|
Reprovisioning of Salvation Armys D/C from Yau Tong Estate to Pak Tin phase 2
|
2,000
|
|
Reprovisioning of Christian Family Service Centres D/E cum HHT from Lei Yue Mun Road Estate to Lam Tin Redevelopment phase 3
|
4,000
|
|
Reprovisioning of Hong Kong Society for the Protection of Childrens D/C at Tse Wan Shan East Estate Community Centre
|
1,800
|
|
Provision of one pilot adolescent care centre
|
2,500
|
|
Provision of eight patients and carers resources centre
|
14,000
|
|
Improvement of ten patients toilets/showers rooms at Kwai Chung Hospital
|
2,100
|
|
Provision of air-conditioning for all wards at Fung Yiu King Hospital
|
1,750 |
Enclosure 3 to PWSC(95-96)93
Block allocation
Subhead
|
Title
|
Ambit
|
|---|
|
8001MX
|
Hospital Authority - improvements to buildings and investigations for building projects
|
For improvement and investigation works to all public hospitals (i.e. ex-government and ex-subvented hospitals) costing up to $15 million for each project.
|
|
8001QX
|
Alterations, additions and improvements to buildings (Vocational Training Council)
|
For alterations, additions and improvements to buildings requiring a subsidy of not more than $15 million each.
|
|
8010GX
|
Project feasibility studies and minor investigations for education subventions building projects
|
For preliminary feasibility studies and minor investigations to be carried out for capital subventions building projects before these projects are considered in annual Resource Allocation Exercises.
|
|
8011GX
|
Project feasibility studies and minor investigations for building projects of University Grants Committee - funded institutions
|
For preliminary feasibility studies and minor investigations to be carried out for capital subventions building projects before these projects are considered in annual Resource Allocation Exercises.
|
|
8012GX
|
Project feasibility studies and minor investigations for medical subvention building projects
|
For preliminary feasibility studies and minor investigations to be carried out for capital subventions building projects before these projects are considered in annual Resource Allocation Exercises.
|
|
8001SX
|
Reprovisioning of welfare facilities
|
For reprovisioning of welfare facilities affected by Housing Authority's Comprehensive Redevelopment Programme, subject to a ceiling of $15 million for each project. |
Last Updated on 8 December 1998
