For discussion PWSC (95-96)96
on 7 February 1996
ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 711 - HOUSING
Block allocations
Members are invited to recommend to the Finance Committee to approve the allocation of $29.411 million for block allocations under Head 711 for 1996-97 together with the creation of a new block allocation Subhead B100HX, and to delegate to the Financial Secretary the power to authorise expenditure from the new block allocation.
Various block allocations under Head 711 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, B100HX, minor housing related works, and studies and investigations for items related to housing development, selected in Category D of the Public Works Programme with a total allocation of $29.411 million for 1996-97 under Head 711. The new subhead, which replaces existing block allocation subheads B001HX to B004HX, is for minor works, feasibility studies and site investigations in respect of housing related works, 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 housing related 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 housing related projects in Category B or (subject to the Secretary for the Treasurys approval) Category C of the Public Works Programme.
3. 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 .
4. 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 for 1996-97 in order to enable the government to undertake various housing works in the next financial year, including meeting payments carried forward from the present and earlier financial years2 .
5. The proposed total allocation for the new Head 711 block allocation for 1996-97 is almost half 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. Enclosure 2 sets out the key expenditure items in 1996-97. The reason for the large reduction in expenditure forecast in 1996-97 as compared to that of 1995-96 is that actual expenditure performance in 1995-96 has shown that we must be more conservative in our forecasts of expenditure. Our forecast of total expenditure in 1995-96 on the block allocations is only $11.800 million as opposed to an original provision of $58.907 million. We only created Head 711 and the block allocations under the head in the latter part of 1993-94. Now that he has had a full year's experience operating the Head, the Secretary for Housing is now in a better position to more accurately forecast likely spending performance.
6. We have also taken the opportunity in this year's block allocation exercise to reduce the number of block allocations under Head 711. As we have explained in respect of our proposals for expenditure on block allocations under other Heads, we believe that we can improve spending performance by combining block allocations together because we can then transfer unused funds under one block allocation to another block allocation where additional funds are required.
7. In addition, instead of there being a variety of financial controls depending on the scope of each block allocation, we propose to introduce only one limit, 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. We will also place all items 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 711 is $29.411 million. There are no additional annually recurrent expenditure implications arising as a result of 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 711 provide for expenditure on minor housing items 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 to PWSC(95-96)96
|
Subhead
|
Title
|
Original
Allocation
1995-96
$ million
|
Proposed
New
Subhead
| Proposed Title
|
Proposed
Allocation
1996-97
$ million
|
|---|
| B001HX | Minor investigations for public works projects related to housing development | 0.40 | B100HX | Minor housing related works, and studies and investigations for items related to housing development, selected in Category D of the Public Works Programme | 29.411
|
| B002HX | Minor works and studies/investigations selected from items in Category D of the Public Works Programme related to housing development | 32.01 |
|
|
|
| B003HX> | Project feasibility studies and minor investigations for public works projects related to housing development | 25.16 |
|
|
|
| B004HX | Consultants' fees and charges and major in-house investigations for public works project related to housing development | 1.34 |
|
|
|
|
Total
|
58.91
|
Total
|
29.411 |
Enclosure 2 to PWSC(95-96)96
|
Project Description
|
Estimate
1996-97
$'000
|
|---|
|
Wong Chuk Hang Road flyover and associated road widening - site investigation, design and construction consultancy
|
5,480
|
|
Yuen Long water supply - Tan Kwai Tsuen fresh water service reservoir - stage III - Investigation
|
4,500
|
|
Extension of water supply to Ma On Shan - investigation
|
2,900
|
|
Transfer facilities from Butterfly Valley primary service reservoir in metropolitan area - stage I - investigation
|
2,644
|
|
Widening of about 3 km of Sai Sha Road from its Junction with Kam Ying Road to Tai Tun Village - PPFS
|
1,800
|
|
Tates Cairn Highway and T7 improvement - PPFS
|
1,500
|
|
Sham Tseng reclamation - investigation
|
1,500
|
|
Extension of Shau Kei Wan high level water supply systems - design
|
1,000 |
Enclosure 3 tyo PWSC(95-96)96
Block allocation
Subhead
|
Title
|
Ambit
|
|---|
|
B001HX
|
Minor investigations for public works projects related to housing development
|
For site investigation works costing $400,000 or less in respect of each site.
|
|
B002HX
|
Minor works and studies/investigations selected from items in Category D of the Public Works Programme related to housing development
|
For public works projects which are selected from Category D of the Public Works Programme and are related to housing development.
|
|
B003HX
|
Project feasibility studies and minor investigations for public works projects related to housing development
|
For preliminary feasibility studies and minor investigations to enable public works projects, which are related to housing development, to be included in Category C of the Public Works Programme.
|
|
B004HX
|
Consultants' fees and charges and major in-house investigations for public works projects related to housing development
|
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 costing more than $400,000 in respect of each site are also funded under this block allocation. |
Last Updated on 8 December 1998
