For discussion PWSC(96-97)38
on 10 July 1996

ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 707 - NEW TOWNS AND URBAN AREA DEVELOPMENT
New Territories West Development
(Transport - Roads)
116TH - Intersection of Castle Peak and Kwai Chung Roads :
improvements, stage II

Members are invited to recommend to Finance Committee an increase in the approved project estimate of 116TH from $163.23million by $8.47 million to $171.7 million.

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PROBLEM
PROPOSAL
PROJECT SCOPE AND NATURE
JUSTIFICATION
FINANCIAL IMPLICATIONS
PUBLIC CONSULTATION
ENVIRONMENTAL IMPLICATIONS
LAND ACQUISITION
BACKGROUND INFORMATION
116TH - Intersection of Castle Peak and Kwai Chung Roads : improvements, stage II

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PROBLEM

The approved project estimate of 116TH is insufficient to meet the cost of the works under the project.

PROPOSAL

2. The Director of Territory Development (DTD), with the support of the Secretary for Transport, proposes to increase the approved project estimate of 116TH from $163.23 million by $8.47 million to $171.7 million.

PROJECT SCOPE AND NATURE

3. The scope of the project comprises the construction of two flyovers and associated roadworks and a system of grade-separated pedestrian crossings at the junction of Castle Peak Road and Kwai Chung Road.

JUSTIFICATION

4. We have substantially completed the works under 116TH. Following a review of the financial position of the project, DTD considers it necessary to increase the approved project estimate of 116TH from $163.23 million by $8.47 million to $171.7 million to meet the increase in the cost of the completed works. A summary of the reasons for the proposed increase of $8.47 million is as follows -

A comparison of the cost breakdowns of the approved project estimate (at December 1992 prices) and the revised project estimate together with the reasons leading to the proposed increase in the approved project estimate is at the Enclosure.

FINANCIAL IMPLICATIONS

5. Up to 31 March 1996, total expenditure on this project amounted to $162.34 million. Subject to Members’ approval, we expect that all outstanding payment will be made in 1996-97.

6. The proposed increase in the approved project estimate will not give rise to any additional recurrent expenditure.

PUBLIC CONSULTATION

7. As there is no change in project scope, we consider public consultation to be unnecessary.

ENVIRONMENTAL IMPLICATIONS

8. We have substantially completed the works. The proposed increase in the approved project estimate does not have any additional environmental implications.

LAND ACQUISITION

9. The proposed increase in the approved project estimate has no land acquisition implications.

BACKGROUND INFORMATION

10. In June 1986, Finance Committee upgraded 116TH to Category A at an estimated cost of $99 million. In May 1987, Finance Committee approved an increase in the approved project estimate to $115 million on the basis of the accepted tender price. In July 1990, Finance Committee further approved an increase in the approved project estimate to $155 million to cover price fluctuation payments under the contract up to April 1990, and the additional cost for accelerating the construction programme of the portion of the flyover connecting Kwai Chung Road and Cheung Wing Road to tie in with the opening of Route 5 in April 1990.

11. In March 1993, the Secretary for the Treasury approved under delegated authority a further increase in the approved project estimate from $155 million by $8.23 million ¹ to $163.23 million to cater for the price fluctuation payments under the contract for the period between April 1990 and October 1992, additional piling works to suit poor ground conditions, and additional roadworks based on actual measurement on site.

12. We started the works in June 1987 and substantially completed the works in October 1992. We are finalising the accounts and hope to complete the finalisation as soon as possible subject to the approval of the proposed increase in the approved project estimate.

1 -- In January 1995, Finance Committee (FC) agreed to raise the limit of the delgaged power of the Financial Secretary (this means both the Financial Secretary an dthe Secretary for the Treasury under Interpretation and General Clauses Ordinance (Cap.1)) to approve increases in approved project estimates from $10 million to $15 million. Since the propsed increase of $8.47 million together with the $8.23 million last approved by the Secretary for the Treasury under delegated authority in March 1993 exceeds $15 million, we need to seek FC's approval.

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Enclosure to PWSC(96-97)38

116TH - Intersection of Castle Peak and Kwai Chung Roads : improvements, stage II

A comparison of the approved project estimate (prepared on the basis of December 1992 prices) and the revised project estimate is as follows -

2. As regards (a) (roadworks and two flyovers) and (b) (grade-separated pedestrian crossings), the increase of $7 million is to cover the prolongation cost incurred by the contractor due to an extension of the contract period by six months. Of the $7 million -

1. $2.5 million is the prolongation cost for a two months’ extension due to unforeseen unsuitable soil below structural foundations which required further excavation and backfill; and
2. $4.5 million is the prolongation cost for a further four months’ extension due to disruption to the roadworks as a result of the additional traffic diversion constraints imposed by Transport Department and the Royal Hong Kong Police Force to avoid congestion.

3. As regards (h) (consultants’ fees for construction stage), the increase of $0.09 million is in line with the increase in the cost of the works.

4. As regards (i) (site staff costs), the increase of $1.38 million is the additional cost of extending the services of certain personnel for the supervision and finalisation of the project which turned out to be more complex than had been anticipated.

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