For discussion PWSC(96-97)49
on 10 July 1996

ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 711 - HOUSING
Water Supplies - Fresh water supplies
140WF - Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - Stage I

Members are invited to recommend to Finance Committee -

1. the upgrading of part of 140WF, entitled “Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - Stage I, construction of Butterfly Valley primary service reservoir and aqueducts from Tai Po to Butterfly Valley” to Category A at an estimated cost of $2,305.2 million in money-of-the-day prices, and
2. the retention of the remainder of 140WF, retitled “Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - Stage I, construction of Tai Po treatment works and pumping station ” in Category B.

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PROBLEM
PROPOSAL
PROJECT SCOPE AND NATURE
JUSTIFICATION
FINANCIAL IMPLICATIONS
PUBLIC CONSULTATION
ENVIRONMENTAL IMPLICATIONS
LAND ACQUISITION
BACKGROUND INFORMATION
Breakdown of estimates for consultants’ fees

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PROBLEM

We forecast that the total capacity of the water treatment works supplying the metropolitan area and north-eastern New Territories will not be adequate to cope with the projected demand for treated water in these areas by early 2000.

PROPOSAL

2. The Director of Water Supplies, with the support of the Secretary for Housing, proposes to upgrade part of 140WF to Category A at an estimated cost of $2,305.2 million in money-of-the-day (MOD) prices for funding the following work -

1. construction of Butterfly Valley primary service reservoir; and
2. design and construction of aqueducts from Tai Po to Butterfly Valley.

PROJECT SCOPE AND NATURE

3. The original scope of 140WF comprises the investigation, design and construction of new water treatment works and a pumping station at Tai Po area 38, a primary service reservoir at Butterfly Valley in Lai Chi Kok and the associated aqueducts for an initial Stage I daily treated water supply of 250 000 cubic metres to the metropolitan area and north-eastern New Territories by early 2000. The system is capable of being expanded in stages up to 1 200 000 cubic metres per day when the need arises. Under the Stage I work, we will form the sites for the water treatment works and the primary service reservoir and construct the aqueducts to cater for an ultimate supply capacity of 1 200 000 cubic metres per day. This is to avoid the technical difficulties and the substantial costs associated with phased construction.

4. The scope of the part of 140WF which we now propose to upgrade to Category A comprises the following -

1. site formation for the primary service reservoir at Butterfly Valley to an ultimate capacity of 200 000 cubic metres to cater for the ultimate supply capacity of 1 200 000 cubic metres per day;
2. construction of a primary service reservoir at Butterfly Valley with a capacity of 40 000 cubic metres to cater for the initial Stage I supply capacity of 250 000 cubic metres per day;
3. design and construction of a raw water aqueduct comprising approximately 440 metres of pipeline of 2 metres diameter and 1 400 metres of tunnel with a 4.8 metres nominal diameter from the existing Tai Po Tau pumping station to the proposed Tai Po treatment works; and
4. design and construction of a treated water aqueduct comprising approximately 1 600 metres of pipeline of 2 metres diameter and 12 000 metres of tunnel of 3.9 metres nominal diameter from the proposed Tai Po treatment works to the proposed Butterfly Valley primary service reservoir.

JUSTIFICATION

5. At present, the Sha Tin group of water treatment works provides fresh water supply for the metropolitan area (Hong Kong and Kowloon) and north-eastern New Territories (Sha Tin and Ma On Shan). It has a capacity of 1 580 000 cubic metres per day and serves a population of 2 841 000. By 2000, the daily demand for treated water from the metropolitan area and north-eastern New Territories, including the demand arising from the additional land for housing in the metropolitan area recommended by the Task Force on Land Supply and Property Prices, will increase to 1 816 000 cubic metres for an estimated population of about 3 084 000. Upon commissioning of Ma On Shan treatment works, the total daily water treatment capacity available for the above areas in 2000 will be 1 796 000 cubic metres but there is still a shortfall in treated water supply of 20 000 cubic metres per day in the areas.

6. We expect that the daily treated water demand in the areas will increase to 2 046 000 cubic metres by 2004 with a cumulative shortfall of 250 000 cubic metres. Thus, for Stage I we have planned a capacity of 250 000 cubic metres per day for the new treatment works to allow for the projected growth up to 2004 and for future expansion of the treatment works beyond 2004.

7. If we do not provide additional water treatment and transfer facilities by early 2000, we expect a shortage of treated water supply for new developments in the above areas. To complete the project by February 2000, we need to start the construction of the treatment and transfer facilities in December 1996.

FINANCIAL IMPLICATIONS

8. We estimate the capital cost of the part that we now propose to upgrade to Category A to be $2,305.2 million in MOD prices (see paragraph 9 below), made up as follows -

9. Subject to approval, we will phase the expenditure as follows -

10. We have derived the MOD estimates on the basis of the Government’s forecast of trend labour and construction prices for the period 1996 to 2003. We will tender the works contracts for the aqueducts and primary service reservoir on a lump-sum basis. The aqueducts contract comprises primarily tunnels, the design and construction of which would largely depend on the contractors’ plant and method of working. We will therefore adopt a design and build type of contract for the aqueducts to allow effective utilisation of the contractors’ expertise and hence optimisation of the design to suit the contractors’ available plant and method of working. The primary service reservoir contract will be a normal works contract.

11. As the Director of Water Supplies has insufficient in-house staff resources and expertise to supervise the construction works, we propose to employ resident site staff to carry out this task under the management of the consultants commissioned for the detailed design and construction contract. The consultants’ fee in paragraph 8(b) above is a tendered lump-sum price provisionally included in a consultancy agreement for the design and construction of the project awarded under 219WF “Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - detailed design”. We will reimburse the resident site staff expenses to the consultants on a cost plus percentage basis.

12. We estimate the additional annually recurrent expenditure to be $913,500.

PUBLIC CONSULTATION

13. We have consulted the Tai Po, Tsuen Wan, Kwai Tsing and Sham Shui Po District Boards during the investigation study stage in 1995 and also during detailed design stage in 1996. The Tsuen Wan, Kwai Tsing and Sham Shui Po District Boards had no objection to the project. The Tai Po District Board also supported the project in principle, but has asked that the concerns of villagers in the vicinity of the project be fully addressed. For this purpose, we have hold a series of consultation meetings with the villagers concerned. We have revised the layout of the proposed water treatment works to address their ‘fung shui’ concerns. We will continue to discuss with the villagers their concerns over the alignment of the water pipes and arrangements for the removal of the affected graves. We are confident that we will be able to address their concerns fully and will assure them that we will take their views into account as far as possible in the implementation of the project.

ENVIRONMENTAL IMPLICATIONS

14. The consultants completed an Environmental Impact Assessment (EIA) for the whole project in March 1996. In accordance with the findings of the EIA, we will implement sludge recovery and treatment facilities for the treatment works so that we can dispose of the sludge at landfills. We shall provide washwater treatment facilities to treat washwater from Butterfly Valley primary service reservoir before discharge to the sewer.

15. For construction impacts, we will control noise and dust emissions and site run-off nuisances to comply with established environmental standards and requirements through the implementation of appropriate mitigation measures in the relevant contracts.

16. We shall implement Environmental Monitoring and Audit programmes to ensure the recommended mitigation measures are always effective in function.

17. The consultants have conducted a Chlorine Hazard Assessment study for Stage I of the proposed treatment works. The study indicates that the risks associated with the use of chlorine at the treatment works for Stage I fall within established guidelines. We will implement the recommended safety measures to minimise the risks.

LAND ACQUISITION

18. We will acquire 3.5 hectares of private land and we will need to clear 21 hectares of government land for the construction of the project. Only one family is affected. The total estimated cost of acquisition and clearance is $155 million. This will be charged to Head 701 “Land Acquisition”.

BACKGROUND INFORMATION

19. We upgraded 140WF to Category B in November 1993. In July 1994, Finance Committee approved the upgrading of part of 140WF as 202WF “Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - investigation and preliminary design study” to Category A at an estimated cost of $22.4 million at March 1994 prices for engaging consultants to carry out an investigation study and site investigations for the project. The consultants engaged under 202WF completed the investigation study in July 1995 and confirmed the feasibility of the project.

20. In July 1995, Finance Committee further approved the upgrading of part of 140WF as 219WF “Additional treatment and water transfer facilities for the metropolitan and north-eastern New Territories - detailed design” to Category A at an estimated cost of $52.6 million in MOD prices for engaging consultants to carry out detailed design for the project. The consultants engaged under 219WF have substantially completed the detailed design for the primary service reservoir and have established design objectives for the aqueducts. Subject to the Finance Committee’s approval to upgrade this part of 140WF to Category A, we will invite pre-qualified contractors to submit tenders for the works contracts for the aqueducts and the primary service reservoir of the project in late August 1996 and early September 1996 respectively. We plan to start construction works in December 1996 for completion in February 2000.

21. The remaining works in 140WF involve the construction of the Tai Po treatment works and pumping station. We will seek Members’ recommendation to upgrade the remainder of 140WF to Category A in November 1996. We plan to start the construction of the treatment works and pumping station in July 1997 for completion in February 2000.

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Enclosure to PWSC(96-97)49

Breakdown of estimates for consultants’ fees

Out-of pocket expenses

The amount of out-of pocket expenses is insignificant.

Notes

1. The consultants’ fee for works in the construction stage is the tender price provisionally included in consultancy Agreement No. CE 59/95 for the design and construction of the project.
2. A multiplier factor of 2.1 is applied to the average MPS point to arrive at the full staff costs for resident site staff including the consultants’ overheads and profit, as the staff will be supplied by the consultants. (At 1.4.95, MPS pt. 40=$51,440 p.m. and MPS pt. 16=$17,270 p.m.).
3. The figures for the resident site staff given above are based on estimates prepared by the Director of Water Supplies. We will only know the actual man months and actual fees when we have appointed the resident site staff.

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