For discussion
FCR(96-97)97
on 31 January 1997

ITEM FOR FINANCE COMMITTEE

HEAD 91 - LANDS DEPARTMENT
Subhead 121 Contract maintenance

Members are invited to approve supplementary provision of $18,100,000.

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PROBLEM
PROPOSAL
JUSTIFICATION
FINANCIAL IMPLICATIONS
BACKGROUND INFORMATION
Analysis of expenditure under
Head 91 Lands Department Subhead 121 Contract maintenance

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PROBLEM

The revised provision of $35,557,000 is insufficient to meet anticipated expenditure on clearance and demolition works for the maintenance and management of Government land in 1996-97.

PROPOSAL

2. We propose that Members approve supplementary provision of $18,100,000 under Subhead 121 Contract maintenance.

JUSTIFICATION

3. Contract maintenance includes, inter alia, the demolition of structures on Government land, the maintenance and fencing off of sites for sale or development, and the management or clearance of buildings on sites which have reverted to the Government. Many factors affect the progress of clearance projects, and it is difficult to estimate the timing and exact requirements for much of these works. They include meteorological conditions which affect the pace of non-development clearance of squatters on hill-slopes, the completion of more public housing flats which provides for the rehousing of occupants of Temporary Housing Areas (THAs), and the response of clearees who invariably bargain on the terms of resettlement. In the current financial year, the volume of clearance and demolition works have increased drastically compared to that of the previousyear. The Director of Lands (D of L) has now advised that, notwithstanding supplementary provision having been made under delegated power, the revised provision for 1996-97 under the subhead is inadequate to meet the cost of the clearance of coastal black spots and clearance and demolition of THAs required during the current financial year.

4. To contain expenditure within the revised provision as far as possible, D of L has carefully examined the programme of the clearance and demolition works planned for the remainder of the financial year. After a careful review of the expenditure to date and the anticipated expenditure, and following re-prioritisation of works and commitments, he concludes that he requires supplementary provision of $18,100,000 to meet the most compelling needs where there is little scope for re-scheduling. The amount is calculated as follows -

An analysis of the expenditure position of the subhead is at the Enclosure.

Encl.

5. The estimated shortfall in the provision for contract maintenance is mainly attributable to the following clearance projects in 1996-97 the timing and requirement of which were uncertain when we prepared the 1996-97 Estimates -

6. As regards paragraph 5(a) above, D of L needs additional funding for clearing and scavenging littoral refuse at 32 coastal black spots covering various typhoon shelters and breakwaters, non-gazetted beaches, remote shorelines etc. Such operations began in December 1994 as a trial scheme to improve the cleanliness of the environment recommended by the Working Group on Marine and Littoral Refuse. Under the trial scheme, the Urban Council, the Regional Council and the Marine Department will launch joint clean up operations to identify coastal black spots and carry out cleansing and scavenging operations. The joint team will take a multi-faceted approach involving not just increasing the scavenging service along coastal waters, but also reducing the amount of land-sourced littoral refuse going into the harbour. The joint team will therefore also step up cleansing service for coastal land areas covering shoreline drains and sewers, which have the potential of deteriorating into sources for reservoirs of floating refuse.

7. Much of the refuse and debris deposited on coastal land, if not scavenged under the scheme, might otherwise be washed into the sea. This would not only constitute an eyesore, pose a potential health hazard to the public and dangers to vessels, but would also make any subsequent cleansing action more difficult and costly. As these coastal black spots are unleased Government land for which the Government has management responsibility, D of L has been reimbursing the Urban Council and the Regional Council of their costs for collecting littoral refuse in relation to the joint operations. The total expenditure was $1,600,000 in 1995-96. D of L was able to absorb this amount from within the approved provision under the subhead because of the lower than expected expenditure on other contract maintenance activities in the year. Following the extension of the trial scheme by the Working Group to 1996-97, D of L estimates the disbursement to be $2,000,000. He concludes that he will not be able to absorb this requirement from within the revised provision for the subhead in 1996-97 and needs supplementary provision.

8. As regards paragraphs 5(b) to (i) above, D of L needs additional funding for the clearance of THAs built before 1984 and THA sites which have become vacant and available for redevelopment. The Government has pledged in the 1993 Policy Address to clear and demolish all pre-1984 THAs before the end of 1996. In addition, we have earmarked sites at the Long Bin, Fortune Street and Tsing Fat THAs for development of public housing, sites at the Kai Cheung, Ping Shek and Shun Lee THAs for development of public facilities, and the site at Kai Wang THA for sale.

9. It is essential to demolish and clear vacant structures of THAs immediately after the residents vacate their premises to ensure that the latter will not be converted into illegal use or become a fire hazard or public nuisance. We also need to demolish the structures and clear the sites urgently to meet the scheduled dates for the delivery of vacant possession for new developments. D of L has consulted the Director of Housing (D of H) who is the agent for the clearance and demolition of THAs. D of H has confirmed that he has commenced demolition works on most of these THAs and will be able to complete them in 1996-97. In the circumstances, D of L concludes that there is little scope for re-scheduling these works but proposes to expedite their completion within this financial year in order to meet the programme for the delivery of the cleared sites for redevelopment. Furthermore, the deferral of demolition works will necessitate the provision of security services thereby leading to additional expenditure which otherwise would not be necessary.

10. In 1995-96 D of L disbursed $1,900,000 to the D of H for the demolition and clearance of THA sites which have since then been reverted to the Government. D of L anticipates that the expenditure will rise to about $16,100,000 in 1996-97 as detailed in paragraph 5 above. At the time of preparing the 1996-97 draft Estimates, he expected that any expenditure in clearing THAs would be comparable to the 1995-96 expenditure level and likewise be absorbed within the overall provision under Subhead 121. This has proved to be over-optimistic for the following reasons -

1. the requirements for recurrent maintenance and clearance of structures situated on Government land have proved to be greater than originally anticipated due to -
   1. the unexpected non-development clearance projects necessitated by landslide incidents, such as at Lei Yue Mun, where D of L has to clear squatter structures left after re-housing by the Government;
   2. a greater than expected number of squatter structures in the urban areas cleared and demolished and the proper fencing and maintenance of cleared sites on their reversion to the Government; and
2. the much faster rate of progress than expected of the evacuation of occupants of these THAs.

11. The bulk of the above are outside the control of D of L. Any delay to these works would not only be undesirable socially and environmentally but would also lead to escalation of costs if they were to be carried out at a later stage. Therefore, we need to seek supplementary provision of $18,100,000 to enable D of L to complete these works in 1996-97.

FINANCIAL IMPLICATIONS

12. If Members approve the proposal, we will offset the supplementary provision required by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.

BACKGROUND INFORMATION

13. We have under delegated authority increased the approved provision for Subhead 121 from $29,157,000 to $35,557,000 by approving supplementary provision of $6,400,000, offset by deleting an equivalent amount under Subhead 149 General departmental expenses of Head 91 Lands Department. This is to meet the increased expenditure for maintenance of Government land and the maintenance of the new Land Information System upon the expiry of its warranty period.

Planning, Environment and Lands Branch

January 1997

*..Pre-1984 THAs

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Enclosure to FCR(96-97)97

Analysis of expenditure under
Head 91 Lands Department Subhead 121 Contract maintenance

$'000

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