For discussion PWSC(96-97)75
on 4 December 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 1, construction of Tai Po treatment works and pumping station

Members are invited to recommend to Finance Committee the upgrading of the remaining part of 140WF, entitled "Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - stage 1, construction of Tai Po treatment works and pumping station" to Category A at an estimated cost of $2,226.9 million in money-of-the-day prices.

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PROBLEM
PROPOSAL
PROJECT SCOPE AND NATURE
JUSTIFICATION
FINANCIAL IMPLICATIONS
PUBLIC CONSULTATION
ENVIRONMENTAL IMPLICATIONS
LAND ACQUISITION
BACKGROUND INFORMATION

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PROBLEM

We forecast that the total capacity of water treatment works supplying water to 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 (DWS), with the support of the Secretary for Housing, proposes to upgrade the remaining part of 140WF to Category A at an estimated cost of $2,226.9 million in money-of-the-day (MOD) prices for the construction of the treatment works, the treated water pumping station and associated pumping facilities in Tai Po.

PROJECT SCOPE AND NATURE

3. The full scope of 140WF comprises the investigation, design and construction of a 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 the stage 1 daily treated water supply of 250 000 cubic metres to the metropolitan area and north-eastern New Territories by early 2000. The capacity of the system can be expanded in further stages up to 1 200 000 cubic metres per day when the need arises in future. Under the stage 1 work, we will also form the sites for the water treatment works and the primary service reservoir and construct the aqueducts and treated water pumping station structure 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. Finance Committee has approved the upgrading of different parts of 140WF to Category A (see paragraphs 21 to 23). The scope of the remaining part of 140WF which we now propose to upgrade to Category A comprises the following -

1. site formation for the treatment works and the treated water pumping station to the ultimate capacity of 1 200 000 cubic metres per day;
2. construction of a water treatment works at Tai Po area 38, including electrical and mechanical works, to cater for stage 1 supply capacity of 250 000 cubic metres per day with necessary provision for future expansion to its ultimate capacity of 1 200 000 cubic metres per day;
3. construction of a treated water pumping station within the treatment works site to its ultimate capacity of 1 200 000 cubic metres per day but initially equipped with pumpsets for the stage 1 supply capacity of 250 000 cubic metres per day; and
4. supply and installation of raw water pumps and surge suppression facilities in the existing Tai Po Tau raw water pumping station to cater for the stage 1 supply capacity of 250 000 cubic metres per day.

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 will increase to 1 816 000 cubic metres for an estimated population of about 3 084 000. Upon commissioning of the new Ma On Shan treatment works in early 1997, 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 1, we will construct a new treatment works in Tai Po to provide a capacity of 250 000 cubic metres per day to meet the demand up to 2004. We will also make provision for future expansion of the treatment works to its ultimate capacity of 1 200 000 cubic metres per day.

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 April 2000 in pace with the construction of transfer facilities which is expected to commence in April 1997 under 272WF "Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - stage 1, construction of Butterfly Valley primary service reservoir and aqueducts from Tai Po to Butterfly Valley"¹ , we need to start the construction of the treatment works and pumping station in August 1997.

8. As DWS has insufficient in-house 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 supervision.

FINANCIAL IMPLICATIONS

9. We estimate the capital cost of the project to be $2,226.9 million in MOD prices (see paragraph 11 below), made up as follows -

10. The consultants’ fee in paragraph 9(b) above is an actual 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"2. We will reimburse the resident site staff expenses in paragraph 9(c) above to the consultants on a cost plus percentage basis.

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

12. We have derived the MOD estimate on the basis of the Government’s forecast of trend labour and construction prices for the period between 1997 and 2003. We will invite tenders for the works on a fixed-price lump-sum basis.

13. We estimate the additional annually recurrent expenditure to be $49.76 million.

14. This project by itself will lead to an increase in water charges by a maximum of 3% in real terms by 2004³ .

PUBLIC CONSULTATION

15. We consulted the Tai Po Rural Committee and the Tai Po District Board during the investigation study stage in June 1995 and also during the detailed design stage in June 1996. They both supported the project in principle, but have asked us to fully address the concerns expressed by villagers regarding the impact of the project on the vicinity. For this purpose, we have held a series of consultation meetings with the villagers concerned and revised the layout of the proposed water treatment works to address their ‘fung shui’ concerns. We have also addressed the villagers’ concerns on the water pipe alignment and will continue discussions with them about the arrangements for removal of affected graves. We are confident that we will be able to address their concerns fully and will continue to take their views into account in the implementation of the project.

ENVIRONMENTAL IMPLICATIONS

16. 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 in the treatment works and dispose of the treated sludge at landfills. We will provide washwater treatment facilities to treat washwater from Butterfly Valley primary service reservoir before discharge to the sewer.

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

18. We will implement Environmental Monitoring and Audit programmes to ensure the recommended mitigation measures are effective.

19. The consultants have conducted a Chlorine Hazard Assessment study for stage 1 of the proposed treatment works. The study indicates that the risks associated with the use of chlorine at the treatment works for stage 1 fall within established guidelines. We will implement the recommended safety measures to minimise the risks.

LAND ACQUISITION

20. We have to acquire 3.5 hectares of private land and clear 24.5 hectares of government land for the construction of the whole project. It will affect two families. The total estimated cost of acquisition and clearance is $172 million. We will charge the cost to Head 701 "Land Acquisition".

BACKGROUND INFORMATION

21. 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.

22. In July 1995, Finance Committee further approved the upgrading of part of 140WF as 219WF "Additional treatment and water transfer facilities for the metropolitan area 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 Tai Po treatment works and pumping station.

23. In July 1996, Finance Committee also approved the upgrading of part of 140WF as 272WF "Additional treatment and water transfer facilities for the metropolitan area and north-eastern New Territories - stage 1, 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 MOD prices for construction of the Butterfly Valley primary service reservoir and the aqueducts from Tai Po to Butterfly Valley. We expect to invite pre-qualified contractors to submit tenders for the works contracts for construction of the Butterfly Valley primary service reservoir and the aqueducts from Tai Po to Butterfly Valley in November 1996 for construction to commence in April 1997.

24. 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 contract for the Tai Po treatment works and pumping station in February 1997. We plan to start construction works in August 1997 for completion in April 2000.

1 -- Please see paragraph 23 for details.
2 -- Please see paragraph 22 for details of 219WF.
3 -- The water charges are calculated on the assumption that the demand remains static during the period from 1996 to 2004 and the amount of Government subsidy to the waterworks operations is to be contained at the present level.

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Enclosure to PWSC(95-97)75
140WF - Additional treatment and water transfer facilities for the
metropolitan area and north-eastern New Territories - stage 1,
construction of Tai Po treatment works and pumping station
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 actual tendered 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 fees when we have appointed the resident site staff.

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