For discussion PWSC(96-97)79
on 18 December 1996

ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 707 - NEW TOWNS AND URBAN AREA DEVELOPMENT
Hong Kong Island and Islands Development
Civil Engineering - Land development
Water Supplies - Combined fresh/salt water supply projects
426CL - North Lantau phase 2A development in Tung Chung, roads and drains
75WC - North Lantau water supply - distribution mains in Tung Chung development phase 2

Members are invited to recommend to Finance Committee -

1. the upgrading of part of 426CL, entitled "North Lantau phase 2A development in Tung Chung - roads and drains, stage 1", to Category A at an estimated cost of $448 million in money-of-the-day prices;
2. the upgrading of part of 75WC, entitled "North Lantau water supply - distribution mains in Tung Chung phase 2A development, stage 1", to Category A at an estimated cost of $49.6 million in money-of-the-day prices; and
3. the retention of the remainders of 426CL and 75WC in Category B, retitled "North Lantau phase 2A development in Tung Chung - roads and drains, stage 2" and "North Lantau water supply - distribution mains in Tung Chung phase 2A development, stage 2" respectively.

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PROBLEM
PROPOSAL
PROJECT SCOPE AND NATURE
JUSTIFICATION
FINANCIAL IMPLICATIONS
PUBLIC CONSULTATION
ENVIRONMENTAL IMPLICATIONS
LAND ACQUISITION
BACKGROUND INFORMATION
426CL - North Lantau phase 2A development in Tung Chung, roads
and drains
75WC - North Lantau water supply - distribution mains in Tung Chung
development phase 2

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PROBLEM

There are no roads, drains and watermains serving the phase 2A development in Tung Chung.

PROPOSAL

2. The Director of Territory Development proposes -

1. with the support of the Secretary for Planning, Environment and Lands, to upgrade part of 426CL to Category A at an estimated cost of $448 million in money-of-the-day (MOD) prices for the construction of roads and drains for the phase 2A development in Tung Chung; and
2. with the support of the Secretary for Works and the agreement of the Director of Water Supplies, to upgrade part of 75WC to Category A at an estimated cost of $49.6 million in MOD prices for the laying of watermains for the phase 2A development in Tung Chung.

PROJECT SCOPE AND NATURE

3. The scope of 426CL covers the provision of formed and serviced land for the phase 2A development in Tung Chung. In January 1995, Finance Committee (FC) approved the upgrading of part of 426CL to Category A (see paragraph 20 below). Remaining works under the project comprise the construction of -

1. about 4 kilometres of roads with associated footpaths, cycle tracks and landscaping works;
2. a highway bridge;
3. a pedestrian/cycle bridge; and
4. associated drainage and sewerage works.

4. The scope of 75WC comprises -

1. laying of about 8 kilometres of fresh and salt water mains of 100 to 800 millimetres diameter; and
2. construction of a seawater intake culvert.

5. The works we now propose to upgrade to Category A comprise the construction/laying of -

426CL

1. about 3.6 kilometres of roads (including the road works for Roads P1, P2, L2) with associated footpaths, cycle tracks and landscaping works;
2. a highway bridge;
3. a pedestrian/cycle bridge;
4. associated drainage and sewerage works; and

   75WC

5. about 7.2 kilometres of fresh and salt watermains of 100 to 800 millimetres diameter.

JUSTIFICATION

6. The phase 2A development in Tung Chung New Town covers an area of about 55 hectares which will accommodate a population of about 25 000 by 2002. The residential developments in areas 11, 15, 19 and 21 are scheduled to be completed in stages from late 1998 to mid 2002. To tie in with these developments, we need to start the supporting engineering infrastructure works in March 1997 for completion in stages from September 1998 to September 1999.

7. To serve the phase 2A development, we will construct roads together with the associated footpaths, cycle tracks, drains and sewers under 426CL. We will construct a highway bridge over Road L2 to provide a road link (Road P2) between the North Lantau Expressway and the development. The proposed pedestrian/cycle bridge will provide a safe grade-separated crossing over Road P1 for pedestrians and cyclists.

8. To avoid interfacing problems on site, we propose to lay the fresh and salt watermains under 75WC in conjunction with the road works under 426CL.

FINANCIAL IMPLICATIONS

9. We estimate the total capital cost to be $497.6 million in MOD prices (see paragraph 10 below), made up as follows -

A breakdown by man months of the estimate for consultants’ fees is at the Enclosure .

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

11. We have derived the MOD estimate on the basis of the Government’s forecasts of trend labour and construction prices for the period 1997 to 2001. We will tender the proposed works under a lump sum contract because we have firm quantities for the majority of the works. We will provide for adjustment due to inflation in the contract because the construction period will last longer than 21 months.

12. We estimate the annually recurrent expenditure to be $6.24 million, of which $210,000 (in respect of the sewerage works) will be charged to the Sewage Services Trading Fund. The sewerage works will, upon completion, become assets in the Fund valued at cost subject to the Legislative Council passing a Resolution on appropriation of assets to the Fund.

13. Based on the current level of sewage charges and current water consumption, the proposed sewerage works under 426CL will only have negligible impact on sewage charges in real terms.

14. The waterworks under 75WC will lead to an increase in water charges by less than 0.1%¹ in real terms by 1999.

PUBLIC CONSULTATION

15. We consulted the Islands District Board on 15 April 1996. Members had no objection to the proposed works. We gazetted the road works under the Roads (Works, Use and Compensation) Ordinance on 2 August 1996. We received no objections.

ENVIRONMENTAL IMPLICATIONS

16. We engaged consultants to complete an environmental impact assessment for the North Lantau Development Study in May 1992. Part of the environmental impact assessment covered the development in Tung Chung.

17. In respect of the phase 2A development in Tung Chung, the environmental impact assessment identified that there would be traffic noise impact on the nearby planned private residential development and schools. To keep noise levels within the standards stipulated in the Hong Kong Planning Standards and Guidelines, the North Lantau Development Study and the Tung Chung Town Centre Study recommend the provision of low noise road surfacing on a number of local roads. We will provide such surfacing at an estimated cost of $8.5 million, which has been included in the overall cost of the project.

18. The environmental impact assessment also concluded that construction noise and dust impact could affect both existing and new sensitive receivers and that mitigation measures would be necessary. We will incorporate noise mitigation and dust suppression measures in the contract conditions to keep such impacts within established standards and guidelines. These mitigation measures include the use of silenced plant, noise screening and insulation, water spraying, traffic speed control on unpaved roads and minimising the use of earth stockpiles and surcharges, etc.

LAND ACQUISITION

19. The proposed works do not require land acquisition.

BACKGROUND INFORMATION

20. We upgraded 426CL to Category B in October 1993 for the provision of formed and serviced land for the phase 2A development in Tung Chung. In January 1995, the Finance Committee approved the upgrading of part of 426CL to Category A as 451CL "North Lantau phase IIA development in Tung Chung, reclamation works" at an estimated cost of $530 million in MOD prices.

21. We included 75WC in Category B in April 1995.

22. We have engaged consultants to undertake the investigation and design for those works under 426CL and 75WC which we now propose to upgrade to Category A. We have charged the cost of $5.2 million to the block allocation Subhead 7100CX "New towns and urban area works, studies and investigations for items selected in Category D of the Public Works Programme". The consultants have completed the detailed design and drawings. We plan to start the proposed works in March 1997 for completion in phases from September 1998 to September 1999.

23. We shall review the programme for the remaining works of 426CL and 75WC in the light of the recommendations of the Territorial Development Strategy Review which is scheduled to conclude in early 1997.

(JJ142)

1 -- This is calculated on the assumption that the demand remains static during the period from 1996 to 1999 and that the amount of Government subsidy to waterworks operations is to be contained at the present level.

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Enclosure to PWSC(96-97)79

426CL - North Lantau phase 2A development in Tung Chung, roads and drains
75WC - North Lantau water supply - distribution mains in Tung Chung
development phase 2

Breakdown of the estimate for consultants’ fees for construction stage

^*MPS = Master Pay Scale

Notes

1. A multiplier factor of 3 is applied to the average MPS point to arrive at the full staff costs including the consultants’ overheads and profit, as the staff will be employed in the consultants’ offices. (At 1.4.95, MPS pt. 40 = $51,440 p.m. and MPS pt. 16 = $17,270 p.m.)

2. The figures given above are based on estimates prepared by the Director of Territory Development. The consultancy works for this project has been included as part of the overall consultancy agreement for New Town Development at North Lantau.

(JJ142)

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