PLC Paper No. CB(1)188
(These minutes have been seen by the Administration and cleared with the Chairman)
Ref: CB1/PL/PLW/1

LegCo Panel on Planning, Lands and Works

Minutes of meeting
held on Tuesday, 20 May 1997, at 10:30 a.m.
in Conference Room A of the Legislative Council Building

Members present :

    Hon Edward S T HO, OBE, JP (Chairman)
    Hon Albert CHAN Wai-yip (Deputy Chairman)
    Hon James TO Kun-sun
    Dr Hon Samuel WONG Ping-wai, OBE, FEng, JP
    Hon CHOY Kan-pui, JP
    Hon IP Kwok-him
    Hon NGAN Kam-chuen
    Dr Hon John TSE Wing-ling

Members absent :

    Hon LAU Wong-fat, OBE, JP
    Hon Ronald ARCULLI, OBE, JP
    Hon SIN Chung-kai
    Hon TSANG Kin-shing

Public officers attending :

Item IV
Mr Michael Byrne
Principal Assistant Secretary for Works
Mr A H Lamont
Assistant Director of Architectural Services

Item V & VI
Mr Esmond LEE
Principal Assistant Secretary for Planning, Lands & Works

Item V
Mr LAU Yiu-wah
Assistant Director of Buildings (Specialist)

Item VI
Mr Frank Phillips
Chief Estate Surveyor/Acquisition
Mr Tony LUI
Principal Land Executive (Fishermen Claims Assessment)
Lands Department

Clerk in attendance :

Miss Odelia LEUNG
Chief Assistant Secretary (1)1

Staff in attendance :

Mr Kenneth KWOK
Senior Assistant Secretary (1)2


I Confirmation of minutes of meeting

(LegCo Paper No. CB(1)1580, 1574 and 1488/96-97)

The minutes of meetings held on 18 February, 18 March and 15 April 1997 were confirmed.

II Date of next meeting and items for discussion

(List of outstanding items for discussion tabled)

Members agreed to discuss the following items at the next meeting to be held on 11 June 1997 at 10:30 am -

    redevelopment projects of the Land Development Corporation;
  1. compensation for loss of crop upon land resumption and appeal mechanism; and
  2. slope safety.

III Information papers issued since last meeting

(LegCo Paper Nos. CB(1)1310, 1370, 1499 and 1598/96-97)

Members noted the information papers issued since last meeting.

IV Design-and-build contracts administered by the Government

(LegCo Paper No. CB(1)1477/96-97)

The Chairman declared interest that his company had been awarded the tender for the Centralized Government Godown at Chai Wan and the Cheung Sha Wan Government Offices. The Principal Assistant Secretary for Works (PAS/W) said that as requested by members at the Panel meeting on 18 February 1997, the Administration had provided further information on design-and-build contracts including the benefits and possible disadvantages. The administrative guidelines on administering design-and-build contracts were currently under review.

Regarding claims made under design-and-build contracts listed in Attachment A to the paper, the Assistant Director of Architectural Services (AD/AS) said that as far as the projects of the Architectural Services Department (Arch SD) were concerned, the amount of claims were minimal both in volume and quantum as compared with the traditional projects. This might be explained by the unique nature of design-and-build projects in that problems showed up on site and were easier to be solved. Only one claim for $12 million had been lodged for the construction of the Centralized Government Godown in Chai Wan. Arch SD had made a preliminary assessment and paid $1.2 million to the contractor. The claim arose because of the need to adopt special measures to accommodate the centralized computerized storage racking system and to liaise with the client department, which had resulted in delay in the project. As regards the North District Hospital project, there was an initial claim for coordination of working drawings. The matter had been resolved at the contractor’s cost at about $25 million. Other than these two claims, no other contractual monetary claims under design-and-build contracts to date had been received.

The Chairman questioned if the small number of claims was attributed to the fact that many projects had not been completed. AD/AS responded that amongst the Arch SD projects listed in the information paper, the Centralized Government Godown at Chai Wan had been completed on time. The Disciplined Service Married Quarters at Ngan Chi Wan and Chai Wan were substantially completed. The North District Hospital was more than 75% complete. The remaining five projects were partially completed and were progressing on schedule.

On whether the Administration had the expertise to handle claims on design-and-build projects, AD/AS advised that the Administration had direct access to the Legal Department for legal advice. For large Arch SD design-and-build contracts, the contractors and the Administration appointed dispute-resolution advisers who were employed to give early advice on potential claims.

A member opined that unlike a traditional contract, building professionals such as architects and engineers were employed by the contractor in design-and-build contracts and might not be as impartial as they should be. He was concerned about the level of remuneration paid to these professionals and the level of resources put in by the Administration to monitor these projects. AD/AS responded that there was a pre-requisite for a design-and-build contractor to appoint a consultant from the Administration’s approved list. As was the case for traditional projects, there would be an in-house team for monitoring work. The Administration would still be responsible for project management and the project manager would take up the adjudication function. On the level of remuneration for professionals, it was governed by the industry.

A member opined that due to cost consideration, the resources allocated to the design of a design-and-build contract were normally limited. He was concerned whether this had affected the quality of design, resulting in frequent revision. PAS/W replied that since designs were made according to the project brief and were subject to the Administration’s scrutiny, re-design of a project had never occurred. On the basis of past design-and build projects, design fees constituted about 6% of the project costs comparable to the costs for commissioning a designer.

The Chairman enquired if the tender price for design-and-build contracts had been pushed up due to the requirements for fairly comprehensive design at the tender stage. PAS/W replied that tender prices were not necessarily increased as illustrated in some of the design-and-build projects of the New Airport Core Programme where the tender prices were lower than prior estimation based on traditional mode to conduct the projects. AD/AS supplemented that the Administration regularly discussed the matter with design-and-build contractors. In a value management seminar held in March 1997, Arch SD discussed with all appointed contractors and consultants the fundamental concerns of the industry. It was raised that since substantial expenses had been spent in preparing a tender, all tenders must be given fair consideration. The participants were also concerned that unclear requirements would drive up the tender cost. Arch SD acknowledged the need to avoid unambiguous requirements and requiring excessive details at the tender stage. Arch SD had undertaken to relay the industry’s concerns to the central Government.

In response to a member, AD/AS advised that the Arch SD Project Brief Design Vetting Committee, which was a standing committee, oversaw quality assurance procedures at four stages of projects, namely the preliminary design stage, the sketch design stage, the working stage and the construction stage. The Committee comprised the Deputy Director of Architectural Services and the head/representatives from various disciplines including architecture, structural engineering, building surveying and facility management. The Committee would examine whether a design could maximize the development potential of a site and meet the engineering conditions and the client’s requirements on aesthetics and functionality.

On the question of cost-effectiveness, AD/AS said that Arch SD carried out value management at each of the four stages of design-and-build projects in terms of cost per square metre. Members noted the comparable construction costs for design-and-build hospital projects and projects of a similar nature under the traditional approach. AD/AS added that by using design-and-build approach, the overall procurement time of a project could be shortened by about 12 to 14 months. In the case of hospitals, this could be reduced by 15 to 18 months. At the Chairman’s request, AD/AS agreed to give a comparison of the procurement time for the North District Hospital and a similar project under the traditional approach after completion of the former.

Admin

In view of the high construction costs for footbridges, members explored the feasibility for using design-and-build contracts for such construction. PAS/W replied that design-and-build contracts were not particularly suitable for small projects with standard designs. A member responded that some design-and-build projects such as the Rehabilitation of Shek O Quarry and the Rehabilitation of Lamma Quarry were smaller in scale than footbridge construction. The Administration should seriously consider applying the design-and-build approach to construct footbridges. PAS/W undertook to reflect members’ views to the relevant departments and check whether design-and-build contracts were particularly suitable for quarry projects.

Admin

In response to a member, PAS/W said that a firm decision had yet to be taken on using design-and-build approach for all Government projects albeit identification of some works such as government offices or Hospital Authority projects as potential design-and-build projects.

Admin

Some members were concerned about aesthetic aspects of design and suggested increasing the weight of aesthetics in assessing design-and-build bids. AD/AS responded that under the guidelines agreed by the Secretary for the Treasury, cost and design feature should constitute 50% and 15% of the assessment respectively. In assessing architectural aspect of a tender submission, aesthetics were accorded one-third of the weight. A member suggested adopting a two-tier assessment system under which submissions with low quality designs would be screened out at the first stage. The screen-in tenders would then be assessed in accordance with other selection criteria such as cost. Such an approach would prevent award of low-priced tenders with poor quality. AD/AS responded that presently the cost and the design of a project were considered separately. However, tender submissions had to be considered as a package in the end. The Administration would discuss with the industry on a two-stage tender submission proposal. PAS/W added that the Administration would shortly introduce a weighed system for assessment of tender including such factors as price, quality and performance.

Admin

V Control over advertisement signboards

(LegCo Paper No. CB(1)1562/96-97(01) and (02))

At the invitation of the Chairman, the Principal Assistant Secretary for Planning, Environment and Lands (PAS/PEL) introduced the paper. PAS/PEL explained that the Administration had thoroughly considered introducing a licensing system for overhanging signboards several years ago but remained of the view that this would not offer any significant advantages over the existing arrangements. Most signboards were not dangerous and did not pose a public hazard. As the erection of signboards required the consent of owners of the building, owners should have the responsibility to ensure their safety. The issue of a licence by itself did not guarantee the safety of the signboards. As a matter of fact, signboards were controlled by various legislation including the Buildings Ordinance, Cap 123, the Building Management Ordinance, Cap 344, the Fire Services Ordinance, Cap. 95, the Public Health and Municipal Services Ordinance, Cap 132, and the Road Traffic Ordinance, Cap 374. Given the resource constraints, the Administration would continue to focus its efforts on removal of dangerous signboards.

Members were of the view that the Administration should adopt a pro-active approach to resolve the problem. If the problem lay with resources, a self-financed licensing scheme would precisely be the answer. The Assistant Director of Buildings said that the Buildings Department (BD) had sent letters to all District Boards enlisting their assistance in notifying the Department of any suspected dangerous signboards. The Administration estimated that currently there were about 180,000 to 200,000 signboards. Since November 1994, BD had inspected about 20,000 signboards and removed about 2,000 signboards. About $2 million was spent on an average each year in removing dangerous signboards and about $570,000 could be recovered. At present, 28 staff in the Dangerous Buildings Section carried out inspection of signboards one day per month.

Members pointed out that although theoretically the erection of signboards outside a building required the owners’ consent, in actual situation this was not necessarily the case. Abandoned signboards made up a major part of the problem. Members were of the view that the Administration should seriously consider the viability of a licensing system. Not only would all the inspection costs be covered but also it would be easier to identify the owners of signboards should an accident occur. Moreover, it was not unfair to charge the owners of signboards occupying public space for commercial purposes.

PAS/PEL explained that charging (under the proposed licensing system) and resource allocation (within the Administration) were separate issues. The Administration still believed that a licensing system would not be a resource-efficient solution to the problem.

Members were disappointed with the Administration’s response. Hon Albert CHAN proposed and all members who were present at the meeting passed the following motion -

"that this Panel reproves the Administration for its indifferent attitude in resolving the problems caused by the proliferation of overhanging advertisement signboards".

(Post-meeting note: the above motion was conveyed to the Secretary for Planning, Environment and Lands vide a letter dated 23 May 1997.)

VI Pilot scheme on contracting out certain land resumption works in the New Territories

(LegCo Paper No. CB(1)1562/96-97(03))

PAS/PEL briefed members on the paper. In gist, the Administration forecast that the projected demand for land acquisition and clearance over the next five years would exceed significantly the Lands Department’s ability to meet this demand in terms of staff resources. One possible option to solve the problem was to contract out certain land acquisition work to the private sector. This approach would relieve the pressure on the Lands Department and speed up the land resumption process. A pilot scheme was proposed to test the feasibility and effectiveness of employing consultants to undertake certain activities in the land acquisition which did not require the exercise of statutory authority. Subject to the Finance Committee’s approval for funding in June 1997, the pilot scheme would commence in September 1997 for completion in about two and a half years.

A member was concerned that consultants might need to enter private premises for carrying out certain activities, such as surveying. He questioned whether this could be achieved without the exercise of statutory power. The Chief Estate Surveyor/Acquisition (CES/A) responded that the Administration did not intend to allow consultants to enter private properties without authority. The Director of Lands, being the landlord of government land, could authorize consultants to enter the land for legitimate purposes. The consultants would only carry out works which required repetitive assessments, for example surveying and measuring the affected domestic and farm structures and ascertaining the boundary of the resumed land. Should conflict arise between consultants and residents, the staff of the Lands Department would take it over. Activities such as signing cancellation letters for short term tenancies and licences which would require the exercise of statutory powers would still be carried out by the Lands Department.

On the way to deal with complaints against consultants, CES/A and PAS/PEL said that since the Administration was the employer of consultants, it would be held responsible for their behaviour. The public could still resort to the existing channels for complaints. Consultant would be liable for breach of contract. PAS/PEL noted members’ view that the powers and responsibilities of consultants should be clearly delineated.

VII Any other business

There being no other business, the meeting ended at 12:40 pm.

Provisional Legislative Council Secretariat
2 September 1997

Last Updated on 21 August 1998