PWSC(97-98)110
For discussion
on 11 February 1998

ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 711 - HOUSING
Water Supplies - Fresh and salt water supplies
82WC - Fresh and flushing water reticulation systems for Tin Shui Wai Reserve Zone

Members are invited to recommend to Finance Committee -

1. the upgrading of part of 82WC, entitled "Fresh and flushing water reticulation systems for Tin Shui Wai Reserve Zone, stage 1" to Category A at an estimated cost of $73.0 million in money-of-the-day prices; and

2. the retention of the remainder of 82WC, re-titled "Fresh and flushing water reticulation systems for Tin Shui Wai Reserve Zone - remaining works", in Category B.

PROBLEM

There is at present no fresh and flushing water supplies to serve the proposed developments in the Tin Shui Wai (TSW) Reserve Zone.

PROPOSAL

2. The Director of Water Supplies (DWS), with the support of the Secretary for Housing, proposes to upgrade part of 82WC to Category A at an estimated cost of $73.0 million in money-of-the-day (MOD) prices for the laying of fresh and flushing water mains in the TSW Reserve Zone.

PROJECT SCOPE AND NATURE

3. The full scope of works under 82WC comprises the laying of about 6.1 kilometres of fresh water mains and 3.7 kilometres of flushing water mains in the TSW Reserve Zone.

4. The part of 82WC we now propose to upgrade to Category A comprises the laying of about 4.8 kilometres of fresh water mains of 300 to 700 millimetres diameter and 3.7 kilometres of flushing water mains of 200 to 400 millimetres diameter under the works described in paragraph 3 above.

JUSTIFICATION

5. The Government has decided to proceed with the housing developments in the TSW Reserve Zone with commencement of population intake in October 2000. Upon full development, the area will accommodate a population of about 121 000 persons, resulting in a fresh water demand of about 33 000 cubic metres per day and a flushing water demand of about 8 500 cubic metres per day. As there are at present no water mains in the TSW Reserve Zone, it is necessary to extend the existing fresh and flushing water reticulation systems ¹ from the TSW Development Zone to the TSW Reserve Zone to provide adequate fresh and flushing water to the area.

6. The Director of Territory Development (DTD) has a site formation and roadworks project under 561CL² "Tin Shui Wai further development - engineering infrastructure and remaining site formation works" which includes roadworks inside the Reserve Zone. The mainlaying works described in paragraph 4 above will fall within the project boundaries of 561CL. To avoid unnecessary road opening and interface problems arising from two contractors working on the same site, we will incorporate the mainlaying works under this project into the roadworks contract under 561CL.

FINANCIAL IMPLICATIONS

7. We estimate the capital cost of the project to be $73.0 million in MOD prices (see paragraph 8 below), made up as follows -

			$ million
(a)	Pipe materials		10.6
(b)	Mainlaying		29.0
(c)	Consultants?fees		5.5
	(i) Construction stage	0.5
	(ii) Resident site staff costs	5.0
(d)	Contingencies		4.4
Sub-total			49.5	(at December 1996 prices)
(e)	Inflation allowance		23.5
Total			73.0	(in MOD prices)

A breakdown by man months of the estimate for consultants' fees and the resident site staff expenses is at the Enclosure.

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

Year	$ million (Dec 1996)	Price adjustment factor	$ million (MOD)
1998 - 99	0.1	1.16358	0.1
1999 - 2000	6.0	1.26830	7.6
2000 - 01	13.1	1.38244	18.1
2001 - 02	19.1	1.50686	28.8
2002 - 03	11.2	1.64248	18.4
	_____		_____
	49.5		73.0
	_____		_____

9. We have derived the MOD estimates on the basis of the Government's forecast of trend labour and construction prices for the period 1998 to 2003. We will incorporate the proposed mainlaying works into DTD's roadworks contracts which will be on a remeasurement basis because the works involve extensive sub-surface and foundation works, the quantities of which are subject to variation during construction to suit the actual site conditions. We will provide inflation adjustment for inflation in the contract because the construction period will be longer than 21 months.

10. We estimate the additional annually recurrent expenditure to be $493,776.

11. This project by itself would lead to an increase in water charges by a maximum of 0.05% in real terms by 2003³ .

PUBLIC CONSULTATION

12. We consulted the Environmental Improvement Committee of the Yuen Long Provisional District Board on 27 November 1997. The Committee supported the project.

ENVIRONMENTAL IMPLICATIONS

13. The Director of Environmental Protection completed an environmental review in June 1995 and concluded that the project would have no long term environmental impact and no Environmental Impact Assessment would be required. We will control noise, dust and site run-off nuisance to comply with established standards and guidelines through implementation of mitigation measures in relevant works contracts.

LAND ACQUISITION

14. The project does not require land acquisition.

BACKGROUND INFORMATION

15. We upgraded 82WC to Category B in September 1995. As regards the works which we now propose to upgrade to Category A, DWS has engaged consultants to complete the detailed design for the proposed mainlaying works at a cost of $1.4 million. This amount was charged to block allocation Subhead B100HX "Minor housing development related works, studies and investigations for items in Category D of the Public Works Programme". We plan to start the proposed mainlaying works in October 1998 for completion in phases from October 2000 to end 2001 to tie in with the housing development programme.

16. DWS is continuing with the detailed design work for the remainder of the mainlaying under the remaining part of 82WC. We plan to start the construction works in mid 2000 for completion in mid 2003 to tie in with the roadworks programme under the remaining part of 561CL.

Housing Bureau
January 1998

1.A reticulation system is a water supply network system serving a particular area. The system in this project covers mainlaying works within the TSW Reserve Zone. Water will be provided by the proposed Tan Kwai Tsuen north fresh water reservoir which will commence construction works in April 1998 under B270WF (approved by FC on 12 December 1997).

2. We upgraded 561CL to Category B in July 1997. A related paper, PWSC(97-98)109, for the upgrading of part of 561CL under Head 711 to Category A is also submitted for Members?approval at this meeting.

3. The increase in water charges is calculated on the assumption that the water demand remains static during the period from 1998 to 2003 and the amount of Government subsidy to waterworks operations is to be contained at the present level.

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Enclosure to PWSC(97-98)110

82WC - Fresh and flushing water reticulation systems for Tin Shui Wai Reserve Zone

DETAILS OF CONSULTANTS' FEES

Breakdown of estimates for consultants' fees

Consultants' staff costs		Estimated man months	Average MPS* salary point	Multiplier factor	Estimated fee ($ million)
(a) Construction stage
(i) Contract administration	Professional Technical	1.9 1.5	40 16	3.0 3.0	0.32 0.08
(ii) Preparation of as-built drawings	Professional Technical	0.3 0.9	40 16	3.0 3.0	0.05 0.05
(b) Resident site staff cost
(i) Site supervision by resident site staff employed by consultants	Professional Technical	18.5 73.0	40 16	2.1 2.1	2.15 2.85
					_____
Total consultants' staff costs					5.50
					_____

* MPS = Master Pay Scale

Notes

1. A multiplier factor of 3.0 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 1.4.96, MPS pt. 40 = $55,390 p.m. and MPS pt. 16 = $18,595 p.m.). A multiplier factor of 2.1 is applied to the average MPS in the case of site staff supplied by the consultants.

   Enclosure to PWSC(97-98)110 Page 2

2. The figures given above are based on estimates prepared by the Director of Water Supplies. Since the consultancy works for this project will be included as part of the overall consultancy agreement for the Tin Shui Wai further development, we will only know the actual consultants' fees upon finalisation of the account of the works contract.

(DD1176)