PWSC(97-98)136
For discussion
on 17 February 1998
ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Medical Subventions
26MM - Redevelopment of Specialist Out-patient Department, Nursing School and Pupil Nurse Hostel in Our Lady of Maryknoll Hospital
Members are invited to recommend to Finance Committee the approval of a revision in the approved scope of the project for the construction of an additional storey.
PROBLEM
Site constraints at Our Lady of Maryknoll Hospital (OLMH) limit the possibility for horizontal expansion to meet future spatial needs of the hospital.
PROPOSAL
2. The Hospital Authority (HA), with the support of the Secretary for Health and Welfare, proposes to revise the approved scope of this project by adding an additional floor to the originally proposed four-storey building to optimise site development potential for future provision of additional facilities.
PROJECT SCOPE AND NATURE
3. On 14 February 1997, under FCR(96-97)103, Finance Committee (FC) members approved 26MM for the construction of a new four-storey building with a gross floor area of 4 200 square metres to reprovision the Specialist Out-patient Department (SOPD), Nursing School and Pupil Hostel in OLMH. The new building will accommodate the following -
- a SOPD with 25 consultation rooms and supporting facilities including a minor operating theatre, medical record storage area, a pharmacy and a clinical laboratory;
- a Nursing School with two classrooms, two practical rooms, staff offices and ancillary facilities; and
- a Pupil Nurse Hostel with accommodation for 72 pupil nurses and ancillary facilities.
4. In order to optimise site development potential, we propose to add one storey to the new building to increase its total gross floor area to 5 080 square metres for the future expansion of OLMH. This additional storey is intended for ambulatory care services and will initially be provided with basic structure and external finishes only.
JUSTIFICATION
5. The original scope of the project was designed to meet the more urgent needs of OLMH on specialist out-patient services and training of nurses. After FC's approval in February 1997, HA made a re-assessment of the services provided by OLMH. The re-assessment identified the need to introduce additional ambulatory care services in OLMH as a cost-effective and efficient means to meet increasing demand for health care services. HA has introduced such services in other public hospitals with encouraging results. In this regard, the OLMH Board has successfully obtained additional private fundings to meet the capital cost of building the additional storey to accommodate the ambulatory care facilities, details of which are being worked out by HA.
6. At present, OLMH occupies a confined site of approximately one hectare in area. With the construction of the new building to accommodate the SOPD, Nursing School and Pupil Nurse Hostel, the potential for horizontal expansion in OLMH has been exhausted. As the original design of other major buildings of OLMH does not allow for vertical expansion, any future hospital expansion can only be carried out vertically in the new building to be constructed.
7. We consider it more cost-effective to utilize the existing redevelopment opportunity to integrate the proposed additional storey into the new building. The construction of an additional storey at a later date may cause disruption to the operation of the hospital. There will also be technical difficulties in constructing the additional storey later unless provisions for additional infrastructural facilities are made in advance.
FINANCIAL IMPLICATIONS
8. Under the originally approved scope of the project, FC members approved a capital commitment of $82.9 million in money-of-the-day (MOD) prices. The OLMH Board (the Board) undertook to contribute a minimum of $5 million over two years towards the project and endeavour to solicit additional donations for this purpose during the course of the project. Since then, the Board has raised additional funds to increase the contribution towards the original redevelopment work from $5 million by $4 million to $9 million. Separately, the Board has also agreed to meet the full cost of the proposed additional storey at $7.4 million (in MOD prices). Therefore, this proposed revision of the approved project scope will be at no additional cost to Government.
9. A comparison of the approved and revised project estimates (made by HA and vetted by D Arch S) by component is as follows -
|
|
Approved project estimate at December 1995 prices
$ million
|
Approved estimate / adjusted to December 1996
prices
$ million
|
Revised estimate at December 1996
prices
$ million |
|
(a)
|
Demolition, site investigation & survey
|
4.3
|
4.6
|
2.9 |
|
(b)
|
Piling
|
5.3
|
5.7
|
5.6 |
|
(d)
|
Building
|
32.0
|
34.6
|
40.7 |
|
(e)
|
Building services
|
13.7
|
14.8
|
16.2 |
|
(f)
|
Drainage & external works
|
2.7
|
2.9
|
3.0 |
|
(g)
|
Consultants' fees & related services
|
2.0
|
2.5
|
3.2 |
|
(h)
|
Furniture and equipment
|
4.8
|
5.2
|
5.2 |
|
(i)
|
Contingencies
|
3.9
|
4.2
|
3.1 |
| Total-project cost |
68.7 | 74.5 |
79.9 |
|
(j)
|
Inflation adjustment
|
19.2
|
13.4
|
19.4 |
| Project estimate in MOD prices |
87.9 | 87.9 |
99.3 |
|
(i)
|
less Contribution from OLMH (in MOD prices)
|
(5.0)
|
(5.0)
|
(16.4)
|
| Project cost to be met by government subvention in MOD prices |
82.9 | 82.9 |
82.9 |
10. For items (a) "Demolition, site investigation & survey" and (b) "Piling" of paragraph 9 above, the cost difference between the approved estimate and the revised estimate (both at December 1996 prices) is the result of competitive tenders returned. For item (c) "Building", $3.7 million of the increase is due to the proposed revision in project scope and $2.4 million due to the upward movement in tender prices. For item (d) "Building services", $0.5 million of the increase is due to the proposed change in project scope and $0.9 million due to upward movement in tender prices. For item (f) "Consultants' fee & related services", the increase is the net result of the changes in items (a) to (e) above. A breakdown of the estimates for consultancy fees for the revised project is at the Enclosure.
11. A revised estimate of the cashflow for the project is as follows -
|
Year
|
Original cashflow
$ million (MOD)
|
|
Revised cashflow
$ million (MOD)
|
|
HKG
|
OLMH
|
|
Total
|
|
HKG
|
OLMH
|
Total
|
|
Up to 1997-98
|
14.7
|
2.0
|
16.7
|
|
8.0
|
2.0
|
10.0
|
|
1998-99
|
66.3
|
3.0
|
69.3
|
|
48.0
|
14.4
|
62.4
|
|
1999-00
|
1.9
|
0
|
1.9
|
|
24.5
|
0
|
24.5
|
|
2000-01
|
0
|
0
|
0
|
|
2.4
|
0
|
2.4
|
|
82.9
|
5.0
|
87.9
|
|
82.9
|
16.4
|
99.3
|
12. The proposed financial commitments of the Government and the OLMH are therefore as follows -
|
HKG
|
OLMH
|
Total |
|
|
$ million
(MOD)
|
|
|
Lower ground floor to second floor
|
82.9
|
9.0
|
91.9 |
|
Third floor
|
0
|
7.4
|
7.4 |
|
82.9
|
16.4
|
99.3 |
13. We base the revised MOD estimate on the value of works completed to date (which include demolition, site investigation & surveys and piling) and the tenders returned for the superstructure works. To ensure early completion of the project, HA has tendered the superstructure works under a fixed-price lump-sum contract. Acceptance of the tender is subject to members' approval of the proposed revised project scope. HA plans to start the superstructure works in March 1998 for completion in April 1999.
14. HA will fit out and equip the additional storey for the intended ambulatory care services within one year after the completion of the project. HA will also fund all the cost for fitting out and equipping the additional floor and the annually recurrent expenditure arising from the proposed change in project scope through redeployment of existing resources.
PUBLIC CONSULTATION
15. Since the proposed additional storey is additional to the provision of facilities covered by the original project scope, we consider that public consultation on the proposed revision is not necessary.
ENVIRONMENTAL IMPLICATIONS
16. In February 1998, HA completed a revised Preliminary Environmental Review (PER) covering the proposed additional floor. The revised PER confirmed and the Director of Environmental Protection agreed that there is no need for an Environmental Impact Assessment. HA will arrange for the management, storage, transport and disposal of chemical and clinical wastes in accordance with established guidelines and codes of practice. For short-term impacts during construction, HA will control noise, dust and site run-off nuisances to within established standards and guidelines through the implementation of appropriate mitigation measures in relevant contracts.
LAND ACQUISITION
17. This proposed revision of project scope does not require any land acquisition.
BACKGROUND INFORMATION
18. OLMH is an acute general hospital with a total of 252 beds serving mainly the local community in Wong Tai Sin. It provides a wide range of clinical specialities including general medicine, general surgery, obstetrics, gynaecology, paediatrics and hospice care. The hospital also provides specialist out-patient consultation, day surgery, community nursing services and outreach medical services. A nursing school catering for 150 pupil nurses has been in operation since 1971.
Health and Welfare Bureau
January 1998
Enclosure to PWSC (97-98)136
8026MM - Redevelopment of Specialist Out-patient Department,
Nursing School and Pupil Nurse Hostel
in Our Lady of Maryknoll Hospital
Details of Consultants' Fees
Breakdown of estimates for consultants' fees
|
Category of works/items
|
|
Estimated man months
|
Average MPS salary point
|
Multiplier factor
|
Estimated
fees
($ million)
|
|
(I)
|
Quantity Surveying
|
|
|
|
|
|
|
(a)
|
Tender assessment
|
Professional
|
0.2
|
40
|
3.0
|
0.03
|
|
|
Technical
|
0.3
|
16
|
3.0
|
0.02
|
|
(b)
|
Contract administration
|
Professional
|
1.8
|
40
|
3.0
|
0.30
|
|
|
Technical
|
5.0
|
16
|
3.0
|
0.27
|
|
|
|
|
|
Sub-total
|
0.62
|
|
(II)
|
Architectural
|
|
|
|
|
|
|
(a)
|
Tender assessment
|
Professional
|
2.0
|
40
|
3.0
|
0.33
|
|
|
Technical
|
4.1
|
16
|
3.0
|
0.23
|
|
(b)
|
Resident site
|
Professional
|
5.9
|
40
|
2.1
|
0.69
|
|
supervision staff
|
Technical
|
10.9
|
16
|
2.1
|
0.41
|
|
|
|
|
|
Sub-total
|
1.66
|
|
(III)
|
Structural Engineering
|
|
|
|
|
|
(a)
|
Tender assessment
|
Professional
|
0.5
|
40
|
3.0
|
0.08
|
|
|
Technical
|
0.9
|
16
|
3.0
|
0.05
|
|
(b)
|
Resident site
|
Professional
|
1.1
|
40
|
2.1
|
0.12
|
|
supervision staff
|
Technical
|
3.3
|
16
|
2.1
|
0.13
|
|
|
|
|
|
Sub-total
|
0.38
|
|
(IV)
|
Building Services Engineering
|
|
|
|
|
|
(a)
|
Tender assessment
|
Professional
|
0.3
|
40
|
3.0
|
0.05
|
|
|
Technical
|
0.9
|
16
|
3.0
|
0.05
|
|
(b)
|
Resident site
|
Professional
|
1.2
|
40
|
2.1
|
0.14
|
|
supervision staff
|
Technical
|
7.1
|
16
|
2.1
|
0.28
|
|
|
|
|
|
Sub-total
|
0.52
|
|
(V)
|
Out-of-pocket Expenses
|
|
|
|
|
|
(a)
|
Printing cost
|
|
|
|
|
0.02
|
|
|
|
|
|
Sub-total
|
0.02
|
|
|
|
|
|
Total
|
3.20
|
Notes
1. We apply a multiplier of 3 to the average Master Pay Scale (MPS) point to arrive at the full costs including the consultant's overheads and profit, as the consultant will employ staff in his office. (At 1 April 1996, MPS points 40 and 16 are equivalent to $55,390 and $18,595 per month respectively.) A multiplier factor of 2.1 is applied in the case of site staff supplied by the consultants.
2. The estimated consultants' fees represent 4% of the total construction estimate, and cover the quantity surveying, architectural, structural engineering and building services disciplines.
