PWSC(97-98)141
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
37MM - Redevelopment of Castle Peak Hospital, phase 2

Members are invited to recommend to Finance Committee the approval of a commitment of $1,470.8 million in money-of-the-day prices for the phase 2 redevelopment of Castle Peak Hospital.

PROBLEM

Castle Peak Hospital (CPH) has inadequate space and substandard treatment facilities to meet the present day requirements for the delivery of psychiatric care and rehabilitation services.

PROPOSAL

2. The Hospital Authority (HA), with the support of the Secretary for Health and Welfare, proposes to create a commitment of $1,470.8 million in money-of-the-day (MOD) prices to carry out the phase 2 redevelopment of CPH.

PROJECT SCOPE AND NATURE

3. The project will involve the demolition of the existing substandard ward blocks numbers 7 to 12 and A to J, the concert hall, service block and administration block to make way for the construction of -

1. two five-storey ward blocks (Blocks D and E);

2. a two-storey administration and allied therapeutic services block (Block F);

3. a two-storey supporting service block (Block S);

4. a single-storey building services unit (BSU); and

5. a central garden serving as a green area to facilitate the rehabilitation of psychiatric patients and a linking corridor for the major blocks in CPH.

4. With a total gross floor area of 39 350m², the five new blocks built under the phase 2 redevelopment programme will provide a wide range of services and facilities -

1. Blocks D and E will provide 748 psychiatric beds in different types of wards including acute, subacute, secure/forensic and special/intensive treatment wards. The two blocks will also house the hospital main kitchen, central pharmacy and a patient social centre;

2. Block F will provide a Day Procedure Centre for the Electro-Diagnostic Unit, an Occupational Therapy Department, a Physiotherapy Department, an X-ray Department, offices, callrooms and overnight rooms;

3. Block S will house a Central Sterile Supplies Department, a Linen Exchange Unit, stores and a mortuary; and

4. A Building Services Unit to house the chiller plants and medical gas plants.

JUSTIFICATION

5. CPH was built in 1961 with an initial planned capacity of 1 000 psychiatric beds. The bed complement was increased to 1 200 in 1967 by the addition of two ward blocks. Owing to the increasing demand for psychiatric services, the bed complement was further increased to 1 900 in 1979, but without any increase in ward space. As a result of long years of usage, the buildings and building services have become dilapidated and the latter are approaching the end of their intended service years. This has hindered the delivery of quality medical service to patients and necessitated increasing costs for repair and maintenance to keep the hospital in serviceable condition. The ward blocks and other blocks have become extremely congested and are not functionally efficient to suit modern treatment procedures.

6. A complete redevelopment is the most cost-effective solution to the above problems and will provide a much better environment conducive to the rehabilitation of psychiatric patients. In 1992, the Hong Kong Jockey Club donated $500 million to carry out the phase 1 redevelopment programme. Under the programme, construction of two new ward blocks - Blocks A and B for the reprovisioning of 752 beds was completed in January 1996. The remaining works in phase 1, i.e. building another new block (Block C) for the provision of out-patient, ambulatory care and diagnostic and treatment services, will be completed in early 1999. The two new ward blocks provide a higher ward standard and better physical environment.

7. Despite the completion of the two new ward blocks under phase 1, the problems described in para. 5 will continue to exist in the other old buildings in the absence of another phase of redevelopment. It is necessary to proceed with the phase 2 redevelopment to create a total new environment to facilitate the rehabilitation of psychiatric patients. The provision of green and pleasant surroundings congenial to the rehabilitation of psychiatric patients will help promote active participation and interaction among patients, their relatives and volunteers in the rehabilitation process. The project will be carried out in two stages. Stage 1 will cover Blocks D and F and the BSU for completion in late 2000, while Stage 2, covering Blocks E and S, is targetted for completion in early 2004.

8. With the completion of the phase 2 redevelopment project, the environment for the remaining wards will be much improved. Facilities will be upgraded and arranged in a way which will enhance operational efficiency and meet the modern concept of treating and providing rehabilitation to psychiatric patients. We will also upgrade the community psychiatric services by providing a base for ambulatory and community care, group psychotherapy, occupational therapy and rehabilitation care in the Hospital.

9. With the pending commissioning of additional psychiatric beds in other hospitals such as the Tai Po Hospital and the North District Hospital, and the emphasis on community and ambulatory care as the future direction of psychiatric services, HA plans to right-size CPH to a complement of 1 500 psychiatric beds following the completion of the redevelopment programme. HA will make suitable decanting arrangements to facilitate the construction work and to provide continuous service to patients.

FINANCIAL IMPLICATIONS

10. We estimate the capital cost of the project to be $1,470.8 million in MOD prices (see paragraph 11 below), made up as follows -

	$ million
(a) Site works and demolition	12.8
(b) Piling	114.3
(c) Building	387.8
(d) Building services	271.3
(e) Drainage and external works	53.2
(f) Furniture and equipment	42.0
(g) Consultants' fees	29.1
(h) Contingencies	90.5
Sub-total	1,001.0	(at December 1996 prices)
(i) Inflation allowance	469.8
Total	1,470.8	(in MOD prices)

The construction floor area of the project is 43 000m². The construction unit cost, excluding "Furniture and equipment" and "Consultants' fees" but including "Contingencies", is $21,626 per square metre at December 1996 prices. A breakdown by man-months of the estimate for consultants' fees is at the Enclosure.

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

Year	$ million (Dec 1996)	Price adjustment factor	$ million (MOD)
1998 - 99	45	1.16358	52.4
1999 - 2000	220	1.26830	279.0
2000 - 2001	280	1.38244	387.1
2001 - 2002	200	1.50686	301.4
2002 - 2003	130	1.64248	213.5
2003 - 2004	75	1.79030	132.5
2004 - 2005	32	1.95143	62.4
2005 - 2006	20	2.12706	42.5
	1,001		1,470.8

12. We derive the MOD estimate on the basis of the Government's forecast of trend labour and construction prices over the period from 1998 to 2006. We will tender the project under separate fixed-price lump-sum contracts for piling and building works respectively as the Director of Architectural Services (D Arch S) can define clearly the scope of the works in advance, leaving little room for uncertainty.

13. The right-sizing of CPH upon redevelopment will release recurrent resources which will be deployed to upgrade the standard of the hospital service. The operating cost of the psychiatric beds in CPH thus improved will be close to the prevailing unit cost which meets our current standards. The net additional annually recurrent expenditure of the project estimated by HA, in consultation with the Director of Electrical and Mechanical Services and D Arch S, will be $10.45 million at the December 1996 price level made up as follows -

	$ million
Arch SD services	4.00
EMSD services	6.45
Total	10.45

The net additional electricity charges arising from this project are estimated to be $15 million per annum, which will be met from existing resources.

ENVIRONMENTAL IMPLICATIONS

14. The Director of Environmental Protection completed an environmental review in April 1997 and concluded that the project would have no long term environmental impact and no environmental impact assessment would be required. We shall follow relevant statutory requirements to remove and dispose of asbestos containing materials before carrying out demolition works. We shall collect and dispose of clinical and chemical wastes generated during the operational phase in accordance with guidelines and statutory requirements.

15. For short-term construction impacts, we shall control dust, noise and site run-off to within established standards and guidelines through the implementation of appropriate mitigation measures in relevant contracts.

PUBLIC CONSULTATION

16. We consulted the Tuen Mun District Board in February 1996. Members of the Board supported the proposed redevelopment project.

LAND ACQUISITION

17. As the works will be carried out within the existing hospital boundary, no land acquisition is required.

BACKGROUND INFORMATION

18. D Arch S has completed site investigation for the project and is finalising the layout drawings using in-house staff resources. Subject to Members' approval, we plan to start work in April 1998 for completion in March 2004.

Health and Welfare Bureau
February 1998

(EE1166)

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Enclosure to PWSC(97-98)141

8037MM - Redevelopment of Castle Peak Hospital, phase 2

Details of Consultants' Fees and Trading Fund Charges

		Estimated Man- months	Average MPS* salary point	Multiplier factor	Estimated fee ($million)
(A) Breakdown of estimate for consultants fees
(I) Quantity Surveying discipline	Professional Technical	5.0 4.6	40 16	3.0 3.0	8.3 2.6
(a) Pre-contract services (tender documentation, tender assessment)	Professional Technical	24 119	40 16	3 3	4.0 6.6
(b) Post-contract services (contract administration, account finalisation)	Professional Technical	24 119	40 16	3 3	4.0 6.6
				Sub-total	21.2
(II) Structural engineering discipline	Technical	18	16	3	1.0
(B) Charges by the Electrical & Mechanical Services Trading Fund (EMSTF) (fees for advice for installation, testing, commissioning and maintenance period monitoring)					4.2
(C) Charges by the Office of the Telecommunications Authority Trading Fund (OFTATF) (fees for advisory services on planning, design and installation of telecommunication system)					2.7
		Total			29.1

*MPS = Master Pay Scale

Note

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 1.4.96, MPS pt. 40 = $55,390 p.m. and MPS pt. 16 = $18,595 p.m.).

2. The figures given above are based on estimates prepared by the Director of Architectural Services. We will only know the actual man months and actual fees when we have selected the consultant through the usual competitive bidding system.

3. Since the establishment of EMSTF on 1 August 1996 under the Trading Funds Ordinance, government departments are charged for design and technical consultancy services for electrical and mechanical installations provided by the Electrical and Mechanical Services Department (EMSD). The figures above are based on estimates prepared by the Director of Architectural Services. The actual cost for the service charges is subject to further negotiation between the Government and the EMSD.

4. Since the establishment of the OFTATF on 1 June 1995 under the Trading Funds Ordinance, government departments are charged for design and technical consultancy services for telecommunication system installations provided by the Office of the Telecommunications Authority (OFTA). The figures above are based on estimates prepared by the Director of Architectural Services. The actual cost for the service charges is subject to further negotiation between the Government and the OFTA.

(EE1166)