PWSC(97-98)107
For discussion
on 21 January 1998
ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Medical Subventions
12MD - Kwong Wah Hospital - Low block extension
Members are invited to recommend to Finance Committee the approval of a revised scope of the project to expand the facilities within the Out-Patient Block and to redesignate the use of part of the Main Block of Kwong Wah Hospital.
PROBLEM
The approved scope of the project is inadequate to meet the latest requirements for service developments of the Kwong Wah Hospital (KWH).
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 as follows -
- by adding two additional floors to the originally proposed five-storey Out-Patient Block to accommodate additional facilities; and
- by redesignating the use of the second floor of the New Wing of the Main Block for the expansion of the pathology department instead of the originally proposed use for the expansion of the occupational therapy (OT) and prosthetic-orthotic (PO) units.
PROJECT SCOPE AND NATURE
3. In July 1996, under FCR(96-97)54, Finance Committee (FC) members approved the construction of a new five-storey Out-Patient Block under this project to reprovision and expand the out-patient department and to renovate the second floor of the New Wing for the expansion of the OT & PO units at KWH. At that time, the Out-Patient Block was intended to accommodate the following facilities -
G/F to 3/F of the new Out-Patient Block
- 36 consultation rooms;
- two assessment rooms for paediatric patients;
- clinic administration offices;
- an out-patient dispensary;
- medical record offices;
- four patients instruction rooms;
- an eye laser room and a fine needle aspiration room;
4/F of the new Out-Patient Block
- a physiotherapy out-patient department; and
- two minor operating theatres.
4. For the construction of the ground to third floors of the new Out-Patient Block and the renovation of the second floor of the New Wing, the FC have approved a commitment of $51.16 million in money-of-the-day (MOD) prices for the project which accounted for 50% of the cost for this part of the project. The Tung Wah Group of Hospitals (TWGHs) has undertaken to contribute the other 50% of the cost and the full cost of constructing the fourth floor of the Out-Patient Block. The total contribution by the TWGHs was $62.84 million in MOD prices.
5. We now propose to revise the approved scope of the project by constructing two additional floors on top of the new Out-Patient Block and by altering the use of the second floor of the New Wing for the expansion of the pathology department instead of the originally proposed use for the expansion of the OT & PO units. For the new Out-Patient Block, the facilities to be provided in the ground to third floors will remain unchanged. The following new facilities will be provided in the fourth floor and the two additional floors -
- a well women clinic (4/F);
- an obstetrics and gynaecology (O&G) clinic (4/F);
- a fully set up ambulatory surgery centre instead of the original two minor operating theatres under item (i) of paragraph (3) above (5/F);
- a work base for the community rehabilitation team (6/F); and
- an allied health rehabilitation centre by incorporating the physiotherapy out-patient department under item (h) of paragraph (3) above (6/F).
A comparison of the original and revised project scope is at Enclosure 1.
JUSTIFICATION
6. Since July 1996 when the FC approved this project, HA and KWH have completed the site investigation, demolition and piling works for the project.
7. During this period, HA and KWH have identified a number of development initiatives for the continuous quality improvements of the services being provided. Amongst these are the setting up of an ambulatory surgery centre, a community rehabilitation team and an allied health rehabilitation centre (items (c) to (e) of paragraph 5 above). The provision of surgery on a day basis is recognised as one of the most important measures to improve operational efficiency in modern day hospitals. The proposed ambulatory surgery centre is an extension of the originally proposed two minor operating theatres with a view to providing more comprehensive day surgery and supporting services. The community rehabilitation team aims to provide specialist support to elderly persons and their carers in the community. This has shown to be very effective in reducing the elderly persons need for hospitalisation. The allied health rehabilitation centre, which integrates medical social service, podiatry, speech therapy units, and the originally proposed physiotherapy out-patient department, will streamline the various related operations and provide the setting for an integrated approach to the delivery of rehabilitation service to patients.
8. Since these developmental needs will require additional space, HA and KWH plan to construct two more storeys to the new Out-Patient Block. In designing better use of the new block, HA and KWH take the opportunity to further rationalise the functional relationships and space utilisation of some of the existing or planned departments. The O&G clinic and the well women clinic will be relocated to the Out-Patient Block to streamline operation. HA also proposes to renovate the second floor of the New Wing, which was originally planned for the expansion of the OT & PO units in the original project scope, for the expansion of the pathology department instead. The latter is currently occupying several floors of the same building and in need of additional space for expansion due to a major increase in patient load. The originally planned expansion of the OT & PO units has already been accommodated in the East Wing of the Main Block.
FINANCIAL IMPLICATIONS
9. Under the original approved scope of the project, FC members approved a commitment of $51.16 million in MOD prices. The rest of the project cost, i.e. $62.84 million would be met by contribution from the TWGHs. The proposed revised scope of the project will not incur additional financial commitment to the Government. As undertaken before with regard to the
approved project scope, TWGHs will contribute 50% of the total project cost for the construction and fitting out of the ground to third floors of the new Out-Patient Block and the renovation of the second floor of the New Wing and bear the full cost for constructing and fitting out of the fourth floor of the Out-Patient Block. It will also bear the full cost of constructing and fitting out the two extra floors of the new Out-Patient Block to provide the additional facilities required.
10. A comparison of the approved and revised project estimates 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)
|
Building
|
45.76
|
49.42
|
69.36 |
|
|
|
|
|
|
(b)
|
Building services
|
28.86
|
31.17
|
30.72 |
|
|
|
|
|
|
(c)
|
External works
|
1.65
|
1.78
|
2.64 |
|
|
|
|
|
|
(d)
|
Professional fees
|
8.58
|
9.27
|
12.59 |
|
|
|
|
|
|
(e)
|
Furniture and equipment
|
2.93
|
3.16
|
6.62 |
|
|
|
|
|
|
(f)
|
Demolition
|
0.88
|
1.07
|
1.56 |
|
|
|
|
|
|
(g)
|
Contingencies
|
3.78
|
4.08
|
8.95 |
|
|
|
|
|
|
Total project cost
|
92.44
|
99.95
|
132.44 |
|
|
|
|
|
|
(h)
|
Inflation adjustment
|
21.56
|
14.05
|
26.49 |
|
|
|
|
|
|
Project estimate in MOD prices
|
114.00
|
114.00
|
158.93 |
|
|
|
|
|
|
(i)
|
less Contribution from TWGHs (in MOD prices)
|
(62.84)
|
(62.84)
|
(107.77) |
|
Project cost to be met by government subvention in MOD prices
|
51.16
|
51.16
|
51.16 |
11. For item (f) "Demolition" of paragraph 10, the increased estimate at December 1996 prices of $1.56 million is due to Building Department's implementation of additional requirements on the procedure and safety measures on demolition work in 1996. The increase in the revised estimate for all of the remaining items are due to the proposed revision in the scope of works. A breakdown of the estimates for consultancy fees for the revised project is at Enclosure 2.
12. A revised estimate of the cashflow for the project is as follows -
|
Year
|
Original cashflow
$ million (MOD)
|
|
Revised cashflow
$ million (MOD)
|
|
|
|
|
|
HKG
|
TWGHs
|
|
Total
|
|
HKG
|
TWGHs
|
Total
|
|
|
|
|
|
1996-97
|
0
|
10.80
|
10.80
|
|
0
|
1.93
|
1.93
|
|
|
|
|
|
1997-98
|
0
|
45.82
|
45.82
|
|
0
|
10.65
|
10.65
|
|
|
|
|
|
1998-99
|
44.55
|
6.22
|
50.77
|
|
44.55
|
67.19
|
111.74
|
|
|
|
|
|
1999-00
|
6.61
|
0
|
6.61
|
|
6.61
|
28.00
|
34.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51.16
|
62.84
|
114.00
|
|
51.16
|
107.77
|
158.93
|
13. The proposed financial commitments of the Government and the TWGHs are therefore as follows -
|
HKG
|
TWGHs
|
Total |
|
|
|
|
|
|
$ million
(MOD)
|
|
|
|
|
|
|
New Out-Patient Block (ground floor to third floor) plus renovation of second floor of New Wing
|
51.16
|
45.25
|
96.41 |
|
|
|
|
|
New Out-Patient Block (fourth floor to sixth floor)
|
----
|
62.52
|
62.52 |
|
__________
|
__________
|
__________ |
|
51.16
|
107.77
|
158.93 |
|
__________
|
__________
|
__________ |
|
|
|
|
14. We derive the revised MOD estimate on the basis of the value of works completed to date and the tenders returned for the superstructure works. In order to achieve early completion of the project, HA has tendered the superstructure works under a fixed-price lump-sum contract, in parallel with the seeking of approval for the revised scope of the project. Acceptance of the tender will be subject to members approval of the proposed revisions to the project scope. HA plans to start the superstructure works in March 1998 for completion in April 1999.
15. HA will absorb the additional annually recurrent expenditure of about $740,000 arising from the expanded service.
PUBLIC CONSULTATION
16. Since the proposed additional facilities will be located in the originally proposed new Out-Patient Block and will enhance the services provided by KWH, we consider that public consultation is not necessary.
ENVIRONMENTAL IMPLICATIONS
17. In January 1998, the Director of Environmental Protection completed a further Environmental Review (ER) for the revised project scope and concluded that the environmental implications arising from the expanded project will be similar to those of the original project. An environmental impact assessment would not be required. HA will implement arrangements for the management, storage, transport and disposal of chemical and clinical wastes as recommended in the ER. 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 the relevant contracts.
LAND ACQUISITION
18. This proposed revision of project scope and redesignation of use do not require any land acquisition.
BACKGROUND INFORMATION
19. In July 1993, FC members approved the construction of an extension block next to the Main Block of KWH to accommodate new and additional facilities. In July 1996, FC members approved the proposal to revise the scope of the original project by constructing a new block at an alternative site in KWH for the reprovisioning and expansion of the out-patient department.
Health and Welfare Bureau
January 1998
