PWSC(97-98)144
For discussion
on 25 March 1998
ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Universities
The Chinese University of Hong Kong
22EF - Redevelopment of Chung Chi College teaching buildings, phase V
24EF - Extension to Chung Chi College new teaching buildings complex
Members are invited to recommend to Finance Committee -
- to increase the approved project estimates of 22EF from $90,460,000 by $58,040,000 to $148,500,000 and 24EF from $72,973,000 by $31,261,000 to $104,234,000 in money-of-the-day prices; and
- to endorse a proposal to split project 24EF into two stages (Stages ' and ') and to combine Stage B of 24EF with 22EF as a single development as set out in paragraph 3 below.
PROBLEM
The approved project estimate of 22EF and 24EF are insufficient for the works under the projects.
PROPOSAL
2. At the request of the Chinese University of Hong Kong (CUHK) and in consultation with the Director of Architectural Services (D Arch S) who acts as the Technical Advisor to the University Grants Committee (UGC), the Secretary-General, UGC (SG, UGC), with the support of the Secretary for Education and Manpower, proposes to increase the approved project estimates of 22EF from $90,460,000 by $58,040,000 to $148,500,000 and 24EF from $72,973,000 by $31,261,000 to $104,234,000 in money-of-the-day (MOD) prices.
3. SG, UGC, with the support of D Arch S and SEM, also proposes to endorse the split of 24EF into two stages (Stages ' and ') delivering about 1 400 and 4 100 square metres (net) respectively and the combination of Stage ' of 24EF with 22EF as a single development. This arrangement changes neither the total usable space deliverable nor the purposes of the two projects.
PROJECT SCOPE AND NATURE
4. 22EF is the phase V redevelopment of the CUHK's Chung Chi College teaching buildings. This phase of the redevelopment project, which was originally planned as a 13-storey building, will provide a net usable area of 6 000 square metres for use as lecture theatres, classrooms and offices.
5. 24EF is for the construction of an extension to Chung Chi College's New Teaching Building Complex, originally planned to provide a net usable area of 5 500 square metres to accommodate some of the University's non-science based departments and their communal teaching facilities.
6. The combination project of Stage ' of 24EF and 22EF now involves the construction of a 12-storey Main Building and a 6-storey Administration Block, part of which (two floors) is being privately funded. That part of the project funded by public funds will provide a usable area of 10 100 square metres for use as lecture theatres, classrooms and offices. Stage 'of 24EF will provide the residual 1 400 square metres for use as classrooms and student communal facilities.
JUSTIFICATION
7. The current project estimates of $72,973,000 at March 1991 prices for 24EF and $90,460,000 at June 1992 prices for 22EF were approved by the Finance Committee in March 1992 and May 1993 respectively. With the approved provision, CUHK has completed the demolition, site formation and foundation works stage of the projects.
8. To adapt to site constraints, to speed up delivery of the space approved, and to improve on the master planning of the area in terms of better spatial design and compatibility with the existing environment, CUHK has proposed to split 24EF into Stages 'and ' of about 1 400 and 4 100 square metres (net) respectively, combine Stage ' with 22EF to provide a total of 10 100 square metres (net), and proceed with the detailed design and construction works on this basis. The combination of the projects does not affect the usable space deliverable by the two projects, or change the purpose and nature of the proposed projects.
9. Notwithstanding the combination of the works of the projects, separate accounts will continue to be kept for 22EF and 24EF to maintain effective financial control. Costs will be apportioned according to the usable space deliverable except for some special features inherently identified with the individual projects. Based on the lowest tender for the superstructure construction work recommended by D Arch S for acceptance by CUHK, the approved project estimate will be insufficient to cover the works, professional fees and furniture and equipment under the projects. The additional requirements are apportioned under the two projects and the reasons for the requirements are given below -
|
Reasons for
additional
requirements
|
22EF
$ ' 000
|
%
|
24EF
$ ' 000
|
% |
|
|
(MOD)
|
|
(MOD)
|
|
|
(a)
|
Price increases in construction works and furniture and equipment since preparation of costs and up to return of contract
|
52,360
|
90.2
|
27,886
|
89.2 |
|
(b)
|
Corresponding increase in professional fees as a result of price increases in construction works
|
5,680
_____
|
9.8
____
|
3,375
_____
|
10.8
_____ |
|
Total
|
58,040
|
100.0
|
31,261
|
100.0 |
A comparison of the approved and the revised project estimates in MOD prices for 22EF and 24EF, together with explanations for the deviations, are at Enclosures 1 and 2 respectively.
FINANCIAL IMPLICATIONS
10. The revised project estimate for 22EF is $148,500,000 in MOD prices. Discounting the approved commitment of $90,460,000, we need an increase in the approved project estimate of $58,040,000. As regards 24EF, the revised project estimate is $104,234,000 in MOD prices. Discounting the approved commitment of $72,973,000, we need an increase in the approved project estimate of $31,261,000.
11. Subject to Members approval, we will phase the expenditure as follows -
|
Year
|
22EF
|
24EF |
|
$'000
(MOD)
|
|
Up to 31 March 1997
|
62,800
|
50,700 |
|
1997-98
|
1,380
|
3,420 |
|
1998-99
|
27,000
|
22,000 |
|
1999-00
|
57,320
|
28,114 |
|
Total
|
148,500
|
104,234 |
12. The proposed increases in the approved project estimates will not give rise to any additional annually recurrent expenditure.
PUBLIC CONSULTATION
13. We consider that no public consultation is necessary for an increase in the approved project estimate for the new combined project.
ENVIRONMENTAL IMPLICATIONS
14. The two projects have no long term adverse environmental impacts and the increase in the approved project estimates will not result in any additional impacts. CUHK shall control noise, dust and site run-off nuisances during construction to comply with the established criteria through the implementation of mitigation measures in the relevant works contracts.
LAND ACQUISITION
15. The proposal will not require additional land acquisition.
BACKGROUND INFORMATION
16. 22EF and 24EF are part of the redevelopment programme to replace the bulk of CUHK's aging academic facilities at the Chung Chi College Campus.
17. In January 1991, the Finance Committee approved -
- $1,800,000 for 22EF for site investigation and preliminary design work for the Phase V redevelopment of the Chung Chi College teaching buildings; and
- $800,000 for 24EF for the preliminary design of the extension to CUHK's Chung Chi College New Teaching Building Complex.
18. The Finance Committee in March 1992 further approved the revised project estimate of $72,973,000 at March 1991 prices to carry out the works of 24EF (FCR(91-92)170). In May 1993, Finance Committee further approved the revised project estimate of $90,460,000 at June 1992 prices to carry out the works of 22EF (FCR(93-94)19).
19. Work on the projects commenced in 1995 after the earlier phases of the redevelopment programme were fully commissioned and all those activities in the building blocks concerned had been removed. CUHK invited tenders for the superstructure construction work of the combined parts of the projects in October 1997 and the validity period of the lowest tender will expire by 8 April 1998.
20. The approved project estimates of 22EF and 24EF were at June 1992 and March 1991 prices respectively. They are now inadequate to cover price increases since the preparation of costs up to the return of tenders, and increases in the approved project estimates are required.
21 According to UGC Notes on Procedures, an institution may apply for funds to cover additional expenditure due to a rise in the tender price indices, in the case of projects approved prior to April 1995, where the approved project estimate is not expressed on a MOD basis. Conversely, if the tender price indices have fallen the approved cost estimate of a project will be reduced.
22. With effect from 1 April 1995, project estimates for all newly approved UGC-funded capital projects have been expressed in MOD prices. These show the estimated cost of projects after allowing for forecast inflationary increases in construction prices from the commencement to the end of the construction period. UGC-funded institutions are required to complete projects within the approved project estimates where these are expressed in MOD prices.
Education and Manpower Bureau
March 1998
Enclosure 1 to PWSC(97-98)144
22EF- Redevelopment of Chung Chi College
teaching buildings, phase V, CUHK
A comparison of the approved and revised project cost is as follows -
|
|
Approved
project cost
$ ' 000
|
|
Revised
project
cost
$ ' 000
|
|
Increase
$' 000 |
|
(a)
|
Site investigation and development works
|
3,000
|
|
4,140
|
|
1,140 |
|
(b)
|
Building works and other construction
|
44,830
|
|
80,750
|
|
35,920 |
|
(c)
|
Building services works
|
25,870
|
|
36,150
|
|
10,280 |
|
(d)
|
Professional fees
|
8,840
|
|
14,520
|
|
5,680 |
|
(e)
|
Furniture and equipment
|
7,920
|
|
12,940
|
|
5,020 |
|
Total
|
90,460
|
(at June
1992 prices)
|
148,500
|
(in MOD
prices)
|
58,040 |
2. As regards Item (a) (site investigation and development works), the increase of $1,140,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in 2nd quarter 1992 to the period when tenders for various contracts were separately received in third quarter of 1995 and fourth quarter of 1997 (TPI increased from 548 to 733 and 1,060 respectively, that is, increased by 33.76% and 93.43%).
3. As regards Item (b) (building works and other construction), the increase of $35,920,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in 2nd quarter 1992 to the period when tenders for various contracts were separately received in third quarter of 1995 and fourth quarter of 1997 (TPI increased from 548 to 733 and 1,060 respectively, that is, increased by 33.76% and 93.43%).
4. As regards Item (c) (building services works), the increase of $10,280,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in 2nd quarter 1992 to the period when tenders are expected to be received in second quarter of 1998 with anticipated inflation increase of some 39.74%.
5. As regards Item (d) (professional fees), the increase of $5,680,000 is to reflect the increase in professional fees (scale fees) as a result of the increase in the cost of construction works.
6. As regards Item (e) (furniture and equipment), the increase of $5,020,000 is due to inflation adjustment for furniture and equipment since the original budget was fixed in 2nd quarter 1992 with an anticipated increase of 63.38%.
Enclosure 2 to PWSC(97-98)144
24 EF - Extension to Chung Chi College
new teaching building complex, CUHK
A comparison of the approved and revised project cost is as follows -
|
|
Approved
project cost
$ ' 000
|
|
Revised
project cost
$ ' 000
|
|
Increase
$ ' 000 |
|
(A)
|
Stage '
|
|
|
|
|
|
|
(a)
|
Building works and other construction
|
11,028
|
|
13,549
|
|
2,521 |
|
(b)
|
Building services works
|
3,724
|
|
4,074
|
|
350 |
|
(c)
|
Professional fees
|
1,770
|
|
2,115
|
|
345 |
|
(d)
|
Furniture & Equipment
|
1,875
|
|
2,203
|
|
328 |
|
Sub-total
|
18,397
________
|
(at March 1991
prices)
|
21,941
________
|
(in
MOD prices)
|
3,544
_______ |
|
(B)
|
Stage '
|
|
|
|
|
|
|
(e)
|
Site investigation and development
|
3,326
|
|
4,577
|
|
1,251 |
|
(f)
|
Building works and other construction
|
29,668
|
|
47,040
|
|
17,372 |
|
(g)
|
Building services works
|
9,841
|
|
13,046
|
|
3,205 |
|
(h)
|
Consequential works
|
1,710
|
|
3,279
|
|
1,569 |
|
(i)
|
Professional fees
|
5,123
|
|
8,153
|
|
3,030 |
|
(j)
|
Furniture and equipment
|
4,908
|
|
6,198
|
|
1,290 |
|
Sub-total
|
54,576
|
(at March
1991
prices)
|
82,293
|
(in
MOD
prices)
|
27,717 |
|
Total for 24EF
((A) + (B))
|
72,973
|
|
104,234
|
|
31,261 |
2. As regards Item (a) (building works and other construction), the increase of $2,521,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in first quarter 1991 to the period when tender was received in fourth quarter of 1995 (TPI increased from 608 to 747, that is increased by 22.86%).
3. As regards Item (b) (building services works), the increase of $350,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in first quarter 1991 to the period when tender was received in fourth quarter of 1995 (TPI increased from 117 to 128, that is increased by 9.40%).
4. As regards Item (c) (professional fees), the increase of $345,000 is to reflect the increase in professional fees (scale fee) as a result of the increase in the cost of construction works.
5. As regards Item (d) (furniture and equipment), the increase of $328,000 is due to inflation adjustment for furniture and equipment since the original budget was fixed in first quarter 1991 with an anticipated increase of 17.49%.
6. As regards Item (e) (site investigation and development), the increase of $1,251,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in first quarter 1991 to the period when tenders for various contracts were separately received in third quarter of 1995 and fourth quarter of 1997 (TPI increased from 608 to 733 and 1,060 respectively, that is, increased by 33.76% and 93.43%).
7. As regards Item (f) (building works and other construction), the increase of $17,372,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in first quarter 1991 to the period when tenders for various contracts were separately received in third quarter of 1995 and fourth quarter of 1997 (TPI increased from 608 to 733 and 1,060 respectively, that is, increased by 33.76% and 93.43%).
8. As regards Item (g) (building services works), the increase of $3,205,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in first quarter 1991 to the period when tenders are expected to be received in second quarter of 1998 with an anticipated increase of 32.57%.
9. As regards Item (h) (consequential works), the increase of $1,569,000 is due to an upward movement in the tender price index (TPI) from the period when the original budget was fixed in (1st quarter 1991) to the period when tenders are expected to be received in first quarter of 1999 with an anticipated increase of 91.75%.
10. As regards Item (i) (professional fees), the increase of $3,030,000 is to reflect the increase in professional fees (scale fees) as a result of the increase in the cost of construction works.
11. As regards Item (j) (furniture and equipment), the increase of $1,290,000 is due to inflation adjustment for F&E since the original budget was fixed in first quarter 1991 with an anticipated increase of 26.28%.
