For discussion PWSC(97-98)54
on 4 November 1997

ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 707 - NEW TOWNS AND URBAN AREA DEVELOPMENT
New Territories North Development
Civil Engineering - Land development
455CL - Site formation for Yuen Long combined wholesale food market

Members are invited to recommend to Finance Committee -

1. the upgrading of part of 455CL, entitled "Yuen Long combined wholesale food market - site formation works" to Category A at an estimated cost of $31.9 million in money-of-the-day prices to provide land for the development of a combined wholesale food market; and
2. the retention of the remainder of 455CL, retitled "Yuen Long combined wholesale food market - road and bridge works" in Category B.

PROBLEM

We need to carry out site formation works in area 12 of Yuen Long in order to be able to provide land for the development of a combined wholesale food market.

PROPOSAL

2. The Director of Territory Development (DTD), with the support of the Secretary for Planning, Environment and Lands, proposes to upgrade part of 455CL to Category A at an estimated cost of $31.9 million in money-of-the-day (MOD) prices for carrying out site formation works in area 12 of Yuen Long for the development of a combined wholesale food market.

PROJECT SCOPE AND NATURE

3. The full scope of 455CL comprises -

1. site formation works of 3.1 hectares of land for the combined wholesale food market and access roads;
2. construction of access roads and a vehicular bridge across Yuen Long Eastern Nullah; and
3. construction of the associated drainage works.

4. The part of the project we now propose to upgrade to Category A comprises the works described in paragraphs 3(a) and 3(c) above.

JUSTIFICATION

5. For many years, vegetable farmers in Yuen Long have marketed their fresh produce in the early morning along the kerbside of Hop Yick Road, Kin Tak Street and Hop Choi Street in Yuen Long. In recent years, wholesalers of vegetables grown in Shenzhen have also made use of this ad hoc assembly market to sell their produce. More traders, transport operators and workers are attracted to the market as its throughput increased and the hours of operation extended in recent years.

6. The early morning assembly market has now become a large scale roadside vegetable wholesale market. Surveys carried out by the Director of Agriculture and Fisheries (D of A&F) in 1996 showed that the average daily throughput of the market was around 150 tonnes, representing about 11% of the vegetable consumed in Hong Kong. 69% of the throughput was marketed retail and consumed in Northwest New Territories.

7. The existence of such a wholesale market in the existing venue is incompatible with the residential and commercial use of the surrounding areas due to noise, traffic congestion and hygiene problems caused by the large scale wholesale market activities. The existence of this kerbside wholesale market has been the subject of frequent complaints from nearby residents for many years. There is also an indication that the wholesale activities will proliferate further if the issue is not properly addressed.

8. To eliminate the traffic and environmental problems arising from the kerbside wholesale market and to retain the economic value of the market activities, D of A&F proposes to build a wholesale food market in area 12 of Yuen Long to replace the existing kerbside wholesale market. The proposed market would provide efficient and up-to-standard facilities for the wholesale activities which contribute substantially to the sale of vegetable consumed in Hong Kong, especially in the Northwest New Territories region.

9. The Director of Architectural Services (D Arch S) plans to commence the building works in November 1998 for completion in December 1999. To tie in with this building programme, we need to start the site formation works in March 1998 for completion in phases from November 1998 to March 1999.

FINANCIAL IMPLICATIONS

10. We estimate the capital cost of the project to be $31.9 million in MOD prices (see paragraph 11 below), made up as follows -

			$million
(a)	Site fomation		17.0
(b)	Drainage works		5.0
(c)	Consultants' fees for		2.7
	(i) construction stage	0.3
	(ii) resident site staff costs	2.4
(d)	Contingencies		2.5
	Sub-total (at December 1996 prices)		27.2
(e)	Inflation allowance		4.7
	Total (in MOD Prices)		31.9

Due to insufficient in-house resources, DTD proposes to engage consultants to supervise the proposed works. A breakdown by man months of the estimate for the consultants?fees is at the Enclosure.

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

Year	$million (Dec 1996)	Price adjustment factor	$million (MOD)
1997-1998	1.0	1.06750	1.1
1998-1999	23.5	1.16830	27.3
1999-2000	2.2	1.26830	2.8
2000-2001	0.5	1.38244	0.7
	27.2		31.9

12. We have derived the MOD estimate on the basis of the Government's forecast of trend labour and construction prices for the period 1997 to 2001. We will tender the works under a standard remeasurement contract because the quantity of earthwork may vary according to the actual ground conditions. The contract will not provide for inflation adjustment as the contract period will not exceed 21 months.

13. We estimate the annually recurrent expenditure of the project to be $111,600.

PUBLIC CONSULTATION

14. We consulted the Environmental Improvement Committee of Yuen Long District Board on the proposed works in March 1994. The Committee supported the project and urged the Government for early implementation of the project.

ENVIRONMENTAL IMPLICATIONS

15. The Director of Environmental Protection has assessed the potential environmental implications of the proposed wholesale market and concluded that, with the implementation of suitable mitigation measures, the proposed wholesale market will not have long term environmental impact. D Arch S will review the measures to be adopted for the construction and operation of the market at the detailed design stage. For the site formation works, we will set out in the works contract the requirement of implementing mitigation measures during the works period to control dust, noise and site run-off nuisance to within the established standards and guidelines.

LAND ACQUISITION

16. We will resume 76 private agricultural lots, with a total area of about 2.5 hectares. The land resumption will necessitate removal of 11 households involving 32 people. The Director of Housing will offer to rehouse these families to pubic housing in accordance with the existing policy. We will charge the cost of land acquisition and clearance, estimated at $170 million, to Head 701-Land Acquisition.

BACKGROUND INFORMATION

17. We upgraded 455CL to Category B in January 1996.

18. We subsequently engaged consultants to undertake investigation and design for the proposed site formation, road and bridge works, and charged the cost of $3.0 million to the block allocation Subhead 7100CX "New towns and urban area works, studies and investigations for items in Category D of the Public Works Programme" The consultants have completed the detailed design and drawings for the site formation works.

19. We plan to start the site formation works in March 1998 for completion in phases from November 1998 to March 1999. We will hand over the formed site for the wholesale food market to D Arch S in phases from November 1998 to March 1999 for construction of the market under 46FS which was upgraded to Category B in June 1996.

20. We plan to implement the remaining road and bridge works in December 1998 for completion in December 1999.

Planning, Environment and Lands Bureau
October 1997

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Enclosure to PWSC(97-98)54

455CL -Yuen Long combined wholesale food market - site formation works

Breakdown of estimate for consultants?fees

	Consultants' Staff costs		Estimated man months	Average MPS salary point	Multiplier factor	Estimated fee ($million)
(a)	Consultants' fees for construction stage
	(i)contract administration	Professional Technical	1.2 0.9	40 16	3.0 3.0	0.20 0.05
	(ii)preparation of as-built drawings	Professional Technical	0.1 0.5	40 16	3.0 3.0	0.02 0.02
(b)	Resident site Staff costs	Professional Technical	8.5 36.0	40 16	2.1 2.1	0.99 1.41
Total consultant's staff costs						2.70

Notes

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. A multiplier factor of 2.1 is applied to the average MPS point in the case of site staff supplied by the consultants. (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 Territory Development. The consultancy works for this project will be included as part of the overall consultancy agreement for the development in Yuen Long District.