PWSC(97-98)90
For discussion
on 10 December 1997
ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE
HEAD 705 - CIVIL ENGINEERING
Support - Others
117GK - Explosives Complex at Kau Shat Wan, building, mechanical and electrical works
Members are invited to recommend to Finance Committee an increase in the approved project estimate of 117GK from $249.7 million by $39.8 million to $289.5 million in money-of-the-day prices.
PROBLEM
The approved project estimate of 117GK is insufficient for the additional works under the project.
PROPOSAL
2.The Director of Civil Engineering, in his capacity as the Commissioner of Mines, with the support of the Secretary for Works, proposes to increase the approved project estimate of 117GK from $249.7 million by $39.8 million to $289.5 million in money-of-the-day (MOD) prices.
PROJECT SCOPE AND NATURE
3.The scope of the project comprises -
- the construction of eight above ground explosives storage magazines and auxiliary structures;
- the construction of 1.9 kilometres of internal roads, associated drains and landscaping works;
- provision of utilities, and installation of general mechanical and electrical services;
- provision of fire services installations, including a fire engine;
- provision of a security system;
- provision of furniture and equipment necessary for the operation of the complex; and
- installation of navigational aids in the navigational channel and marine exclusion zone fronting the site.
4.The site plan of the project is at Enclosure 1.
JUSTIFICATION
5.The former Government explosives depot on Stonecutters Island needed to be relocated to a new complex at Kau Shat Wan on Lantau by June 1997. The reprovisioning involved two contracts, namely a civil works contract under 140GK, and a building and mechanical and electrical (M&E) works contract under 117GK. We overlapped the two contracts to fast-track the construction works.
6.The new complex at Kau Shat Wan became operational in June 1997 as scheduled. However, to effect necessary additional works and to settle the final account, we require an increase in the approved project estimate of 117GK. The main reasons for the proposed increase are set out below -
- during the construction stage, the Hong Kong Police Force requested additional storage for ball ammunition, smoke grenades and pyrotechnics. According to safety regulations, we cannot store these items underground and so we need additional above ground storage capacity;
- following a design review during the construction stage, we found it necessary to alter the lighting system inside the tunnel. In order to reduce the risk of tunnel black-outs from main power failure, we need an uninterruptable power supply instead of using the original battery system. The proposed revised lighting system is in line with the United Kingdom's Ministry of Defence, Explosives Storage and Transportation Committee Standards. We need to alter the electrical layout accordingly;
- to ensure safe evacuation of personnel from the tunnel in case of a fire, the Fire Services Department has recommended the upgrading of the original mechanical ventilation system to a smoke extraction system. This involves the application of a fire-resistant coating to the existing electricity cables;
- we need to take additional drainage measures to overcome blockages to the tunnel drainage system caused by unforeseen seepage of mineral deposits inside the tunnel;
- during the construction stage, we found that the main underground electricity cables for the complex were vulnerable to damage from the settlement of the reclamation which turned out to be greater than expected. Originally we intended to lay the cables in trenches backfilled with sand. However, after a review, we found it necessary to locate such cables in a concrete trough to ensure safety and to facilitate future maintenance;
- under the civil works contract (140GK), we formed the reclamation for the complex using rock material from the tunnel excavation. The material was used instead of the original plan of importing soft material which would have been more costly. At the time of the award of the building and M&E works contract (117GK) under the fast-track approach, this decision was not known. Since the contractor has tendered on the basis of soft fill reclamation, we need to pay that contractor for increased cost of excavation for the structures, roads, drains and related services on the rock fill reclamation. Overall, there is a net saving over the two project items 140GK and 117GK; and
- during the planning stage, we did not identify the demolition ground area. It was only after a site investigation upon the tendering of the building and M&E works contract that we found it necessary to remove additional unsuitable materials to ensure slope safety; and
- we designed the soakaway system for the foul drainage based on an assumed permeability of the reclamation. Upon checking after completion of the reclamation, we discovered that the actual permeability was lower than that we had expected. We consider it necessary to enlarge the soakaway system.
7.A detailed comparison of the cost breakdowns of the approved and revised project estimates is at
Enclosure 2. The following table provides a summary of the reasons for the increase of $39.8 million :
| | | $ million
(MOD) | %
|
|---|
| (a) | Specification changes | | 30.3
| 76.1
|
| (i)changes in user's requirements such as the construction of additional above ground magazines and ancillary structures, and enhancement of navigation aids
(para. 6(a) refers)
| 7.4
|
| (ii)changes in standard such as the revised lighting system inside the tunnel, the upgrading of fire services facilities, additional drainage measures and the locating of underground electricity cables in troughs
(paras. 6(b) to (e) refer)
| 22.9
|
| (b) | Quantity/volume variations (i.e. additional works based on actual measurement on site) such as the removal of additional unsuitable materials from the demolition ground area and the enlarged soakaway systems(paras. 6(g) & (h) refer)
| | 10.5
| 26.4
|
| (c) | Price variation due to excavation through rock material in reclamation (para. 6(f) refers) | | 10.9
| 27.4
|
| (d) | Others
| | (11.9)
| (29.9)
|
| (i)contingencies | (13.0)
|
| (ii)site staff cost | 1.1
|
| Total (in MOD prices) | 39.8
| 100.0
|
FINANCIAL IMPLICATIONS
8.The actual expenditure up to March 1997 was $162.0 million. Subject to approval, we will phase expenditure as follows -
| Year | $ million
(Dec 1996) | Price
adjustment
factor | $ million
(MOD)
|
|---|
| 1995 - 96 | 0.1 | - | 0.1
|
| 1996 - 97 | 161.9 | - | 161.9
|
| 1997 - 98 | 100.0 | 1.06750 | 106.8
|
| 1998 - 99 | 17.8 | 1.16358 | 20.7
|
| 279.8 | | 289.5
|
We derive the MOD estimate on the basis of the Government's forecasts of trend labour and construction prices over the period between 1997 and 1999.
9.The proposed increase in the approved project estimate will not give rise to additional annually recurrent expenditure.
PUBLIC CONSULTATION
10.As there is no change in the project scope, we consider that we do not require further public consultation.
ENVIRONMENTAL IMPLICATIONS
11.The construction of the additional drainage measures will not cause environmental impact. We will monitor the operational performance of the additional measures to ensure there will be no adverse long-term environmental impact.
LAND ACQUISITION
12.The project does not require land acquisition.
BACKGROUND INFORMATION
13.We funded the feasibility study, environmental impact and hazard assessments and the preliminary archaeological rescue investigation under 392CL " Feasibility study for a new explosives complex at Kau Shat Wan " at a cost of $4.5 million in March 1993.
14.On 18 June 1993, the Finance Committee (FC) approved the upgrading of part of 117GK to Category A as 119GK for detailed site investigation and design at an estimated cost of $14 million at March 1993 prices. The FC further approved the upgrading of part of 117GK to Category A on 11 November 1994 as 140GK for the civil works at an estimated cost of $245 million at July 1994 prices, and approved the upgrading of the remaining part of 117GK to Category A on 14 July 1995 at an estimated cost of $249.7 million in MOD prices.
15.The civil works commenced in December 1994 and was substantially completed in August 1996. The building and M&E works commenced in February 1996 and was substantially completed in June 1997. We plan to complete the project by July 1998.
Works Bureau
November 1997
(HH596)
Enclosure 2 to PWSC(97-98)90
COMPARISON OF THE APPROVED AND REVISED PROJECT ESTIMATES
| Approved
Estimate
(Dec 94)
$ million
| Approved
Estimate
(Dec 96)1
$ million
| Revised
Estimate
(Dec 96)
$ million
|
|---|
| (a)above ground magazines and structures
| 39.0
| 45.9
| 54.4
|
| (b)internal roads, drains and landscaping works
| 26.0
| 30.6
| 38.0
|
| (c)utilities and general mechanical and electrical services
| 49.0
| 57.7
| 66.9
|
| (d)fire services installations and fire engine
| 18.0
| 21.2
| 26.1
|
| (e)security system, incl. fencing
| 34.0
| 40.0
| 41.1
|
| (f)furniture and equipment
| 7.0
| 8.2
| 8.2
|
| (g)environmental monitoring and audit
| 1.0
| 1.2
| 1.2
|
| (h)navigation aids
| 2.0
| 2.4
| 2.8
|
| (i)consultants' fees for the construction stage
| 2.0
| 2.4
| 2.4
|
| (j)resident site staff costs
| 12.0
| 14.1
| 15.1
|
| (k)additional drainage measures for tunnel
| -
| -
| 8.0
|
| (l)additional cost for excavation in reclamation formed by rocks excavated from tunnels
| -
| -
| 10.6
|
| (m)contingencies
| 15.0
| 17.6
| 5.0
|
| Total
| 205.0
| 241.3
| 279.8
|
2.As regards (a), of the total increase of $8.5 million -
- $5.8 million is for the provision of additional storage capacity of above-ground magazines to meet the revised requirements for storage of ammunition and pyrotechnics;
- $1.0 million is for the provision of additional facilities in the tunnel for future inspection and maintenance access; and
- $1.7 million is for the provision of additional miscellaneous building items.
3.As regards (b), of the total increase of $7.4 million -
- $4.1 million is for the removal of unsuitable materials and additional slope protection for the demolition ground area;
- $2.4 million is due to the enlargement of the soakaway system for sewerage disposal. The very low permeability of the ground was not anticipated; and
- $0.9 million is for the provision of miscellaneous items.
4.As regards (c), of the total increase of $9.2 million -
- $6.3 million is for the provision of ducts and troughs for laying of underground services and utilities; and
- $2.9 million is for the improvement of the electrical layout.
5.As regards (d), of the total increase of $4.9 million -
- $1.2 million is for the provision of a salt water backup system for fire fighting; and
- $3.7 million is for modifications to the power cables for the smoke extraction system, and miscellaneous fire services installations.
6.As regards (e), the increase of $1.1 million is for the provision of additional security fencing along the demolition ground and miscellaneous security items.
7.As regards (h), the increase of $0.4 million is for additional navigational buoys and accessories.
8.As regards (j), the increase of $1.0 million is for remunerating resident site staff for supervising the additional works.
9.As regards (k), the inclusion of $8.0 million is for the modification of the drainage system to divert and collect mineral deposits seeping out from the tunnel.
10.As regards (l), the inclusion of $10.6 million is for the additional cost associated with the rock materials excavation in the reclamation for structures, roads, drains and services.
11.As regards (m), the $5.0 million is an allowance for valuation of contract variations to be settled in the final account.
(HH596)
1. We convert the approved project estimate (Dec 94) to approved project estimate (Dec 96) by using the 9% trend labour and construction index for the year 1995 and the 8% trend labour and construction index for the year 1996.
