PWSC(97-98)66
For discussion
on 12 November 1997

ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 711 - HOUSING
Water Supplies - Fresh water supplies
B270WF - Yuen Long water supply - Tan Kwai Tsuen north fresh water service reservoir

Members are invited to recommend to Finance Committee the upgrading of B270WF to Category A at an estimated cost of $ 854.8 million in money-of-the-day prices for the construction of the Tan Kwai Tsuen north fresh water service reservoir and its associated watermains.

PROBLEM

The capacity of the existing fresh and flushing water supply system serving Tin Shui Wai will be insufficient to meet the demands for fresh and flushing water arising from the developments in the area by the year 2000.

PROPOSAL

2.The Director of Water Supplies (DWS), with the support of the Secretary for Housing (S for H), proposes to upgrade B270WF to Category A at an estimated cost of $ 854.8 million in money-of-the-day (MOD) prices for the construction of the Tan Kwai Tsuen north fresh water service reservoir, associated fresh water mains and mains for the supply of flushing water.

PROJECT SCOPE AND NATURE

3.The scope of the project comprises -

1. constructing the Tan Kwai Tsuen north fresh water service reservoir with a storage capacity of 80 000 cubic metres;

2. laying approximately 4.2 kilometres of 1 400 mm diameter trunk main from Yuen Long Town to the proposed Tan Kwai Tsuen north fresh water service reservoir;

3. laying approximately 4.4 kilometres of 1 800 mm diameter primary distribution main from the proposed Tan Kwai Tsuen north fresh water service reservoir to Tin Shui Wai;

4. laying approximately 2.4 kilometres of fresh water distribution mains of diameter ranging from 600 to 1600 millimetres in Tin Shui Wai; and

5. laying approximately 2.0 kilometres of flushing water distribution mains of diameter ranging from 150 to 600 millimetres in Tin Shui Wai.

JUSTIFICATION

4.Tin Shui Wai is at present served by the Wang Chau fresh water service reservoir which can provide a daily supply of 78 000 cubic metres. The Administration decided in 1994 to develop areas 3, 30 and 31 of the Tin Shui Wai Development Zone and about 53 hectares of the Tin Shui Wai Reserve Zone for further housing developments to accommodate an additional population of about 170 000 in 2004. Given the large scale of housing developments in these areas, we expect the daily demand of fresh and flushing water will increase from the current 65 000 cubic metres per day to 115 000 cubic metres per day by 2000. There will be a shortfall of 37 000 cubic metres per day by 2000.

5.To cope with the increase in demand and to assure water supply to new developments we need to upgrade the existing water supply system by constructing the Tan Kwai Tsuen north fresh water service reservoir with a storage capacity of 80 000 cubic metres and its associated watermains. The housing developments in Tin Shui Wai will be adversely affected if the demand for fresh water is not met.

FINANCIAL IMPLICATIONS

6.We estimate the capital cost of the project to be $854.8 million in MOD prices, made up as follows -

A breakdown by man months of the estimate for consultants' fees is at the Enclosure.

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

Year	$ million (Dec 1996)	Price adjustment factor	$ million (MOD)
1998 - 99	119.0	1.16358	138.5
1999 - 2000	198.1	1.26830	251.3
2000 - 01	108.5	1.38244	150.0
2001 - 02	114.7	1.50686	172.8
2002 - 03	86.6	1.64248	142.2
	626.9		854.8

8.We have derived the MOD estimates on the basis of the Government's forecast of trend for labour and construction prices for the period 1998 to 2003. We will tender the construction works for the proposed service reservoir on a lump-sum basis. We will tender the mainlaying works under a remeasurement contract as it is not possible to estimate accurately the quantities of excavation, special bends, reinstatement and many other items with the degree of accuracy necessary for a lump sum form of contract due to the uncertainties of ground conditions and existing services. We will provide for adjustment due to inflation in the contracts for the construction of the service reservoir and mainlaying works because the construction periods will be longer than 21 months.

9.We estimate the additional annually recurrent expenditure to be $1.91 million. This project by itself will lead to an increase in water charges by 0.4 % in real terms¹ .

PUBLIC CONSULTATION

10.We consulted the Environmental and Improvement Committee and the Traffic and Transport Committee of the Yuen Long Provisional District Board on 24 July 1997 and 31 July 1997 respectively. The two Committees supported the project.

ENVIRONMENTAL IMPLICATIONS

11.The Director of Environmental Protection completed an environmental review in March 1995 and concluded that the project would have no long term adverse environmental impact and no Environmental Impact Assessment would be necessary. During construction, we will comply with established standards and guidelines on the control of noise, dust and site run-off nuisances by incorporating standard environmental pollution control clauses in the works contracts. We will also control the waste water discharges generated during the operational phase of the service reservoir by discharging to the public sewerage system.

LAND ACQUISITION

12.The project does not require land acquisition. The Director of Lands will clear 6 hectares of Government land for the construction of Tan Kwai Tsuen north fresh water service reservoir. The clearance will not affect any households. We will charge the cost of clearance at an estimated cost of $0.5 million to Head 701 - Land Acquisition.

BACKGROUND INFORMATION

13.We upgraded B270WF to Category B in September 1995.

14.We engaged consultants to carry out the detailed design and site investigation for the works and charged the cost of $9.4 million to block allocation Subhead B100HX " Minor housing development related works, studies and investigations for items in Category D of the Public Works Programme " . The consultants have substantially completed the detailed design.

15.At present, the contractors generally need several months to acquire the necessary materials from suppliers before they can physically start the mainlaying works on site. In view of the requirement for completion of the watermains to tie in with the housing developments as well as the interface with other projects in Tin Shui Wai, S for H has approved the inclusion of an item under block allocation Subhead B100HX " Minor housing development related works, studies and investigations for items in Category D of the Public Works Programme " at an estimated cost of $4.9 million for the purchase of about 5% of the pipe materials for B270WF in advance of the works contracts. In doing so, the selected contractors will have some necessary pipe materials to start mainlaying works immediately upon commencement of the contracts.

16.A related paper, PWSC(97-98)65, for the part upgrading of 34WF " Additional trunk transfer facilities between Yuen Long and Tuen Mun " under Head 709, to Category A is submitted for Members' approval at this meeting. Part of the watermain from Yuen Long to Tan Kwai Tsuen to be constructed under 34WF in the footway adjacent to Shan Ha Road, Long Tin Road and Yuen Long Highway will follow the same route of part of the watermain to be constructed under B270WF. To avoid inconvenience caused to the public and to reduce costs, we propose to construct these watermains under one contract. We plan to start B270WF including the section under 34WF, in April 1998 for completion in October 2000.

Housing Bureau
November 1997

1.The increase in water charges is calculated on the assumption that the demand remains static during the period from 1997 to 2003 and that the amount of Government subsidy to the waterworks operations is contained at its present level.

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Enclosure to PWSC(97-98)66

B270WF - Yuen Long water supply - Tan Kwai Tsuen north fresh water service reservoir

DETAILS OF CONSULTANTs' FEES

Breakdown of estimates for consultants' fees

Notes

1.The consultants' fees for works during the construction stage is a provisional part of the sum price quoted by consultancy Agreement No. 56/96 " Yuen Long water supply - Tan Kwai Tsuen north fresh water service reservoir " which is available for acceptance by Government subject to approval for upgrading B270WF to Category A.

2.A multiplier factor of 3 is applied to the average Master Pay Scale (MPS) point to arrive at the full staff costs including the consultants' overheads and profit, as the staff will be employed by the consultants' office. (At 1.4.96, MPS 40 = $55,390 p.m. and MPS 16 = $18,595 p.m.). A multiplier factor of 2.1 is applied in the case of site staff supplied by the consultant.

3.The figures for the resident site staff given above are based on estimates prepared by the Director of Water Supplies. We will only know the actual man months and actual fee when we have appointed the resident site staff.