PWSC(97-98)49
For discussion
on 15 October 1997

ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 703 - BUILDINGS
Quarters - Others
18JO--Purchase of departmental quarters for married staff of the Independent Commission Against Corruption

Members are invited to recommend to Finance Committee to upgrade 18JOto Category A at an estimated cost of $237.5 million in money-of-the-day prices for the purchase of departmental quarters for married staff of the Independent Commission Against Corruption.

PROBLEM

There is a substantial shortfall in the provision of departmental quarters for married staff of the Independent Commission Against Corruption (ICAC).

PROPOSAL

2.The Commissioner of the ICAC proposes to upgrade 18JO to Category A at an estimated cost of $237.5 million in money-of-the-day (MOD)⁽¹⁾ prices for the purchase of departmental quarters for married staff of the ICAC.

PROJECT SCOPE AND NATURE

3.The scope of the project comprises the purchase of departmental quarters (about 53 units in total) of different grades at an estimated cost of $237.5 million. Subject to market conditions and in consultation with the Commissioner of the ICAC, the Government Property Administrator (GPA) will determine the exact locations and number of quarters at the acquisition stage.

JUSTIFICATION

4.It is government policy to provide, subject to availability of resources, departmental quarters for married local disciplined services staff⁽²⁾ in order to sustain their morale and to facilitate retention in the service. This policy applies to the ICAC.

5.Since 1994, we have provided the ICAC with 185 units⁽³⁾of departmental quarters. They are allocated to ICAC staff under the categories of Married Officer and Married Junior Personnel ⁽⁴⁾. Notwithstanding these provisions, the ICAC still has a substantial shortfall (39.5%) in the provision of departmental quarters. The actual shortfall as at 28 July 1997 was 121 units. Details are as follows -

This figure has not taken into account the anticipated return of 32 units at Tudor Court, Broadcast Drive in October 1998 when the site where these units are located will be put up for sale in the 1998/99 land disposal programme.

6.Subject to availability of suitable sites, Government's preference has always been to satisfy its quarters needs by construction, as this option is usually cheaper than purchasing. It has not been possible to do so in the case of ICAC quarters for the reasons set out below.

7.From an operational viewpoint, it has been agreed that the needs of ICAC staff would be considered with those of other Disciplined Services in new quarters construction projects where appropriate rather than on a stand alone basis. The Administration is now actively planning to construct more joint departmental quarters projects to accommodate the needs of all the Disciplined Services, including the ICAC. As departmental quarters currently under construction have all been committed to meet identified needs for other disciplined services, it would not be possible to transfer any of these units to the ICAC.

8.GPA has tried to meet some of the ICAC's needs from the existing stock of government owned quarters. 50 owned quarters have been allocated to the ICAC in this manner. There are no more suitable quarters available for reallocation. Given this situation, we will not be able to meet ICAC's requirements from the new building programme for several years. In this event, it is necessary to meet the acute shortfall in the supply of ICAC quarters in the near term through purchase on the open market.

9.The ratio of the shortfall for quarters for married officers to that for married junior personnel is around 1 to 2.36. We propose to purchase 18 units for married officers and 35 units for married junior personnel. The provision of these additional units would reduce the ICAC's shortfall for departmental quarters to 22.2% (68 units). However, the loss of 32 units at Tudor Court in October 1998 will increase the ICAC's shortfall to 32.7% (100 units). The ICAC will continue to seek provision to meet the remaining shortfall through allocation from future quarters projects or purchases on the open market where appropriate.

FINANCIAL IMPLICATIONS

10.The total estimated cost of purchasing the quarters is $237.5 million in MOD prices, made up as follows -

11.We estimate the additional annually recurrent expenditure on management charges to be $1.05 million.

PUBLIC CONSULTATION

12.As the project is to purchase property and is not works related, we consider public consultation unnecessary.

ENVIRONMENTAL IMPLICATIONS

13.The project will not have any environmental impact.

LAND ACQUISITION

14.The project does not require land acquisition.

BACKGROUND INFORMATION

15.We upgraded 18JO to Category B in September 1996.

Independent Commission Against Corruption
October 1997

(HH540)

(1)Unlike other public works projects, we state the cost of the project in MOD prices only. We do not state the cost in constant prices because the use of inflation indices based on changes in costs of labour and materials are not directly applicable in the case of purchasing property. Government Property Administrator intends to buy the required property units over a period of time during the 1997-98 financial year and confirms that $237.5 million will be adequate for this purpose.

(2) The term "married local disciplined services staff" refer to rank and file and the ranks of Inspector, Senior Inspector, Chief Inspector and Superintendent of the Police, and comparable ranks in other disciplined services.

(3)The figure is made up of 50 units (27%) allocated by GPA and 135 units (73%) purchased under previous public works projects.

(4)Married Officer refers to departmental grade staff on the ICAC Salary Scale points 11 to 30 (equivalent to Police Inspector Grade). Married Junior Personnel refers to departmental grade staff on the ICAC Salary Scale points 1 to 10 (equivalent to Police rank and file).