PWSC(97-98)76
For discussion
on 26 November 1997

ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 703 - BUILDINGS
Support - Others
29GK -Regional depot for the Water Supplies Department in Mainland South East

Members are invited to recommend to Finance Committee the upgrading of 29GK to Category A at an estimated cost of $305.7 million in money-of-the-day prices for the construction of a regional depot for the Water Supplies Department in Mainland South East.

PROBLEM

To facilitate the construction of the new Yuen Leng Fresh Water Service Reservoir (YLFWSR) on the site of the existing temporary depot for the Mainland South East (MSE) Region of the Water Supplies Department (WSD) in Diamond Hill, it is necessary to reprovision the depot by early 2000. In addition, we have to relocate the Construction Division of WSD which will have to vacate its present location at the San Po Kong Government Offices Building by early 2000.

PROPOSAL

2.The Director of Architectural Services, with the support of the Secretary for Works, proposes to upgrade 29GK to Category A at an estimated cost of $305.7 million in money-of-the-day (MOD) prices for the construction of a permanent depot for the MSE Region of WSD in Wai Yip Street in Kwun Tong. The building will also accommodate the Construction Division of WSD.

PROJECT SCOPE AND NATURE

3.The aim of the project is to provide a permanent and stand-alone regional depot for the MSE Region of WSD and to reprovision the Construction Division of the department. The scope of the project comprises the construction of a 12-storey building on a site of 2 834 square metres. The building includes offices, storage areas, duty barracks areas, canteen, 128 carparks and other ancillary facilities.

JUSTIFICATION

4.The MSE Regional Office of WSD is responsible for the operation and maintenance of water supply systems and the provision of customer services for the south-eastern part of Kowloon and part of the New Territories¹ . The MSE Regional Depot is presently situated on a temporary site in Diamond Hill which is earmarked for the construction of the proposed YLFWSR. The construction of the new reservoir has to commence in early 2000 to provide water supply to the proposed South East Kowloon development on the present Kai Tak Airport site. It is necessary to reprovision the existing depot by constructing a new one in Wai Yip Street in Kwun Tong. Any delay in the relocation of the depot will cause a corresponding delay in providing water supply to the housing and other facilities in the proposed South East Kowloon development.

5.The proposed project forms part of the regionalisation plan of WSD in building permanent depots within the respective regions which they serve. To improve customer service and to reduce the response and travelling time required by the staff when carrying out inspections, maintenance and emergency repair works, we consider it necessary to construct a permanent depot for the MSE Region of WSD in Wai Yip Street in Kwun Tong.

6.The proposed depot will also house the Construction Division of WSD which will have to be removed from its present location at the San Po Kong Government Offices Building because of redevelopment of that building by early 2000.

FINANCIAL IMPLICATIONS

7.We estimate the capital cost of the project to be $305.7 million in MOD prices (see paragraph 8 below), made up as follows -

	$ million
(a) Piling	13.8
(b)Building	119.0
(c) Building services	69.8
(d) Drainage and external works	4.9
(e) Furniture and equipment	10.0
(f) Consultants' fees	5.5
(g) Contingencies	14.5
Sub-total	237.5	(at December 1996 prices)
(h) Inflation allowance	68.2
Total	305.7	(in MOD prices)

The construction floor area (CFA) of the project is 18 188 sq. m. The construction unit cost, excluding furniture and equipment and consultancy fees but including contingencies is $12 205 per sq. m. at December 1996 prices. A breakdown by man months of the estimate for consultants' fees is at the Enclosure. 8.Subject to approval, we will phase the expenditure as follows -

Year	$ million (Dec 1996)	Price adjustment factor	$ million (MOD)
1998 - 99	36.0	1.16358	41.9
1999 - 2000	147.0	1.26830	186.4
2001 - 01	38.0	1.38244	52.5
2001 - 02	16.5	1.50686	24.9
	237.5		305.7

9.We have derived the MOD estimates on the basis of the Government's forecast of trend labour and construction prices for the period 1998 to 2002. We will tender the works under a fixed price lump-sum contract because we can clearly define the scope of works in advance, leaving little room for uncertainty.

10.We estimate the additional annually recurrent expenditure of the project to be $5.8 million.

11.The project by itself would lead to an increase in water charges of 0.3% in real terms².

PUBLIC CONSULTATION

12.We consulted the Kwun Tong Provisional District Board on 27 October 1997. Members supported the project.

ENVIRONMENTAL IMPLICATIONS

13.The Director of Environmental Protection completed an Environmental Review of 29GK in October 1996 and concluded that the potential for the project to create adverse impacts on the environment would be limited. No Environmental Impact Assessment would therefore be necessary. We will provide central air-conditioning to the office areas within the proposed building to enhance the internal noise environment. For short-term impacts, we will control noise, dust and site run-off nuisances during construction through the implementation of mitigation measures in the relevant contracts.

LAND ACQUISITION

14.The project does not require land acquisition.

BACKGROUND INFORMATION

15.We upgraded 29GK to Category B in November 1993 and have completed the site investigation work for the project. We engaged consultants of the architectural discipline and quantity surveying discipline for pre-contract preparatory work at a cost of $2.51 million and $3.541 million and charged these amounts to the then block allocation Subhead 3009GX "Consultancy fees for building projects" and the block allocation Subhead 3100GX "Project feasibility studies, minor investigations and consultancy fees for items in Category D of the Public Works Programme" in March 1995 and September 1996 respectively.

16.We have tried for several years to identify joint users to fully optimise the site but have been unsuccessful. The location of the site, which is surrounded by flyovers and has poor vehicular access beneath a pedestrian footbridge, is unsuitable for office type uses. The use of the lower part of the structure for WSD's depot also makes it impossible to accommodate another works depot because of competing demand for ground floor space for the parking of heavy vehicles and for storage. It is unlikely that further delay of the project would improve the prospect of finding other users compatible with WSD's facilities. In the circumstances, the current proposal represents the only viable option which can satisfy the target completion schedule of the MSE Regional Depot and the provision of water supply to the South East Kowloon Development by late 1999 and early 2003 respectively.

17.We plan to start the construction works of the depot in April 1998 for completion in December 1999.

Works Bureau
November 1997
(JJ199)

1. The Mainland South East Regional Office serves Wong Tai Sin, San Po Kong, Tsz Wan Shan, Ngau Chi Wan, Ngau Tau Kok, Jordan Valley, Sau Mau Ping, Kowloon Bay, Kwun Tong, Sai Kung and Tseung Kwan O New Town.

2. The increase in water charges is calculated on the assumption that the demand remains static during the period from 1998 to 2002 and the amount of Government subsidy into the waterworks operations to be contained at the present price level.

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Enclosure to PWSC(97-98)76

29GK - Regional depot for the Water Supplies Department for Mainland South East

DETAILS OF CONSULTANTs' FEES AND CHARGES OF ELECTRICAL AND MECHANICAL SERVICES TRADING FUND

Breakdown of estimates for consultants' fee

Consultants' staff costs		Estimated man months	Average MPS salary point	Multiplier factor	Estimated fee ($ million)
(a)Consultant's staff costs
(i) Architectural discipline	Professional Technical	9.26 11.83	40 16	3 3	1.54 0.66
Sub-total					2.20
(ii) Quantity surveying discipline	Professional Technical	8.00 10.22	40 16	3 3	1.33 0.57
Sub-total					1.90
(b) Charges by Electrical & Mechanical Services Trading Fund (EMSTF)
Fees for installation testing and commissioning, and maintenance period monitoring.					1.40
Total					5.50

MPS = Master Pay Scale

Notes

1.A multiplier factor of 3 is applied to the average MPS point to arrive at the full staff costs including consultants' overheads and profit, as staff will be employed by the consultants'. (At 1.4.1996, MPS Pt. 40 = $55,390 p.m. and MPS pt. 16 = $18,595 p.m.).

2.The above figures are based on estimates prepared by the Director of Architectural Services (D Arch S). We will only know the actual man-months and actual fees when we have selected the consultants through the usual competitive lump sum fee bidding system.

3. Upon its establishment on 1 August 1996 under the Trading Funds Ordinance, the EMSTF starts charging government departments for design and technical consultancy services for electrical and mechanical installations. The services rendered for this project cover the monitoring of installation testing and commissioning, including the maintenance period. The figures above are based on estimates prepared by D Arch S. The actual cost for the service charges is subject to further negotiation between the Government and the EMSTF.

(JJ199)