PWSC(97-98)78
For discussion
on 26 November 1997

ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 707 - NEW TOWNS AND URBAN AREA DEVELOPMENT
New Territories East Development
Civil Engineering - Land development
Water Supplies - Combined fresh/salt water supply projects
277CL- Tseung Kwan O development, phase 2, remaining engineering works
37WC- Water supply to Tseung Kwan O

Members are invited to recommend to Finance Committee -

1. the upgrading of part of 277CL, entitled " Tseung Kwan O development, engineering infrastructure at town centre central and widening of Wan Po Road " , to Category A at an estimated cost of $577 million in money-of-the-day prices;

2. the upgrading of part of 37WC, entitled " Water supply to Tseung Kwan O - stage 4 phase 2 " , to Category A at an estimated cost of $59.7 million in money-of-the-day prices; and

3. the retention of the remainders of 277CL and 37WC in Category B.

PROBLEM

There is no engineering infrastructure in the form of roads, drains, sewers and watermains to serve the developments at Tseung Kwan O (TKO) town centre central. In addition, the existing Wan Po Road is inadequate to cope with the forecast traffic demand arising from the developments in TKO.

PROPOSAL

2.The Director of Territory Development (DTD) proposes -

1. with the support of the Secretary for Planning, Environment and Lands, to upgrade part of 277CL to Category A at an estimated cost of $577 million in money-of-the-day (MOD) prices for the construction of engineering infrastructures at TKO town centre central and the widening of Wan Po Road; and

2. with the support of the Secretary for Works and the agreement of the Director of Water Supplies, to upgrade part of 37WC to Category A at an estimated cost of $59.7 million in MOD prices for the laying of watermains to serve the developments at TKO town centre central.

PROJECT SCOPE AND NATURE

3.The scope of 277CL covers engineering works associated with the phase 2 development of TKO. Finance Committee (FC) has previously approved upgrading parts of 277CL to Category A (see paragraph 22 below). Remaining works under the project comprise -

1. reclamation of 2.5 hectares of land in area 51 of TKO;

2. infrastructure works including the construction of about 6.7 kilometres of roads, drains, sewers, interchanges and flyovers; and

3. associated landscaping works.

4.The scope of 37WC covers the provision of a water supply system in stages to serve the TKO New Town. FC has previously approved upgrading parts of 37WC to Category A (see paragraph 23 below). Remaining works under the project comprise -

1. construction of the Tiu Keng Leng fresh water service reservoir with a capacity of 37 000 cubic metres; and

2. laying of about 11.1 kilometres fresh and salt water distribution mains of diameter ranging from 200 to 1 200 millimetres in TKO town centre.

5.The works we now propose to upgrade to Category A comprise the construction/laying of -

for 277CL

1. about 4.2 kilometres of roads with associated footpaths, cycle tracks and landscaping works;

2. about 2.3 kilometres of a second carriageway along the existing Wan Po Road;

3. a flyover over Chiu Shun Road at the P1/D4 roundabout;

4. two pedestrian footbridges and four pedestrian/cycle subways in TKO town centre;

5. associated drainage and sewerage works;

6. noise mitigation measures; and

for 37WC

7. about 5.5 kilometres fresh and salt water distribution mains with diameter ranging from 200 to 900 millimetres.

JUSTIFICATION

6.The proposed developments at TKO town centre central comprise public housing under the Home Ownership, Sandwich Class Housing and Private Sector Participation schemes, private housing, commercial premises, government offices, institution and community facilities, and open space in areas 55, 56, 57, 65, 66 and 67. The Director of Housing started the construction works of housing under the Private Sector Participation Scheme in area 65 in September 1997 for completion in March 2000. Private developers plan to commence housing developments in areas 55 and 57 from mid 2000 for completion in stages. To tie in with the housing projects and other developments in TKO town centre central, we need to start the proposed engineering infrastructure works (as described in paragraphs 5 (a), 5 (d), 5 (e) and 5 (f) above) in February 1998 for completion in May 2000.

7.The existing Wan Po Road is a two-lane single carriageway connecting Chiu Shun Road in area 37 to TKO Industrial Estate in area 87. It was constructed with preparation for further expansion to a dual carriageway.

8.We completed the " Tseung Kwan O feasibility study of opportunities for further development " in 1990. The study report recommended upgrading Wan Po Road to a two-lane dual carriageway with a flyover at its junction with Chiu Shun Road with a view to increasing the development potential of TKO. In anticipation of the traffic demand arising from the current and future developments along Wan Po Road and the future extension of Wan Po Road to serve the proposed deep waterfront industries⁽¹⁾ in area 137, we now consider it necessary to upgrade the road to a two-lane dual carriageway and to construct the flyover at its junction with Chiu Shun Road (as described in paragraphs 5(b) and 5(c) above). The private developer of area 51 will carry out the upgrading works for the section of Wan Po Road between Chiu Shun Road and area 50⁽²⁾.

9.In order to meet the future water demand of TKO and to avoid interfacing problems on site, we propose to lay the fresh and salt water distribution mains (as described in paragraph 5(g) above) in conjunction with the roadworks under 277CL.

FINANCIAL IMPLICATIONS

10.We estimate the capital costs of the proposed works under 277CL and 37WC to be $577 million and $75.4 million respectively in MOD prices. In accordance with the water demand arising from other housing developments under Housing Authority (HA) in the TKO New Town, HA will bear $15.7 million of the cost of 37WC leaving the remainder of $59.7 million to be borne by the Government. The capital costs are made up as follows -

Item		$ million
77CL	(a) Roadworks	154.5
	(b) Flyover	63.5
	(c) Footbridges and subways	42.3
	(d) Sewers	29.2
	(e) Stormwater drains	48.5
	(f) Landscaping works	3.0
	(g) Noise mitigation measures	20.0
	(h) Consultants' fees for
	(i) construction stage	5.0
	(ii) resident site staff costs	42.0
	(i) Contingencies	41.0
Sub-total		449.0	(at December 1996 prices)
	(j) Inflation allowance	128.0
Total		577.0	(in MOD prices)

Due to insufficient in-house staff, DTD proposes to employ consultants to supervise the project. A breakdown by man months of the estimate for 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)
	277CL	37WC		277CL	37WC
1998 - 1999	125.0	7.0	1.16358	145.4	8.1
1999 - 2000	180.0	15.0	1.26830	228.3	19.0
2000 - 2001	110.0	19.0	1.38244	152.1	26.3
2001 - 2002	34.0	4.2	1.50686	51.2	6.3
	449.0	45.2		577.0	59.7

12.We have derived the MOD estimate on the basis of the Government's forecast of trend labour and construction prices for the period 1998 to 2002. We will tender the proposed works under lump sum contracts because we have firm quantities for the majority of the works. The contracts will provide for inflation adjustments because the contract period will exceed 21 months.

13.We estimate the annually recurrent expenditure to be $10.25 million, of which $660,000 will be for sewerage works.

14.Based on the current level of sewage charges and current water consumption, the implication of the proposed sewerage works under 277CL on sewage charges will be negligible in real terms.

15.The waterworks under 37WC will lead to an increase in water charges by a maximum of 0.1%⁽⁴⁾ in real terms by 2002.

PUBLIC CONSULTATION

16.We consulted the Traffic and Transport Committee of Sai Kung District Board and the Sai Kung District Board on 5 December 1996 and 28 January 1997 respectively on the proposed works. Members had no objection to the proposal. We further consulted the Environmental Improvement Committee of Sai Kung District Board on 19 June 1997 on the findings of the Environmental Impact Assessment (EIA) study for the proposed works. Members had no objection to the findings.

17.We gazetted the proposal under the Roads (Works, Use and Compensation) Ordinance on 22 August 1997 and received no objections.

ENVIRONMENTAL IMPLICATIONS

18.In July 1997, we completed an EIA study to assess the environmental impact arising from the construction and operation of the proposed roads in the TKO town centre central and the widening of Wan Po Road. The EIA study concluded that there would be noise impact on the nearby planned residential developments and schools. To keep noise levels within established standards and guidelines, the study recommended some mitigation measures including partial decking over Road D4, construction of noise barriers and paving of low noise road surfacing on a number of roads. We will set out in the works contracts the requirement of implementing these mitigation measures. We plan to provide the partial decking over Road D4 under a separate contract at a later stage after the adjacent developments have provided the structural supports for the decking. The total estimated cost of the noise barriers and low noise road surfacing is about $20 million and has been included in the overall cost of the project.

19.As regards 37WC, the Director of Environmental Protection completed an environmental review in August 1993 and concluded that the project would not have any long term environmental impact. No environmental impact assessment would be necessary.

20.We will control dust, noise and site run-off during construction to comply with the established standards and guidelines through the implementation of appropriate mitigation measures in the relevant works contracts.

LAND ACQUISITION

21.The proposed works do not require land acquisition.

BACKGROUND INFORMATION

22.We upgraded 277CL to Category B in April 1988. Since then, FC has approved the upgrading of various parts of 277CL to Category A for the reclamation of 79 hectares of land at TKO town centre covering both TKO town centre north, TKO town centre central and the provision of engineering infrastructure at TKO town centre north. We have completed the reclamation at TKO town centre. The infrastructure works at TKO town centre north are in progress.

23.In 1978, we upgraded 37WC to Category B for the provision of a water supply system in stages for a designed population of 445 000 and industrial land of 230 hectares in TKO New Town. Since then, FC has approved the upgrading of various parts of 37WC to Category A for implementing stages 1, 2, and 3 of the water supply system. In March 1996, FC upgraded another part of 37WC to Category A as 83WC " Water supply to Tseung Kwan O - stage IV phase I " for site formation work for the Tiu Keng Leng fresh water service reservoir and laying of watermains in Tiu Keng Leng and Tai Chik Sha.

24.We have engaged consultants to undertake the investigations and design for those works under 277CL and 37WC which we now propose to upgrade to Category A. We have charged the cost of $13.9 million to 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. We plan to start the proposed works in February 1998 for completion in May 2000.

25.We plan to implement the remainders of 277CL and 37WC in stages starting from October 1999 for completion by December 2003.

Planning, Environment and Lands Bureau
November 1997

(1) " Deep waterfront industries' means industrial or warehousing operations which require access to deep water berths. Examples are the bulk heavy oil storage and packing industry, the bulk chemical industry and the concrete batching and prefabrication industry.

(2) The development at area 51 comprises eight residential blocks. The developer, a joint venture of Sun Hung Kai Properties Limited and Hong Kong Oxygen & Acetylene Company Limited, expects to complete phase 1 of the development in the last quarter of 1998 before the completion of the roadworks under 277CL. Due to this mismatch in time schedules, the developer suggested to carry out the upgrading works by themselves. As a result, we have incorporated into the lease conditions the requirement for the grantee to carry out the upgrading works for the section of Wan Po Road between Chiu Shun Road and area 50.

(3) The share to be borne by HA is determined in accordance with the proportion of the fresh and salt water demand arising from its housing development.

(4) This is calculated on the assumption that the demand remains static during the period from 1997 to 2002 and that the amount of Government subsidy to the waterworks operations is to be contained at the present level.

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Enclosure to PWSC(97-98)78

277CL - Tseung Kwan O development, phase 2, remaining engineering works

37WC - Water supply to Tseung Kwan O

Breakdown of the estimate for consultants' fees

Consultants' staff costs		Estimated man months		Average MPS* salary point	Multiplier factor	Estimated fee ($ million)
		277CL	37WC		277CL	37WC
(a) Consultants' fees for construction stage
(i) contract administration	Professional Technical	18 20	2.0 2.0	40 16	3.0 3.0	3.0 1.1	0.3 0.1
(ii) preparation of as-built drawings	Professional Technical	3 8	0.4 0.7	40 16	3.0 3.0	0.5 0.4	0.1 0.0
(b) Resident site staff costs	Professional Technical	155 615	14.0 61.0	40 16	2.1 2.1	18.0 24.0	1.6 2.4
Total consultants' staff costs						47.0	4.5

* 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 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 phase 2 development of Tseung Kwan O.