For discussion
on 2 December 1998
PWSC(98-99)48
ITEM FOR PUBLIC WORKS SUBCOMMITTEE OF FINANCE COMMITTEE
HEAD 703 - BUILDINGS
Government Offices - Intra-governmental services
104KA - Shatin Government Offices Building
Members are invited to recommend to Finance Committee the upgrading of 104KA to Category A at an estimated cost of $1,255.4 million in money-of-the-day prices for the construction of a government offices building in Shatin.
PROBLEM
There are not enough government owned offices in Shatin to meet our accommodation requirements. Furthermore, the existing government office site at Tung Lo Wan Hill Road in Tai Wai is grossly under-developed by today's standards.
PROPOSAL
2. The Director of Architectural Services, with the support of the Secretary for the Treasury, proposes to upgrade 104KA to Category A at an estimated cost of $1,255.4 million in money-of-the-day (MOD) prices for the construction of a government offices building in Pai Tau Street, Shatin.
PROJECT SCOPE AND NATURE
3. The project comprises the design and construction of a joint-user, general government office complex on a reserved site of 3 560 square metres. The proposed Shatin Government Offices Building (STGOB) will be an 18-storey office tower with three and a half levels of basement carpark providing 200 spaces. At the permissible plot ratio of 9.5, the permissible maximum gross floor area1 is 33 820 square metres.
JUSTIFICATION
4. At present, the only government-owned office space in Shatin is the Tung Lo Wan Hill Road (TLWHR) Government Offices Building. The site is grossly under-utilised with a plot ratio of only 0.5. The site area is about 8 000 square metres, providing a usable space of only about 3 300 square metres which is currently taken up by the offices of three departments (i.e. the Lands Department, the Planning Department and the Territory Development Department). The Government has to meet the shortfall in owned accommodation through leasing. As a result, offices of some departments are scattered around in different locations. Moreover, there is the problem of insecurity of tenure. One notable example is that the Government is currently leasing a total of 7 800 square metres of space in the Citylink Plaza, the owner of which, KCRC, plans to redevelop the site in 2001. We therefore have to identify alternative accommodation to reprovision those offices currently accommodated there.
5. We estimate that the proposed STGOB will yield about 25 365 square metres of usable office area (i.e. assuming 75% of gross floor area excluding common and circulation areas such as corridor/lobby/staircases, etc.). This will enable the offices of the three departments currently housed in the TLWHR Government Offices Building, and also the offices of some 14 departments currently in leased accommodation in the Citylink Plaza, to be reprovisioned there. Moreover, the STGOB will provide enough space to enable other offices of departments now scattered in Shatin and other areas to be co-located under one roof. It will thus help to meet departments' operational requirements more efficiently in that scattered offices are brought together, and will better serve the community in that there will be a focal point of government departments in the district. A list of the potential user departments identified thus far, is at Enclosure 1. We will finalise the actual allocation closer to the completion of the project having regard to the needs for office space of different departments prevailing at the time.
6. Another obvious advantage of the proposed project is that it is in line with our policy to reduce dependency on leased accommodation and to optimise the use of site potential. As a result of the construction of the STGOB, we estimate that there will be an actual annual rental savings of $62.5 million at current price levels from deleasing of 14 800 square metres of existing leased office accommodation. In addition, the under-utilised site at TLWHR can be released for re-development. We estimate that the notional savings from leasing additional office spaces to reprovision existing offices in the TLWHR Government Offices Building and meet the shortfall in office space, which would otherwise be required without the STGOB, is about $37.5 million.
FINANCIAL IMPLICATION
7. We estimate the capital cost of the project to be $1,255.4 million in MOD prices (see paragraph 9 below), made up as follows -
| $ million
|
|---|
| (a) Site formation | 3.4
|
| (b) Drainage and external works | 3.0
|
| (c) Building | 554.7
|
| (d) Building services | 267.7
|
| (e) Furniture and equipment | 108.8
|
| (f) Trading fund charges | 8.5
|
| (g) Contingencies | 90.0
|
| ________
|
| Sub-total | 1,036.1 | (at December 1997 prices)
|
| (h) Inflation allowance | 219.3
________
|
| Total | 1,255.4
________ | (in MOD prices)
|
A breakdown of the cost estimates for trading fund charges is at
Enclosure 2.
8. The estimated construction floor area (CFA) of 104KA is 56 331 square metres. The construction unit cost, as represented by building and building services costs, is $14,599 per square metre at December 1997 prices. We consider this reasonable compared with similar projects built by government.
9. Subject to approval, we will phase the expenditure as follows -
| Year | $ million
(Dec 1997) | Price
adjustment
factor | $ million
(MOD)
|
|---|
| 1999 - 2000 | 150.0 | 1.12890 | 169.3
|
| 2000 - 01 | 673.0 | 1.19663 | 805.3
|
| 2001 - 02 | 110.0 | 1.26843 | 139.5
|
| 2002 - 03 | 70.0 | 1.34454 | 94.1
|
| 2003-04 | 33.1 | 1.42521 | 47.2
|
| ________ | | ________
|
| 1,036.1 | | 1,255.4
|
| ________ | | ________
|
10. We derived the MOD estimates on the basis of the Government's latest forecasts of trend labour and construction prices for the period 1999 to 2004. In view of the tight construction programme, we will tender the project as a design-and-build contract. Under this form of contract, the contractor will be responsible for the detailed design and construction works but will operate within firm and precise parameters set out by Government, including a cash-limited budget. We will define the scope and requirements of the project in sufficient detail to ensure that there will be no areas of design that the contractor could interpret in a way that is unacceptable to the Government. We intend to award the contract on a fixed-price lump-sum basis.
11. We estimate the additional annually recurrent expenditure of the project to be $23.3 million.
PUBLIC CONSULTATION
12. We consulted the Shatin Provisional District Board in June 1998. Members of the Board supported the construction of the proposed STGOB.
ENVIRONMENTAL IMPLICATIONS
13. The Director of Architectural Services completed a Preliminary Environmental Review (PER) in January 1997 which concluded that the project would not cause any adverse environmental impacts. The Director of Environmental Protection endorsed the report and agreed that an environmental impact assessment was not required. We will control noise, dust and site run-off nuisances during construction to within established standards and guidelines through the implementation of mitigation measures in the relevant works contracts.
LAND ACQUISITION
14. The project does not require land acquisition.
BACKGROUND INFORMATION
15. We upgraded 104KA to Category B in August 1997. We plan to start the construction works of the proposed government building in May 1999 for completion in October 2001.
16. The present proposal will achieve a plot ratio of 9.5. We consider that the project will maximise the development potential of the site.
------------------------------------------
Finance Bureau
November 1998
Enclosure 1 to PWSC(98-99)48
Potential users of Shatin Government Offices Building
| Department | Estimated
area to be
allocated (m2)
| Current location
of offices concerned
|
|---|
| Planning Department | 4 444 | Shatin (TLWHRGO), Kwai Chung (Metroplaza),
Tsim Sha Tsui (Chinachem Golden Plaza)
|
| Social Welfare Department | 2 428
| Shatin (CP), Shatin (New Town Plaza)
|
| Lands Department | 1 931
| Shatin (CP), Shatin (TLWHRGO)
|
| Post Office | 1 800
| Shatin (CP)
|
| Labour Department | 1 719
| Shatin (CP), Shatin (New Town Plaza),
Kwun Tong District Office
|
| Environmental Protection Department | 1 471 | Shatin (Grand Central Plaza), Tai Po (Tai Wo Estate, Tai Po District Office)
|
| Home Affairs Department | 1 391 | Shatin (CP)
|
| Territory Development Department | 1 073 | Shatin (TLWHRGO)
|
| Transport Department | 768
| Shatin (CP)
|
| Education Department | 650
| Shatin (CP), Shatin (Grand Central Plaza)
|
| Department of Health | 585
| Shatin (CP)
|
| Immigration Department | 529
| Shatin (CP)
|
| Land Registry | 414
| Shatin (CP)
|
Independent Commission
Against Corruption | 283 | Shatin (CP)
|
| Civil Aid Service | 215 | Shatin (CP)
|
| Hong Kong Police Force | 72 | Shatin (CP)
|
| Customs & Excise Department | 18 | Shatin (CP)
|
Total area for identified
user departments (a) : | 19 791
|
10% expansion factor
((b) = (a) x 10%) : | 1 979 | Legend
|
Maintenance and building
management offices (c) :
| 386 | TLWHRGO=Tung Lo Wan Hill Road Government Offices
|
Total area required for
allocation
((d) = (a)+(b)+(c)): | 22 156
| CP= Citylink Plaza
|
Total usable area in
STGOB (e) : | 25 365
|
Surplus area to be
allocated
((f) = (e)-(d)) : | 3 209
|
Enclosure 2 to PWSC(98-99)48
104KA - Shatin Government Offices Building
DETAILS OF TRADING FUND CHARGES
Breakdown of estimates for trading fund charges| Category of works/items | Estimated fees
($ million)
|
|---|
(A) Electrical & Mechanical Services Trading Fund (EMSTF) charges
(Fees for advisory services on installation, testing, commissioning and monitoring services) | 6.9
|
(B) Charges by the Office of the Telecommunication Authority Trading Fund (OFTATF)
(Fees for advisory services on planning, design and installation of telecommunication system) | 1.6
|
| _____
|
| Total |
| 8.5
|
| _____
|
Notes
1. Since the establishment of EMSTF on 1 August 1996 under the Trading Funds Ordinance, government departments are charged for design and technical consultancy services for electrical and mechanical installations provided by the Electrical and Mechanical Services Department (EMSD). The figures above are based on estimates prepared by the Director of Architectural Services (D Arch S). The actual cost for the service charges is subject to further discussion between the Government and the EMSD.
2. Since the establishment of the OFTATF on 1 June 1995 under the Trading Funds Ordinance, government departments are charged for design and technical consultancy services for telecommunication system installations provided by the Office of the Telecommunication Authority (OFTA). The figures above are based on estimates prepared by D Arch S. The actual cost for the service charges is subject to further discussion between the Government and the OFTA.
1Generally speaking, gross floor aresa excludes parking, loading/unloading and plant room areas.
