For discussion
on 3 February 1999
PWSC(98-99)65
ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE
| HEAD 708 | - | CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND
EQUIPMENT
|
Universities
Hong Kong Baptist University
| 18EH | - | University hostels at Baptist University Road - phase 1 (1 000 places) and phase 2 (629 places)
|
Members are invited to recommend to Finance Committee to approve a new commitment of $345.74 million in money-of-the-day prices for the construction of phases 1 and 2 of the student hostel project of the Baptist University of Hong Kong.
PROBLEM
Hong Kong Baptist University (HKBU) requires hostel accommodation to meet students' demand.
PROPOSAL
2. The Secretary-General, University Grants Committee (SG, UGC), on the advice of the University Grants Committee (UGC) and the Director of Architectural Services (D Arch S) as UGC's Technical Adviser, and with the support of the Secretary for Education and Manpower, proposes the creation of a new commitment at an estimated total cost of $345.74 million in money-of-the-day (MOD) prices for the construction of HKBU's student hostels, phase 1 (1 000 places) and phase 2 (629 places).
Adjustment of the proposed project estimates
3. Having examined HKBU's proposal, SG, UGC has, in consultation with D Arch S, adjusted the project estimate proposed by HKBU to arrive at the project estimate set out in paragraph 2 above. A comparison of the project estimate proposed by HKBU and the estimate recommended by the UGC is at the Enclosure.
PROJECT SCOPE AND NATURE
4. The project is for the construction of 1 629 hostel places as phases 1 and 2 of HKBU's student hostel project at the Baptist University Road site.
JUSTIFICATION
5. In December 1996, the Government promulgated a new policy for the provision of publicly-funded student hostel places at UGC-funded institutions. It represents Government's efforts to enhance the quality of university education by fostering hostel life which will sharpen students' communication skills, nurture their leadership quality, encourage independent thinking and promote participation in community affairs. Under this policy, all undergraduates will have the opportunity to stay in hostels for at least one year and all research postgraduates, non-local students and those undergraduates whose daily travelling time exceeds four hours will be provided with hostel places.
6. HKBU currently has no student hostels. To achieve the policy described in paragraph 5 above, we have agreed to provide HKBU with 1 629 publicly-funded hostel places. We will provide these places in two phases - 1 000 places in phase 1 and 629 places in phase 2.
7. With an allocation of $15 million from the block allocation Subhead 8100EX of the Capital Works Reserve Fund and $5 million from its private funds, HKBU has completed most of the pre-tender consultancy services and site investigation. It is in the process of finalising contract documentation for the project and now proposes to proceed with the construction work.
FINANCIAL IMPLICATIONS
8. SG, UGC, on the advice of D Arch S, recommends approval of the project at a cost of $345.74 million in MOD prices made up as follows -
| | $ million
|
|---|
| (a) Site and area development | | 18.15
|
| (b) Building | | 209.49
|
| (c) Building services | | 72.34
|
| (d) Consultants' fees for | | 36.001
|
|
9. The construction floor area of this project is 29 650 square metres. The construction unit cost, represented by building and building services costs, is $9,505 per square metre at December 1997 prices. We consider this construction unit cost reasonable compared with similar student hostel projects in other UGC-funded institutions.
10. The project would have no impact on tuition fees. Following the established practice for UGC-funded institutions, HKBU will operate these student hostels on a self-financing basis through charges levied on hostel places.
11. Subject to Members' approval, HKBU will phase the expenditure of the project as follows -
| Year | $ million
(Dec 1997) | Price
adjustment
factor | $ million
(MOD)
|
|---|
| 1999 - 2000 | 67.78 | 1.12890 | 76.52
|
| 2000 - 01 | 308.15 | 1.19663 | 368.74
|
| 2001 - 02 | 12.40 | 1.26843 | 15.73
|
| _______ | | _______
|
| 388.332 | | 460.992
|
| _______ | | _______
|
12. We derived the MOD estimate on the basis of the Government's latest forecast of trend labour and construction prices for the period 1999 to 2002. Subject to Members' approval, HKBU will tender the works under a fixed price lump sum contract as the scope of works has been clearly defined, leaving little room for uncertainty.
PUBLIC CONSULTATION
13. We do not consider public consultation necessary as the project is in line with established policy and the construction is within the campus of HKBU.
ENVIRONMENTAL IMPLICATIONS
14. We completed a Preliminary Environmental Review (PER) of the project in April 1998. The PER concluded and the Director of Environmental Protection agreed that there would be no long-term environmental impacts from the proposed student hostel. No Environmental Impact Assessment study would be required.
15. For short term impacts during construction, HKBU will control noise, dust and site run-off nuisances to within established standards and guidelines through the implementation of appropriate mitigation measures in the relevant contracts.
LAND ACQUISITION
16. The project does not require land acquisition.
BACKGROUND INFORMATION
17. Following approval of funding, HKBU plans to commence the construction works as soon as practicable, in any case not later than May 1999. The works will take some 24 months from start to finish. We aim to complete the construction works by April 2001 at the latest.
18. Under existing procedures, UGC-funded institutions submit capital works proposals to the UGC on an annual basis. The UGC examines these proposals carefully, with professional advice provided by D Arch S who acts as UGC's Technical Adviser. The UGC refers those proposals it supports to the Government for funding support.
--------------------------------------------
Education and Manpower Bureau
January 1999
(PWSC0064/WIN3)
Enclosure to PWSC(98-99)65
A comparison of the project estimate requested by HKBU
with the estimate recommended by UGC
| Project | Amount
proposed by the
HKBU
(at December
97 prices)
|
Amount
recommended
by UGC
(at December
97 prices) | Amount of
reduction
|
|---|
| ($ million) | ($ million) | ($ million)
|
|---|
HKBU -
University hostels at Baptist University Road - phase 1 (1 000 places) and phase 2 (629 places) | 413.85 | 408.33 | 5.52
|
Note -
The net reduction of $5.52 million is a result of the following adjustments -
- upward adjustment of provision for building works (an increase of $10.63 million);
- deletion of furniture items from the provision for building works ($8.19 million);
- downward adjustment of provision for building services installation ($6.48 million);
- downward adjustment of consultant's fees ($0.48 million);
- downward adjustment of provision for furniture and equipment ($0.5 million); and
- downward adjustment of contingencies ($0.5 million).
(PWSC0064/WIN3)
1The consultancy contract for this project is remunerated on a scale fee basis. The sum of $36 million is based on the current estimated cost of the project. The breakdown by category is based on estimated expenditure as assessed by HKBU and has been examined by D Arch S. Items (i), (ii) and (iii) are the estimated expenditure for pre-tender consultancy services and site investigation funded by $15 million from block allocation Subhead 8100EX and $5 million from HKBU's private funds as described in paragraph 7 above. We include the amounts here to show a complete picture of the consultant's fees required for the project and for determining the correct contribution to be made by HKBU shown in paragraph 8(h). We will only know the actual consultant's fees for the project upon finalisation of the works account.
2This excludes price adjustment allowance for the estimated expenditure of $20 million for pre-tender consultancy services and site investigation described in paragraph 7 above.
