For discussion PWSC(95-96)88
on 7 February 1996
ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 703 - BUILDINGS
Block allocations
Members are invited to recommend to the Finance Committee to approve the allocation of $1,175.80 million for block allocations under Head 703 for 1996-97 together with the creation of two new block allocation Subheads 3100GX and 3101GX, and to delegate to the Financial Secretary the power to authorise expenditure from the new block allocations.
Various block allocations under Head 703 need funding in 1996-97 for existing and new projects to proceed on schedule. The present system of block allocations is administratively cumbersome and leads to underspending.undertaken under block vote subheads 3003GX, 3005GX and 3006GX are similar in nature and the present system of block vote allocations allows funds between these subheads when there is a shift in the mix of projects requiring funding. This may lead to underspending in one subhead but insufficient funds in the others.
2. We propose a total allocation of $1,175.80 million for the block allocations for 1996-97 under Head 703, including the creation of two new block allocation subheads 3100GX and 3101GX, made up as follows -
|
Subhead
|
Description
|
1996-97
proposed
allocation
$ million
|
|---|
|
3004GX
|
Refurbishment of government buildings is for works estimated to cost not more than $15 million each for refurbishment of government buildings.
|
532.00
|
|
3100GX
|
Project feasibility studies, minor investigations and consultants fees selected from items in Category D of the Public Works Programme, which replaces existing block allocation subheads 3001GX, 3002GX, 3008GX and 3009GX, is for minor investigations, including site investigations, subject to a maximum ceiling of expenditure of not more than $15 million per Category D item. Items may also be included in Category D to cover the costs of preliminary feasibility studies and investigations to enable new building projects to be included in Category C of the Public Works Programme, and consultants fees and charges for feasibility investigations and design (including preparation of tender documents) of building works items in Category B or (subject to the Secretary for the Treasurys approval) Category C of the Public Works Programme. Urgent payments in respect of minor outstanding works to a value not exceeding $100,000 on any building projects that have been substantially completed and for which there is no subhead in the Fund estimates may also be charged to this subhead. Approval will be sought from the Financial Secretary to reinstate such projects in the Fund estimates during the year and, once this approval has been obtained, expenditure will be transferred to the original project.
|
50.80
|
|
3101GX
|
Minor building works which replaces existing block allocation subheads 3003GX, 3005GX and 3006GX, is for minor building works, fitting out works and minor alterations, additions and improvement work, subject to a maximum ceiling of expenditure of not more than $15 million per item.
|
593.00
|
|
Total
|
1,175.8 |
Enclosure 1 sets out the allocation for each existing block allocation in 1995-96 as compared to the amount proposed under the new block allocation for 1996-97 As with other block allocations under the Capital Works Reserve Fund (CWRF), we also propose that Finance Committee delegate to the Financial Secretary the power to authorise expenditure under the new subheads1 .
3. Block allocation subheads under CWRF heads of expenditure dealing with the Public Works Programme provide sources of funds for a wide variety of minor projects, generally costing less than $15 million each (public works projects costing over $15 million each have to be approved on an individual basis by Finance Committee). Finance Committee approves expenditure under block allocations on the basis of the forecast of total expenditure required for the next financial year, not the total estimated cost of the works to be carried out, the implementation of which can extend beyond the financial year in question. It is necessary for Finance Committee to approve funds under each of the block allocations under Head 703 for each year in order to enable the Government to undertake various building works in the next financial year, including meeting payments carried forward from the present and earlier financial years.
4. The proposed total allocation for the new Head 703 block allocations for 1996-97 shows an increase of about 13??% over the aggregate allocation for the existing subheads in 1995-96. We have drawn up the allocation proposed for 1996-97 on the basis of expenditure patterns, existing commitments and projects expected to be undertaken in the coming financial year. Enclosure 2 sets out the key expenditure items in 1996-97.[W Division to provide]
5. We wish to take the opportunity in this year's block allocation exercise to reduce the number of block allocations under Head 703. The creation of new block allocations has usually taken place on an ad hoc basis in response to a particular need at the time. Underspending is a problem because the procedures governing expenditure under the CWRF prevent us from automatically transferring readily available funds under one block allocation to another block allocation where additional funds are urgently required and then, if necessary, subsequently seeking additional funds from the Finance Committee via PWSC should total expenditure for the financial year in respect of all block allocations look likely to be exceeded. Total expenditure on block allocations under Head 703, since 1992-93, is shown below -
Total expenditure on Head 703 block allocations
|
Financial year
|
Original Estimate
$'000
|
Actual Outturn
$'000
|
|---|
|
1992-93
|
461,300
|
289,758
|
|
1993-94
|
461,300
|
350,947
|
|
1994-95
|
630,300
|
580,639
|
|
1995-96
|
1,038,600
|
# 903,600 |
# Forecast outturn for 1995-96
6. We usually find ourselves only being able to apply to the Finance Committee via the PWSC to increase the permitted level of expenditure under the block allocation requiring the additional funds, leaving the amounts available under other block allocations unchanged. This is particularly true in the early part of the financial year when we are still uncertain of the likely total year expenditure under each block allocation. By combining block allocations covering expenditure on a similar nature of work, we can overcome these problems.
7. In addition, the present variety of financial controls on maximum levels of expenditure on any single item depend on the individual scopes of each block allocation. This is confusing. We propose to introduce only one limit for the new block allocations, that being a maximum expenditure ceiling of not more than $15 million per item2. Above that ceiling we will seek the specific approval of the Finance Committee via the PWSC in the form of a separate project for upgrading to Category A in the Public Works Programme. Below that ceiling we will impose uniform administrative procedures to control approval of all items funded under the new block allocations.
8. The total proposed allocation for the block allocations for 1996-97 under Head 703 is $1,175.80 million. There are no additional annually recurrent expenditure implications arising from the proposals.
9. The CWRF finances eleven different heads of expenditure covering the Public Works Programme, the acquisition of land, capital subventions and major systems and equipment, and computerisation. The block allocations under Head 703 provide for expenditure on building-related projects, including minor site investigations and feasibility studies, consultants fees and minor building and refurbishment works. The ambits of the current block allocations for 1995-96 are set out in Enclosure 3. We allow a certain level of over-commitment on the sums approved by Finance Committee in order to cater for expenditure on items which can only start towards the end of the financial year, and where part of the expenditure must carry forward to the next financial year, or for items where we forecast the full amount of expenditure will be spread over several financial years.
1 -- As provided for under the Resolution establishing the CWRF, the Financial Secretary may delegate his power of administration to other officers.
2 -- We do not allow larger projects, costing more than $15 million each, to be broken down into phases or stages so as to circumvent the need to seek Finance Committee's approval. Finance Committee has previously delegated to the Secretary for the Treasury the power to authorize expenditure on Category D items up to a maximum ceiling of $ 15 million per item.
Enclosure 1
|
Subhead
|
Title
|
Original
Allocation
1995 - 96
$ million
|
Existing/
Proposed
New
Subhead
|
Proposed Title
|
Proposed
Allocation
1996 - 97
$ million
|
|---|
|
3001GX
3002GX
|
Minor investigations for building projects
Minor outstanding
buiilding items
|
3.30
0.30
|
3004GX
|
Refurbishment of government buildings
|
532.00
|
|
|
|
|
3100GX
|
Project feasibility studies, minor
|
50.80
|
|
3003GX
|
Minor building works, other than fitting-out works, selected from items in Category D of the Public Works Programme
|
280.00
|
|
investigations and consultants fees selected from items in Category D of the Public Works Programme
(this replaces the
|
|
|
3004GX
|
Refurbishment of government buildings
|
431.00
|
|
existing block allocation Subheads 3001GX,
|
|
|
3005GX
|
Fitting-out works selected from items in Category D of the Public Works Programme and office improvement
|
154.00
|
3101GX
|
3002GX, 3008GX and 3009GX)
Minor building works selected from items in Category D of the
|
593.00
|
|
3006GX
|
Alterations, additions and improvements to government-owned or leased accommodation
|
120.00
|
|
Public Works Programme
(this replaces the existing block allocation Subheads 3003GX,
|
|
|
3008GX
|
Project feasibility studies and minor investigations for buildings projects
|
8.00
|
|
3005GX and 3006GX)
|
|
|
3009GX
|
Consultants fees for buildings projects
|
42.00
|
|
|
|
|
|
Total
|
1,038.60
|
|
Total
|
1,175.80 |
Enclosure 2 to PWSC(95-96)88
|
Project Description
|
Estimate
1996-97
$'000
|
|---|
|
Reprovisiong of North Kowloon Magistracy
|
200
|
|
Ecological Park
|
200
|
|
Extension to Kings College
|
2,000
|
|
Creation of office space in San Po Kong Magistracy
|
8,290
|
|
Expansion of marine refuse collection service
|
4,030
|
|
Green house for keeping of endangered plants
|
700
|
|
Kat O fisheries station
|
4,000
|
|
Provision of bulk petrol storage tank and dispenser at Marine Police North Divisional Base at Ma Liu Shui
|
5,500
|
|
Re-roofing and refurbishment of Cheung Sha Wan Post Office
|
770
|
|
Refurbishment of Hei Ling Chau treatment centre
|
5,040
|
|
Fitting-out of office space for Shatin (North) Family Services Centre
|
1,146
|
|
Fitting-out of office space for the Young Drug Abusers Project
|
2,232
|
|
Fitting-out of office space for the Intelligence Collection Division, Customs and Excise Department
|
1,683
|
|
Training centre for the Civil Aid Services at Moreton Terrace, Causeway Bay
|
10,000
|
|
Two student health services centres at Yuen Long Jockey Club Health Centre and Lions Club Health Centre
|
6,000
|
|
Extension of Cheung Sha Wan temporary wholesale poultry market
|
8,600
|
|
Rehabilitation of the Old South Kowloon Magistracy building at Gascoigne Road
|
13,500
|
|
Alterations & improvements to nine fire stations and one ambulance depot
|
5,960 |
Enclosure 3 to PWSC(95-96)88
Block allocation
subhead
|
Title
|
Ambit
|
|---|
|
3001GX
|
Minor investigations for building projects
|
For minor site investigation works costing not more than $400,000 in respect of each site.
|
|
3002GX
|
Minor outstanding building items
|
An arbitrary amount which may be used initially for urgent payments in respect of minor outstanding works to a value not exceeding $100,000 on any building project which has been substantially completed and for which there is no subhead shown in the Fund estimates. Approval will be sought from the Financial Secretary under delegated power to reinstate such projects in the Fund estimates during the year and, once this approval has been obtained, expenditure will be transferred to the original project.
|
|
3003GX
|
Minor building works, other than fitting out works, selected from items in Category D of the Public Works Programme
|
For minor building works projects selected from Category D of the Public Works Programme.
|
|
3004GX
|
Refurbishment of government buildings
|
For works estimated to cost between $150,000 and $15 million each for refurbishment of government buildings.
|
|
3005GX
|
Fitting out works selected from items in Category D of the Public works Programme and office improvement
|
For minor fitting out and associated minor building works estimated to cost $15 million or less each for government-leased or government-owned premises.
|
|
3006GX
|
Alterations, additions and improvements to government-owned or leased accommodation
|
For minor alterations, additions and improvement works costing not more than $5 million or less each.
|
|
3008GX
|
Project feasibility studies and minor investigations for buildings projects
|
For preliminary feasibility studies and minor investigations to enable buildings projects to be included in Category C of the Public Works Programme.
|
|
3009GX
|
Consultants fees for buildings projects
|
For consultants fees and charges for the design of buildings projects, including preparation of tender documents, in Category B of the Public Works Programme. |
Last Updated on 8 December 1998
