PWSC(97-98)102
For discussion
on 21 January 1998

ITEM FOR PUBLIC WORKS
SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 703 - BUILDINGS

Education - Secondary

223ES - Secondary school in area 31, Tung Chung

Members are invited to recommend to Finance Committee the upgrading of 223ES to Category A at an estimated cost of $142.4 million in money-of-the-day prices for the construction of a secondary school in area 31, Tung Chung.

PROBLEM

The Director of Education (D of E) forecasts that there will be a shortfall of 177 secondary classes in the territory by 2000.

PROPOSAL

2. The Director of Architectural Services (D Arch S), with the support of the Secretary for Education and Manpower, proposes to upgrade 223ES to Category A at an estimated cost of $142.4 million in money-of-the-day (MOD) prices for the construction of a secondary school in area 31, Tung Chung.

PROJECT SCOPE AND NATURE

3. The proposed secondary school will adopt the latest schedule of accommodation. The school will have -

1. 30 classrooms;

2. 16 special rooms (Physics, Chemistry, Biology, Integrated Science (2), Home Economics (2), Music, Design & Technology (2), Geography, Arts & Craft, Multi-purpose, Computer, Language and Multi-media);

3. three remedial teaching rooms;

4. a guidance activity/interview room;

5. two interview rooms;

6. five staff rooms and a staff common room;

7. a conference room;

8. a student activity centre;

9. a library;

10. an assembly hall;

11. a multi-purpose area; and

12. ancillary accommodation including a lift and relevant facilities for the handicapped.

JUSTIFICATION

4. D of E forecasts that there will be a shortfall of 177 secondary school classes in the territory by 2000. Upon completion of 221ES "Secondary school in public housing estate, phase 1, Aldrich Bay reclamation" ¹in 2000, the shortfall of secondary school classes in the territory will be reduced to 151 classes.

5. In order to reduce the projected shortfall of secondary school classes and to phase out floating classes in Secondary One to Five by 2000 in accordance with the Government policy, we propose to construct a secondary school in area 31, Tung Chung. We are planning to construct more schools in the territory to meet the remaining shortfall.

FINANCIAL IMPLICATIONS

6. We estimate the capital cost of 223ES to be $142.4 million in MOD prices (see paragraph 7 below), made up as follows -

	$ million
(a) Site formation	2.0
(b) Piling	19.7
(c) Building	47.6
(d) Building services	11.3
(e) Drainage and external works	16.8
(f) Contingencies	9.7
(g) Housing Authority on-cost	2.1
	_____
Sub-total	109.2	(at December 1996 prices)
(h) Inflation allowance	33.2
	_____
Total	142.4	(in MOD prices)
	_____

The construction floor area of this project is 9 825 square metres. The construction unit cost, excluding "Housing Authority on-cost" but including "Contingencies", is $10,901 per square metre at December 1996 prices. A comparison of the standard cost of a secondary school with the project estimate of this school is at the Enclosure ² .

7. Subject to approval, we will phase the expenditure as follows -

Year	$ million (Dec 1996)	Price adjustment factor	$ million (MOD)
1998 - 99	7.8	1.16358	9.1
1999 - 2000	65.0	1.26830	82.4
2000 - 01	32.1	1.38244	44.4
2001 - 02	4.3	1.50686	6.5
	_____		_____
	109.2		142.4
	_____		_____

8. 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. In order to tie in with the public housing development programme in area 31, Tung Chung, we will entrust the construction of the school to the Housing Authority which will incorporate the piling contract and building contract for the school into the respective housing estate development contracts. The contracts will be on a fixed price lump-sum basis because we can clearly define the scope of works in advance, leaving little room for uncertainty.

9. We estimate the additional annually recurrent expenditure for the school to be $34.0 million. As the new school will be operated as an aided

school, the sponsoring body will bear the cost of furniture and equipment, estimated at $9.1 million for the school.

PUBLIC CONSULTATION

10. We consulted the Island Provisional District Board in December 1997. Members supported the project.

ENVIRONMENTAL IMPLICATIONS

11. The Director of Housing (D of H) completed a Preliminary Environmental Review (PER) in February 1997 which concluded that the proposed school would not be subjected to any long term environmental impacts and no Environmental Impact Assessment was necessary. We will control waste, noise, dust and site run-off nuisances during construction to comply with the established criteria through the implementation of mitigation measures as recommended in the PER in the relevant contracts.

LAND ACQUISITION

12. The project does not require land acquisition.

BACKGROUND INFORMATION

13. We upgraded 223ES to Category B in January 1998. D of H has completed site investigations for the project and is finalising the working drawings and tender documents. D of H plans to start the site formation works in March 1998 and to complete the construction works in August 2000 to tie in with the overall housing development of area 31, Tung Chung.

Education and Manpower Bureau

January 1998

(HH612)

1.At its meeting on 7 January 1998, PWSC recommended to upgrade 221ES to Category A. Finance Committee will consider this recommendation at its meeting on 27 February 1998.

2.The standard cost of a secondary school with the latest schedule of accommodation has been revised upwards.

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Enclosure to PWSC(97-98)102

A comparison of the standard cost of a secondary school project

with the estimated cost of 223ES

	Standard cost*	223ES
	$ million (at Dec 1996 prices)
(a) Site formation	-	2.0	(See note A)
(b) Piling	10.5	19.7	(See note B)
(c) Building	46.0	47.6	(See note C)
(d) Building services	11.0	11.3	(See note D)
(e) Drainage and external works	7.5	16.8	(See note E)
(f) Contingencies	7.5	9.7
(g) Housing Authority on-cost	-	2.1	(See note F)
	____	____
Total	82.5	109.2
	____	____

*Assumptions for standard cost

1. No site formation work/geotechnical work is required as it is normally carried out by other government departments under a separate engineering vote before the handing-over of the project site.

2. Piling cost is based on 138 nos. of steel H-piles of an average depth of 30 metres.

3. Provisions for the site safety of 2% of the estimated contract sum (which does not attract contingencies) is included in the building cost.

4. Cost for drainage and external works are for a standard school site area of 6 950 square metres built on a flat site. No diversion of existing utilities or noise mitigation measures are required.

5. No consultancy services are required.

6. Furniture and equipment cost is excluded as it will be borne by the sponsoring body.

7. The standard cost for comparison purpose is subject to review regularly. We will review, and revise if necessary, the standard cost which should be adopted for future projects. We plan to submit an information note to members to explain the methodology we used to arrive at the standard cost.

Notes

1. Costs for site formation and geotechnical works are necessary as the site for the housing development including the proposed school is slightly sloping and a platform requires to be formed. The Housing Authority (HA) will charge the costs for providing site formation and geotechnical works on the school site as a portion of the costs of providing similar works for the entire estate, on a pro-rata basis.

2. The piling cost is higher because the cost is based on 35 nos. of 1.5 metres diameter bored piles of an average depth of 45 metres. In addition, the costs of labour and transportation are higher in Tung Chung.

3. Building cost is higher due to the higher labour and transportation costs in Tung Chung.

4. Building services cost is higher due to the higher labour and transportation costs in Tung Chung.

5. The drainage and external works costs are higher because the costs of labour and transportation are higher in Tung Chung. The HA will charge the costs for providing such works on the school site as a portion of the costs of providing similar works, including estate road works, for the entire estate, on a pro-rata basis.

6. There is a standard arrangement to include 2% on-cost for projects entrusted to the HA.

(HH612)